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Price Increases in Times of Cost Inflation

When cost pressures demand a price increase, knowing how much to increase — and what the consequences will be — is critical. Will shoppers accept the new price, or will they trade down, switch brands, or leave the category altogether? This page introduces a structured approach to analysing and optimising price increases using real-world sales data. We explore how to estimate price elasticity, assess shopper willingness to pay, and evaluate post-price-move outcomes — so you can make pricing decisions that protect both profit and long-term brand health.

Price Elasticity 

Quantify how sensitive your shoppers are to price changes across segments, packs, and brands.

Conjoint Analysis & Willingness to Pay

Use choice-based modelling to identify price thresholds and perceived value drivers.

Source of Revenue

Decompose sales shifts: where did you win volume, where did you lose, and why?

Optimisation Scenarios &
Risk Analysis

Compare multiple price strategies under different assumptions and risk profiles to make informed decisions.

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Case Study: Introducing a Premium Pack – How Conjoint Analysis Guided the Right Price Point

Context:
A coffee brand was preparing to launch a new aluminium capsule range targeted at sustainability-conscious, premium shoppers. The product offered a superior taste profile and more environmentally friendly packaging compared to their existing capsules.

Challenge:
Management needed to determine:

  • How much more consumers would be willing to pay for the new features

  • Whether the premium version would cannibalise the existing range or grow the overall category

  • What pack size and price combination would maximise value perception

 

Solution – Conjoint Analysis:
The brand conducted a conjoint analysis study simulating different product configurations:

  • Attributes tested: material (plastic vs. aluminium), flavour profile, pack size (10 vs. 20 capsules), price points

  • The results revealed that the environmental benefit and taste differentiation justified a 10–15% premium over the existing line.

  • The optimal offer was a 20-capsule aluminium pack priced 12% higher than the standard plastic pack.

 

How Accuris added value:
Accuris managed the project end-to-end and translated the conjoint results into commercial scenarios:

  • We validated the willingness-to-pay thresholds against historical elasticity patterns

  • We modelled different price ladders and forecast share of sales from new vs. existing users

  • We simulated cannibalisation vs. incremental gains using our Source of Business® framework

 

Outcome:
The client launched the new pack at the recommended price point, achieving 8% category expansion in premium retailers and 18% of volume increase sourced from competitive switching.

Willingness to Pay

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Case Study: Managing Volume Risk During a Price Increase – Using Elasticity from Scan Data

Context:
A mainstream yoghurt brand planned a 6% price increase to offset rising dairy and logistics costs. However, the commercial team was concerned about losing share to private labels and promotional-heavy competitors.

Challenge:

  • Which SKUs were most at risk of volume loss?

  • Would the 6% increase result in significant trade-down or loss of category share?

  • How could the increase be implemented with minimal disruption to brand performance?

Solution – Price Elasticity Modelling:
Accuris analysed two years of EPOS data from major grocery retailers to estimate base price elasticity across the full portfolio:

  • Elasticity was modelled at SKU level, accounting for retailer, pack size, and promotional support.

  • Seasonality and promo lift were adjusted to isolate the true base price responsiveness.

Key findings included:

  • Single-serve SKUs had high elasticity (-2.4), indicating strong substitution risk.

  • Family-size packs showed moderate elasticity (-1.2), with potential to absorb the increase.

  • Price-sensitive retailers showed above-average trade-down behaviour to private label when the price gap widened.

How Accuris added value:

  • We clustered SKUs by elasticity and recommended different pricing strategies per cluster.

  • Accuris simulated a tiered price increase: applying the full 6% to low-elasticity SKUs, while limiting the increase to 3–4% for high-risk SKUs.

  • We modelled expected volume loss and offsetting profit gains to support retailer negotiations and internal approvals.

Outcome:

  • The client implemented a differentiated price strategy that preserved 95% of planned margin while limiting volume loss to 2.3% overall—versus an expected 5–6% under a flat increase.

  • Post-event diagnostics confirmed strong recovery of baseline sales within 8 weeks, with no lasting share loss.

