Understanding the Pricing Landscape  3/8/2016


Before a company enters a new industry, decides to launch a new product, or tries to determine the best address for a new store location, they invest in understanding the existing landscape. It’s easy to see opportunity and potential by taking an objective view of the competition and potential barriers.

This same type of assessment should be utilized when pricing new or existing items within HBW categories. Understanding the pricing landscape will help you best position your product to reinforce your strategy and then align it with the supporting communication.

Researching the competitive nature of a category to understand the variances that exist will identify saturation points as well as the opportunity. Just because a category may be considered competitive overall does not mean there are not opportunities that exist for more premium or higher margin items. For example, within multi-vitamins best-selling brands like Centrum are very competitive across all channels from mass to drug. 


However, that is not to say there isn’t opportunity for more price premium products that can yield higher margins. Targeted multi-vitamins that are condition-specific, like those for eye health, can achieve much higher margins. The variance in margins for multi-vitamins can range from 16% – 43% across all channels. Understanding the variances that exist between channels as well as within a particular outlet type is important for building a strategic roadmap.

Take Charge!
Packaging and placement are most obvious when considering your strategy. Ensuring that equal energy is devoted to aligning your pricing strategy is critical. Finding that opportunity gap within competitive categories and then refining your communications to the consumer as well as to the retailer will help ensure you meet your performance goals. Whether you utilize HRG’s retail experience and research capabilities or not, understanding the landscape is the first step.

Contact: Julie Bonnell

Director of Operations
Hamacher Resource Group

Julie has 25+ years of professional experience in the retail healthcare industry. Many clients rely on her as a liaison between HRG’s strategic account development and production capabilities, translating clients’ challenges and vision into the tactical approaches that deliver the desired results. She participates in business development activities and the product development strategies required to support them. Julie is part of the senior management team and a member of the owners group.

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