May is Celiac Awareness Month. If you have gluten free products, now is a great time to promote.
Archive for the ‘Uncategorized’ Category
Pricing Strategy
23
Mar
Pricing your product correctly will greatly impact your success. Do your homework. Look at your competitors’ product and compare price by weight, packaging style, ingredients, product features and distribution.
When developing a pricing strategy take into account your branding, marketing and packaging decisions. Understand who is involved in getting your product into the marketplace and consider the cost associated before the consumer buys your product. One method to develop your price strategy, is to start with a suggested retail price the consumer is willing to pay for your food product and then work backwards. If you end up with a negative figure then you will need to examine areas to cut costs and arrive at an acceptable profit margin.
First, know your COGS (cost of goods sold) or the direct expenses related to the cost of producing your product. This involves the cost to manufacture, labor, packaging materials cost and ingredients or raw materials.
Next you need to know the cost to get your product to the stores or the distribution channel costs. Factors that also play a role in the pricing strategy are the costs associated with distributors, freight carriers and distribution centers fees, broker fees and sales, marketing, and promotions. Additionally, other “hidden charges” exists that affect the price include slotting fees (the cost a retailer asks just to put your product on the shelf), demo fees, merchandisers, temporary price reduction requirements from the retailer, shrinkage, advertising, various retail ‘fees’, taxes, and more. If you are planning to sell your product in other countries, don’t forget costs associated with special packaging, customs and duties, and currency fluctuations outside the US.
Lastly, you must also understand the ins and outs of margin, mark-up and commissions associated with distributors, brokers and retailers. Study the market to determine what works and what doesn’t, and how to price your product for profits while giving your consumers a good value, without losing it all in the process. With careful research and a complete understanding of the marketplace, your goal is to try get your product priced right the first time.
Branding Strategies
17
Mar
Branding
There are may ways to brand your product for sale to the trade and to consumers.
- Your Own Brand: Use your own company name and/or create separate brand names for your product line or product
- Private Label: You package your product for another product company who can market your product as their own.
- Control Brand: Packaging your product for exclusive distribution in a given geographical area or specific markets.
- Co-Branding: This can be various combinations of the above options.
It is common for a company to do some or all of the branding strategies listed above. Research and make a branding plan to successfully fulfill your long term goals.
Positioning
16
Mar
Positioning
To properly position your product, marketers often refer to the Five Ps of success. Focus on having:
- The right Product
- Packaged right
- Priced right
- Being at the right Place at the right time
- Maximize Promotional opportunities
- Saturate all market places for greatest consumer availability
Positioning your product requires consideration of many factors. Most importantly, after careful research of the marketplace, offer a product that will appeal and fit the needs of the greatest number of consumers, as well as your target retail trade channels and the distributors. Keep in mind that successful products are not just sold to be on the retail shelf but rather must be purchased repeatedly by the consumer. Other points to consider include, seasonality, local traits, and economy.