Willingness-to-Pay & Pricing Power Drivers for CPG
Are you leaving money on the table with a price that is too low, or priced higher than the consumer value perception of your brand? Can you increase your price without losing volume, or should you lower your price to match the consumer value perception?
What create Power Drivers
Pricing power drivers are the key factors that enable a company to maintain its pricing power in the market. A company with strong pricing power has the ability to set and maintain higher prices compared to its competitors. There are several drivers that can contribute to a company’s pricing power.
- A strong brand reputation. Well-established and trusted brands can command higher prices because consumers associate them with quality, reliability, or status.
- Meaningful product differentiation. Brands with distinct features, superior performance, or unique positioning create defensible value.
- Supply and demand dynamics. When demand outpaces supply, a company can charge higher prices without losing customers.
- Competitive landscape. A competitive advantage, such as a proprietary technology or unique distribution network, can create structural pricing advantages.
- Cost Structure Efficiency. Lower-cost operators can afford to offer lower prices and still maintain profitability
The gap between perceived pricing power and earned pricing power is where brands leave value on the table. PricingOne measures that gap across every feature, SKU, consumer segment, and market to uncover your true pricing potential.
From price-setting to Value measurement
Willingness to pay (WTP) is a critical concept in pricing strategies, as it represents the maximum price that a consumer is willing to pay for a particular product or service.
Understanding WTP is crucial for businesses that want to maximize their profits while still offering value to their customers.
By determining the WTP of their target customers and aligning their pricing with the perceived value of their product or service, businesses can maximize their profits while also delivering value to their customers.
Consumer value is the real-world price a shopper is willing to pay for your product, on a real shelf, against real alternatives. And that value changes by SKU, retailer, occasion, and customer segment.
Trusted by Leading Brands
Our methodology : 5 pillars of measurement
Consumer value is multidimensional. We measure it the way consumers build it to uncover the true drivers of willingness to pay.
- Category & shopper context. We assess your category, competitive landscape, brand performance, consumer and shopper behaviour, value perception, and pricing power to identify the greatest growth opportunities.
- Brand-level pricing power . Determine the optimal price positioning of your brands and portfolio relative to competitors.
- SKU-level elasticities. Measure how each SKU responds to price changes to optimize pricing, portfolio mix, and revenue.
- Feature-level WTP. Quantify the value consumers place on product features, claims, ingredients, and benefits. Identify which attributes justify a premium, protect value, or erode pricing power.
- Innovation potential. Evaluate new concepts, features, formats, and benefits based on consumer demand, willingness to pay, incrementality, cannibalization risk, portfolio fit, and pricing potential.
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Is this right for your organisation ?
You lead Marketing, Brand, RGM, Insights or Commercial and are responsible for pricing and portfolio decisions across multiple brands or markets.
- You’re unsure how much pricing power your brands truly have.
- Recent price increases have impacted volume or value more than expected.
- Your innovation pipeline is growing, but incrementality versus cannibalization remains unclear.
- Private label and challenger brands are narrowing the value gap.
- You have consumer data, but lack quantified willingness-to-pay and predictive pricing insights.
If any of these challenges sound familiar, let’s talk.
Consumer Value & Power Drivers – FAQs
We triangulate four data layers (category dynamics, brand perception, proprietary consumer testing, financial performance) and score every feature, claim and benefit on its financial value to the consumer. We co-build with your sales and marketing teams, and we hand over working tools. Furthermore our practitioners are RGM operators (ex-P&G, ex-FMCG).
A single-brand pricing power assessment runs accross a few weeks . A multi-brand portfolio model with innovation pipeline scoring runs for a couple of months.
As a minimum : your retailer-level sell-out, internal pricing history by SKU, and access to existing syndicated panel data. We run the proprietary consumer testing layer ourselves. We then triangulate these four layers into one projective model.
Pricing Power Drivers can be a standalone diagnostic, typically before a major pricing decision, a portfolio restage, or an innovation gate. But generally it is the first workstream of a full Triple Win RGM™ engagement, feeding directly into Business Interventions and Retailer Execution Plans.
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