FOCUS 27
A conversation… by TIM KELLY, Consumer Markets Senior Adviser F
or consumer goods companies, pricing is critical, but I believe there is enormous room for improvement in the way it is handled. For consumer goods companies, pricing is critical, but I
believe there is enormous room for improvement in the way it is handled. The reason pricing is so important for this sector is because promotions typically account for the biggest expense on profi t and loss (P&L) statements, though it won’t necessarily be clear where to fi nd that expense. It won’t be contained in a neat line under pricing, because it is extremely rare to fi nd a consumer goods business with a pricing manager let alone a whole pricing department.
Limited governance regarding investment in promotions also means that companies can choose where to include this spend. For these reasons, pricing will typically be split up in different buckets or invariably simply buried in the difference between gross and net sales. Scattering the numbers suits many companies because of the general lack of tools capable of measuring this expense. It is notoriously diffi cult to predict the effectiveness of a promotion, manage it and evaluate it afterwards and, typically, it doesn’t deliver the anticipated benefi ts.
Pricing consumer goods is a tricky balancing act that requires companies to maintain brand integrity while fi ghting off the competition. So how can this be achieved?
© 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
BACK TO CONTENTS
PRICING
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63