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The 10 Pricing Rules Every Brand Should Know

Discover the top 10 pricing strategies to optimize your MAP policy

As a manufacturer, it's up to you to set the prices of your products and your MAP Policy (minimum advertised price) This decision is crucial, as it directly affects your profitability, competitiveness, and market position. That's why understanding the fundamentals of pricing is essential to thriving in a dynamic and competitive business environment. Here are the 10 pricing rules all brands should know

1. Know your market

Before you set your prices, understand your market, your competitors, and consumer expectations. Analyze your competitors' trends, buying behaviors,  and prices to define an effective pricing strategy. Price Observatory gives you access to the price trends of your market, the evolution of price changes by periods, seasons, years. All the prices in your market are logged over 2 years.

2. Identify Perceived Value

Customers pay for the perceived value of your products, not just their production costs. Identify the unique features of your products and communicate them in a way that makes consumers understand their superior value. Detail these features in your product descriptions and make sure your distributors use the right texts.

Pay special attention to  photos of your products to increase their perceived value. In the same way, make sure that your resellers use the most up-to-date images of your products.

Price Observatory allows you to check with one click that all your resellers are up to date in the images and texts you have defined for your brand.

3. Establish your financial goals

Be clear about your financial goals, whether it's in terms of margin, market share,  or profits. Your prices should be aligned with these goals to ensure thelong-term profitability of your business. Repricing tools must take into account these financial objectives, including margin targets.

4. Adopt a Dynamic Pricing Strategy 

Don't set your prices statically. Take a dynamic approach by adjusting your prices based on market fluctuations, competitors, seasons, and promotional events to maximize revenue. Our data collection tools can allow you to track trends in price changes in your market. You can also use this data to inject it into your internal or outsourced tools to determine the best prices for your products through a system of rules or AI.

5. Be Flexible

Offer different options (prices, packs, combinations, etc.) to meet the varied needs and budgets of your customers. This will allow you to reach a wider audience and increase your sales (decreasing prices according to quantity, Bundle, Pack, Lots, Promo, Variation of the same product, etc.).

The Price Observatory tool allows you to automatically collect prices, promotions, strikethrough prices but also decreasing prices, product combinations and batch sales from your distributors and competitors in order to compare your data with theirs.

6. Keep an Eye on Your Competitors

Set up a price watch of your competitors' prices and adjust yours accordingly. Being aware of market movements will allow you to stay competitive and maximize your market share. The features offered by Price Observatory allow automatic monitoring of product references from other brands equivalent to yours. Price Observatory also allows you to track the prices, promotions and stock of private labels.

7. Control Your Distribution Network and your MAP Policy

  • Check that your resellers are complying with your MAP policy with email alert  tools that notify you in real time when a reseller sells below your floor price or when your products are out of stock, for example.
  • Check that the  holding agreements are respected by your resellers (number of references and brands highlighted for example).
  • Automatically monitor  your resellers' prices and promotions
  • Note the aggressiveness of your distributors (which retailer is driving the market down) and identify non-partner sellers and new players on marketplaces  such as Google Shopping or Amazon. Determine who owns the Buy Box.
  • Track  your resellers' stock and product availability to encourage orders and avoid stock-outs.
  • Check that your products are properly highlighted (do your retailers use the right images, descriptions, etc.)
  • Manage  customer  ratings and reviews of your products (should you consider product development or is it a usability issue you can address)
  • Track price variability
  • Keep track of your distributors' prices by period, season and year

All of these features are available in our Price Observatory price intelligence tool.
See information for brands and manufacturers.
View feature documentation for brands and manufacturers here

Having a real-time view of the prices, promotions and stock of your distribution network is essential to enforce your MAP policy and knowing how your products are evaluated is also essential to avoid bad buzz and sales drops.

8. Don't Underestimate the Psychological Effects of Pricing 

Prices have an emotional impact on consumers. Use psychological pricing techniquessuch as high prices, fair prices, "charming" prices (e.g. €9.99 instead of €10), and bundles to influence buying behavior. A high price is automatically associated with a notion of value and scarcity. However, all of this is purely psychological. For example, everyone believes that diamonds are expensive because they are rare. Diamonds are now among the most common gemstones on earth,  yet they are the most expensive gemstones.

9. Offer Purchase Incentives

Use promotions, discounts, and loyalty programs to encourage customers to buy your products. Special offers can boost sales and strengthen the relationship with your customers. Always set an expiry date for your promotions and emphasize the rarity and exceptional nature of your offers in order to encourage people  to take action by creating the fear of missing out on a good deal

10. Continuously Evaluate and Adjust

Pricing is an ongoing process. Monitor your pricing performance, collect  customer feedback, and adjust your strategy accordingly to stay competitive and profitable. Price Observatory's monitoring tools and BI analytics will allow you to generate accurate reports on each pricing action. Customizable dashboards are essential indicators for Key Account Managers (KAMs), Web Marketing Managers and E-commerce Managers.

By following these 10 pricing rules, and with our monitoring tools,  you will be able to maximize your revenue, strengthen your position in the market and ensure the long-term success of your brand.

For personalized advice on the pricing of your products, do not hesitate to contact our team of experts on our Price Observatory website. Contact us for a demo, a real-life test or information

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