Price Elasticity

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Case Study: Redesigning the Promotion Strategy to Improve Profitability and Reduce Cannibalisation


Context:
A European snacks company was running frequent price promotions across its crisp and nut brands to maintain market share. Despite high promotional intensity, overall profitability was declining, and internal stakeholders were unsure which promotions were truly effective.


Challenge:

  • Which promotions were driving incremental sales, and which were simply cannibalising baseline volumes?

  • Was the company over-relying on deep discounts with limited ROI?

  • How could the promotional calendar be restructured to improve margin without damaging volume?

Solution – Promotion Optimisation with Source of Business®

 

Diagnostics:
Accuris analysed 18 months of retailer POS data across all major accounts:

  • We decomposed each major promotion using our Source of Business® framework to measure:

    • True incremental volume

    • Cannibalisation within the portfolio

    • Competitive switching

    • Stockpiling behaviour

  • Promotions were classified into high-return, neutral, or destructive based on volume source and profit impact.

 

Key insights:

  • Only 35% of promotional volume was truly incremental; the rest came from internal switching or time shifting.

  • Deep discounts (30% or more) delivered the worst ROI and often pulled forward volume without expanding category sales.

  • Promotions on stronger brands with larger displays created higher category expansion and retailer value.

 

How Accuris added value:

  • We redesigned the promotional strategy around fewer, higher-quality events, prioritising:

    • Volume-plus mechanics (e.g. “buy 2, get 1”)

    • Strong brands with high pull power

    • Retailers with larger display space

  • Accuris provided a playbook of best practices, tailored to each retailer, including risk and return estimates for each promo type.

 

Outcome:

  • In the 6 months following implementation, promotional volume was down 12%, but promotional profitability increased by 27%.

  • The company achieved better trade investment efficiency, gaining retailer trust by shifting towards mutually beneficial promotion models.

Source of Revenue

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Case Study: Redesigning Pack-Price Architecture to Balance Value Perception and Profitability

 

Context:
A leading household cleaning brand had accumulated a fragmented portfolio of SKUs across multiple retailers—triggered by years of tactical launches, retailer-specific packs, and price inflation.
The result: confusing price ladders, cannibalisation between packs, and growing pressure from private label.

 

Challenge:

  • Were shoppers trading up or down within the portfolio based on price gaps or perceived value?

  • Which packs had become obsolete or margin-dilutive?

  • How could the brand rationalise its range and build a more coherent, profitable pack-price structure?

 

Solution – Pack-Price Architecture Analysis Using Elasticity and Source of Business®:
Accuris conducted a multi-layered review using sales, promotion, and shopper data:

  • Elasticity modelling revealed where price gaps between SKUs were too narrow or too wide.

  • Our Source of Business® engine identified which packs gained volume via cannibalisation vs. competitive switching.

  • We mapped out pack-price ladders by retailer and pinpointed gaps, overlaps, and value perception issues.

 

Key insights:

  • Two mid-size SKUs were cannibalising each other, offering similar value at similar price per litre.

  • A new XXL pack was driving strong volume but low profit, attracting loyalists who previously bought higher-margin packs.

  • There was a missing entry-level pack in key retailers, ceding share to private label.

How Accuris added value:

  • We created a recommended architecture with:

    • Clear role and price positioning per pack

    • Fewer but better-differentiated SKUs

    • Increased perceived value steps across the range

  • Simulated alternative architectures to show expected changes in volume mix, profit, and consumer switching.

 

Outcome:

  • The brand rationalised its range from 12 to 8 SKUs.

  • After implementation, mix improved significantly, with a 9% increase in average selling price and a 6% gain in gross margin.

  • Retailers welcomed the clearer range and supported the relaunch with secondary displays and improved shelf placement.

Pack-Price

A Different Perspective 

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Transformative RGM

Unlike traditional consultancies that focus on incremental improvements, we challenge the status quo with zero-based planning, building strategies from the ground up. By tailoring solutions to the unique characteristics of each product category and sales channel, we reject the one-size-fits-all approach, enabling us to deliver truly specific and transformative strategies.

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