Abstract:

This paper seeks to show how the underlying mechanism that determines the selection of differently priced goods acts through the life cycle of individual brands, and how strategic and tactical changes in the price of a brand affect this relationship. Case study material using data from brand price trade-off, Gabor-Granger and experimental panels will be used to address these issues, by giving concrete examples of price optimisation throughout the product life-cycle. Specifically: -How the acceptable price window for a new concept can be conditioned by the price context presented. -The effect of absolute and relative price on potential trial and repeat purchase of a new brand. -Optimising the price of a newly launched "breakthrough" product in a major FMCG market -The implications for tracking the longer term effects of pricing strategy.