20 million price points per year complicate the matter of pricing consumer packaged goods (CPG); with each price point exposed to the further influence of discount, rebate, and trade allowance categories, combined with customer-specific trade terms negotiated by powerful retailers. With so many variables it is extremely complex and time-consuming to determine competitive prices that add to the bottom line and also benefit the final consumer.

With low-profit margins per unit, assigning the optimal price to a CPG is a matter of competitive advantage. With CPG pricing every percentage point matters. A combined research by Nielsen, McKinsey, and GBA has revealed that ‘Pricing winners who adopted best practices in devising a pricing strategy were able to increase unit prices by 1.2 percentage points more than the category average. At the same time, they gained share by growing sales by almost a full percentage point ahead of their peers.’