An effective brand price architecture is important in the FMCG industry because it can help companies appeal to a wider range of consumers and increase sales. By offering products at different price points, companies can target consumers with different budgets and preferences. It can also help companies to differentiate their products and avoid cannibalizing their own sales by offering too many similar products at similar price points.

But what does it really mean? And much more importantly, what happens when one tries to “appeal to a wider range of consumers and increase sales”?

Can appealing to wide range really drive sales? Is the solution to the constant need of getting higher and higher volumes a wide / vast portfolio? In our humble opinion – no it isn’t. And this is where a proper application of Brand Price Architecture comes in, especially for the FMCG industry.

Firstly, it is not always good to want to win in all price bands. I really can’t think of any FCMG Brand that plays across Super Premium / Premium / Value for Money / Affordable and Cheap. Secondly, having a vast range of flavours, pack sizes, etc. do not necessarily drive Incremental Volumes. Yet, a walk down any Supermarket aisle will show you a plethora of examples of brands wanting to “appeal to a wider range of consumers and increase sales”.

To add muscle to our argument, let us give an example of a FMCG Category that has always been a particular favourite of ours when we think of Brand Price Architecture. It is the Carbonated Soft Drinks Category. You will find a limited number of flavours and SKUs. Yes, they also introduce limited time launches – but this is done after careful consideration to drive excitement in an already established category. The Price variation for the same product is truly astonishing – simply take all the SKUs and calculate the Average Price Per Unit and you will be amazed. The much sought for Premiumization is achieved then and there!

So, the next time there is a discussion on adding more sub-variants to “appeal to a wider range of consumers and increase sales”, ask one simple question – Will this bring Incremental Buyers? If yes, go ahead. If not, we suggest you proceed with caution.

If you found this interesting, please do reach out to us to see how we can help you drive data driven business growth.