People shop at different market channels. Some buy at neighbourhood stores while others shop at large malls.
Buyer also switch channels based on occasion. Those who shop at large stores for bulk monthly purchases, often depend on neighbourhood store for small filler shopping. B2B buyers also show similar preference.
Should the prices be uniform across all channels? Clearly not. The price per litre of Pepsi at restaurant is almost 3x-4x as compared to the family pack that one buys at a large store. Evidently, the buyers have different willingness to pay at different channels.
What is Price Channel Alignment? Price Channel Alignment is a service that helps clients in deciding the price differentiation strategy for each channel.
How is it done? A field study helps us understand the primary purpose of a channel.
Do people explore in one channel and buy at another? What are the ideal features of an exploratory channel versus those of a
purchase channel? Does a particular channel fulfil the needs of a specialised buyer?
Based on the field study we identify the price expectations of a channel.
If an online channel is used mostly for exploratory purpose, there there has to be price similarity between offline and online. However, if a channel caters to specialised buyers, then it could charge a premium.
These findings are further validated with client’s internal experts before recommending a channel pricing strategy.
How does it help the clients? Price Channel Alignment service helps the clients identify the assortment and price for different channels. It also identifies plans to nudge buyers to a higher margin channel.
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