Transforming a Legacy Brand - Pricing Strategy

Understanding new-age parents to provide more than just nostalgia

The Situation:

One of the oldest and largest manufacturing brand in the Mother and Baby segment in China is struggling to keep pace with growth. BabyCo* faces sales erosion brought about by intense competition from foreign and local brands, as well as falling birth rates across China. The company were struggling to build a strong digital presence. Existing key competitors and new entrants had already gotten the formula right, generating strong sales and buzz online. Faced with this, BabyCo turned to KeyHole Insights to reposition the brand, through coming up with a cohesive brand, price and channel optimisation strategy to raise greater local and global awareness and to increase sales and profits.

Our team were tasked to assist in repositioning the brand, coming up with a price and channel optimisation strategy, as well as a globalisation strategy. The engagement, which began with just baby bottle, was eventually expanded to 6 other categories, due to it being well received by BabyCo.

At a Glance

+80%

Potential improvement in average margins

+60%

Potential improvement in sales revenue

-1/2

Number of SKUs

Our Approach

Via technology, KeyHole Insights collected dynamic real-time prices and sales volume of BabyCo products as well as that of every competitors on key ecommerce marketplaces. With this, KeyHole Insights were able to analyse the competitive landscape as well as derive the industry demand curve. Using economic principles, KeyHole Insights were able to advise on revenue and profit maximisation prices.

Through our proprietary consumer surveys, we collected further information regarding the consumer journey, optimal pricing as well as top of mind and conversion by geographics, income and demographics from over 7000 consumers. These were then triangulated with the data collected via online channels above, to provide more precise and holistic insights. The consumer journey map was used extensively to inform BabyCo on the most effective marketing and sales channels.

Through this and other social listening and monitoring, KeyHole Insights extracted core product attributes consumers are most concerned when purchasing various categories of products. These information helped guide BabyCo's marketing messages on their product packaging, online marketing collaterals as well as in their SEO/SEM marketing campaigns.

Some of the analysis and solutions delivered as part of this engagement includes:

• Competitive landscape analysis
• Demand curve analysis
• Outlier analysis & case study
• Product pricing recommendations
• Channel strategy
• Product positioning recommendations
• Product packaging marketing recommendations
• Van Westendorp price sensitivity meter
• Globalisation strategy
• Portfolio strategy
• Ecommerce operating recommendations

Recommendations

Some of the recommendations provided to BabyCo include:

• re-weighting their product mix more towards highly recurring products
• re-weighting their channel mix towards more online and flagship
• simplification and streamlining of SKUs
• upgrading of their products line-up, including packaging messages, marketing collaterals to better appeal to end consumers
• a new pricing to reflect the value of these products
• a marketing strategy as well as a globalisation strategy.

* While the name of our client have been changed for confidentiality reasons, the results are real.