Statistical analysis into the effects of price on sales of key product lines.
Examples of our Work - FMCG including Food, Drink and Household Products Market Research
Background
The confectionery marketplace is a highly competitive one in which an understanding of the effect of price and promotion activity on sales is of key importance. Over a period of 5 years there had been numerous changes in the marketplace including changes in market growth, trade concentration, promotional activity, display space and product ranges. This analysis was commissioned to update our clients understanding of the impact of relative value on consumer sales of its core brands.
Objectives
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To estimate the impact of longer term movements in relative value on consumer sales volume of key packs of selected core brands in selected retail outlets.
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To identify the impact of price changes separately from weight changes on consumer sales volume.
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To understand the impact of relative value on the market sector as a whole and within retail channels.
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To assess to what extent price / value elasticities vary across packs and types of retail outlets.
Methodology
Statistical analysis of existing data was undertaken using standard econometric techniques. Data sources included retail audit, scanning, panel and BARB / Meal advertising data and internal records on promotional activity / weight changes.
Outcome
The price effect on brand sales was identified and the effect on brand sales of other terms included in the statistical analysis. The proce elasticities of key pack formats within the brands analysed was established. In summary this client was able to better predict likely changes in sales volumes resulting from a change in price following this analysis.
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