How Can Consumer Packaged Goods Companies Perform Strongly in China?

Managing pricing has long been one of the most vexing challenges for Consumer Packaged Goods (CPG) companies. As consumer goods companies push their distribution further into low-tier Chinese cities, we see continuous margin compressions.

More consumer goods companies are taking a serious new look at their pricing strategies for China to increase household penetration. Successful companies typically tackle pricing across four dimensions:

  • Pricing strategy helps to analyze whether to increase or decrease product pricing
  • Pricing architecture assesses competitor products and designs new offerings targeted towards untapped households
  • Customer and trade execution helps execute the pricing strategy by working with retailers
  • Organizational capabilities help build systems and provide innovative incentives

An understanding of the true cost of products through portfolio and pipeline management, combined with disciplined sales and operations planning, is a feature of strong-performing CPG manufacturers in China where Promotion & Advertising comprise a major investment. Traditionally focused on budgets & marketing, they now look to use strong analytics to tailor their marketing initiatives and drive improved revenue and profitability. CPG companies now leverage Analytics to better understand consumer trends and preferences which can be further leveraged to plan promotions and brand building activities.

Even though China may no longer be a country that provides some of the lowest selling costs, CPG manufacturers will simply have to become smarter at managing the complexity and costs of pursuing growth.

At UpClear, we can help you with this challenge, locally and globally. Whether it is Sales Planning, Trade Promotion Management, or Analytics, we provide best-in-class solutions efficiently and risk-free.

How Consumer Goods Companies Can Manage Complexity and Costs in China – PWC

Pricing for penetration – Bain & Company

Rupal Serrao

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