How can brands deal with inflation in input cost?

With wholesale price index showing high inflation rates, brands especially those using oil in their products or food brands – face a challenge to their sales as they are forced to increase prices. The traditional method of taking price increases is to using basic data trends, soft market knowledge and intuition to price products at an SKU level going forward. The brand manager has to price right or stand to lose market share. Not only is it, how much to pass on to the consumer and how much margin to cut at an overall brand level, but at the portfolio level, it how can one take these calls with the lowest risk? Which SKU prices should take the highest price increases and which ones the least? Which brands in the portfolio are the most price sensitive?

Data science offers a more precise guide – computing the price elasticity at a key SKU level can suddenly make this exercise a lot easier. While we still use judgement and intuition, now our gut is better informed and therefore the decisions are much better as they are based on hard data.

As they say, there is opportunity in a crisis, this inflation could be your ticket to a higher market share, at the very least it will save you some sleepless nights ☺