Consumer pricing practices have changed significantly over the last few years as price transparency has increased exponentially and new channels have been developed. Setting a price that maximizes business results is an exercise that can no longer be done using only internally generated data. It requires an understanding of consumers' willingness to pay.
Historically consumer pricing has been all about setting a descent margin on each product and service offered. In retail, different factors have been used to set consumer prices based on a multiple of the cost. However, increased price transparency and new distribution channels make it impossible to set prices using this method today.
Set prices as a function of consumers' willingness to pay.
Consumer pricing is all about setting the price at the level of the consumers' willingness to pay. Their willingness to pay varies by market segment, product, service, and sometimes even by the hour. Consumer pricing has changed from infrequent product by product pricing to continuous and differentiated pricing of whole product categories for the different market segments.
Pricing that maximizes consumer spending.
B2C companies must set consumer prices strategically in order to maximize consumer spending through the retail process. It must attract traffic to the online or physical store and at the same time successfully convert shoppers to buyers. Effective pricing inspires consumers to increase the size of their transactions and gives consumers a reason to return by creating true customer loyalty. Too many retailers focus on getting a lot of traffic but forget to incorporate their in store marketing expenses into their pricing calculations.
Pricing in a multi-channel market.
As multiple channels have developed, companies debate the questions of how much to charge in each channel and whether the market will allow any price differentiation between channels. PriceGain's expertise and methods have helped many B2C companies understand the true differences in their customers' willingness to pay for different products – including competing products – in different channels, through owned channels as well as through third party channels. Using this knowledge and understanding of the market, PriceGain has optimized pricing of consumer products and services in multiple channels and realized major profit improvements for its clients.
PriceGain has helped companies in a wide variety of B2C market segments to improve their profitability through more effective pricing, including:
