Case Study

Predicting the impact of unprecedented price increase on marquee brand

In a developed Asian market, a Client category was to see around 100% price increase across the board on government orders. There had been no major price change in the market for this product in almost ten years; the client was worried about the fallout of this shock price increase especially on their premium, international-quality brand which was also their biggest brand in terms of volumes.

The client considered holding back the price and absorbing the excise impact for the first few months before increasing their price. This could result in huge monetary losses without any volume gain and hence needed assurance on what would be the likely gain if they went ahead with this strategy.

Kantar IMRB helped the client quantify the impact of this tactic using valueR, its proprietary pricing tool there being no new SKUs or any other complication beyond the price change.

The model results predicted unexpected gains for the client’s brand if they followed through on the price hold-back tactic. When the market results came in, the predictions were within 10% of the actual change in the share. The client managed to gain the volumes that they had been attempting for years with a one simple move backed by a sophisticated modelling.