Revenue and Competitive Implications
\nRevenue and Competitive Implications
\nof becoming
\na Charitable Supermarket Brand
\n1
\nWho We Are \u2013 Frontier Pricing
\n\u2022 Frontier Pricing is an independent research Firm specialising in applying
\nbest-practice quantitative techniques to help our clients optimise pricing to
\nmaximise revenue. We provide accurate estimates of:
\n\u2022 Demand curves, revenue curves and price elasticity.
\n\u2022 Accurate estimates of the optimal price point
\n\u2022 Modelling of the impact of \u201cframing\u201d through advertising and marketing,
\non consumer choice, willingness to pay, demand and brand preferences
\n\u2022 A generic example of our output is set out in Slide 3
\nCurrent Price
\nOptimal Price
\n3
\nRevenue: +10% to +40%
\nProfit Margin: +60% to +400%
\nOptimising Pricing to Maximise Revenue
\nREVENUE
\nPRICE
\nThe Cliff
\nWho We Are \u2013 Percent
\n\u2022 Percent is a for profit\/for purpose Company that provides software, platform
\nand infrastructure solutions that:
\n\u2022 Allows Companies to close the purpose\/awareness gap with their
\ncustomers and stakeholders
\n\u2022 Enables \u201cdoing good\u201d in every financial transaction
\n\u2022 Works with Companies to provide bespoke and preferred methods to
\nachieve these objectives
\n\u2022 www.poweredbypercent.com
\nImagine: Your preferred supermarket has just released an advertising
\ncampaign which communicated that for their homebrands, at the
\ncheckout, they will donate an amount of the total purchase price of the
\nhomebrands to the charity you prefer.
\nThree Different Experimental Conditions
\n0 1 2
\nPlacebo Condition
\n5
\nImagine: Your preferred supermarket has just released an advertising
\ncampaign which communicated that at the checkout, you will be able to
\nmake a donation to the charity of your choice simply by tapping your card.
\nWhat We Did
\n\u2022 We utilised discrete choice modelling (DCM) methods embedded within framing
\nconditions (see slide 5), thus fusing methods from behaviour economics and
\neconometric modelling. Discrete choice analysis presents customers with tradeoffs among competing products or services.
\n\u2022 DCM works on the basis that all transactions involve a choice.
\n\u2022 This choice includes trade-offs between price, features, brand, advertising (interalia)
\n\u2022 DCM models the probabilities that consumers with given profiles buy\/don\u2019t buy
\nproducts with certain configurations in a competitive marketplace
\n\u2022 DCM also provides estimates of marginal utilities
\nWhat We Did \u2013 2
\n\u2022 We sampled 500 consumers who frequently buy cornflakes in Australian
\nsupermarkets
\n\u2022 We assigned participants to one of the 3 framing conditions outlined in Slide
\n5 to the subject\u2019s preferred supermarket
\n\u2022 After being exposed to the framing conditions, participants moved to the
\nchoice experiment
\n\u2022 We measured output variability in relation to subsequent price curves and
\nshift of preferred supplier of cornflakes pursuant to the various framing
\nconditions.
\nWhat did the Control Establish
\n\u2022 The purpose of the control condition is to establish consumers\u2019 price sensitivity as
\na result of their current knowledge (no framing).
\n\u2022 Here we discovered that house brand 1 is currently underpriced. If the price was
\nincreased by 20%, demand would only decrease by 5%, resulting in a 14% increase
\nin revenue.
\n\u2022 The optimal price is most probably even higher, however we only tested a price
\nrange of +-20% in this research.
\n9
\n\u201cHouse Brand 1\u201d Cornflakes: Control Condition
\nREVENUE
\n$2.50 $3.00
\n(+20%)
\nDEMAND
\nPRICE
\nRevenue: +14%
\nOptimal Price
\nControl Revenue Control Demand
\n100%
\n115%
\n100%
\n95%
\nVolume: -5%
\nCurrent Price
\nCondition 1 \u2013 What happens when the
\nsupermarket donates?
\n\u2022 Having established the control curve, we can see that a donation on the part
\nof the supermarket will result in the entire demand curve being uplifted
\nconsiderably.
\n\u2022 At the current price, consumer demand increased by 22%
\n\u2022 Even at the higher (+20%) price, consumer demand still increased by 17%
\n\u2022 Overall, we can see consumers are far more likely to chose the House Brand
\nCornflakes over the competition, due to the positive brand effects of \u201cdoing
\ngood.\u201d
\nRevenue: +34%
\n11
\n\u201cHouse Brand 1\u201d Cornflake: Condition 1
\nREVENUE
\n$2.50 $3.00
\n(+20%)
\nDEMAND
\n122%
\n135%
\n112%
\n122%
\nOptimal Price
\nPRICE
\nControl Revenue Control Demand Cond 1 Revenue Cond 1 Demand
\n100%
\n115%
\n100%
\n95%
\nCurrent Price
\nVolume: +17%
\nVolume: +22%
\nRevenue: +22%
\nCondition 2 -What happens when the supermarket
\nmakes it seamless for you to donate?
\n\u2022 The ability to provide frictionless facilitation for the consumer to donate to
\ntheir choice of charity also creates an increase in demand though this is
\n(unsurprisingly) effected by any subsequent price increase for the underlying
\nproduct.
\n\u2022 At the current price, donation facilitation would result in a 13% increase in
\ndemand however this does reduce to 0% as price is increased by 20%.
\n\u2022 There is however a benefit\/attraction for the consumer to allow ease of
\ndonation, subject to end price.
\nVolume: +13% Volume: +-0%
\n13
\n\u201cHouse Brand 1\u201d Cornflake: Condition 2
\nREVENUE
\n$2.50 $3.00
\n(+20%)
\nDEMAND
\n113%
\nRevenue: +15%
\nOptimal Price
\nPRICE
\nControl Revenue Control Demand Cond 2 Revenue Cond 2 Demand
\n100%
\n96%
\n100%
\n115%
\n113%
\nCurrent Price
\nRevenue: +13%
\nMarket Share Implications
\n\u2022 The results of the experiment not only reveal an uplift in shopping preference to that
\nSupermarket (Supermarket 1), which offers a donation but importantly, this share also
\nincludes an active \u201cswitch\u201d from the main competitor (Supermarket 2) not offering the
\ndonation.
\n\u2022 In the control condition Supermarket 1 (green) only had 13.5% market share for Cornflakes
\nwhereas Supermarket 2 (red) had 15.2%. However, if Supermarket 1 commits to donate an
\namount of the total purchase price of the housebrands to the buyers preferred charity
\n(Condition 1), its market share of cornflakes jumps up by over 20%. At the same time, the
\nmarket share of the main competitor (Supermarket 2) drops by 22%
\n\u2022 This demonstrates that charitable giving can be seen as a method to increase consumer
\ndemand and at the same time an \u201coffensive\u201d competitive strategy to weaken rivals and
\ncapture their market share.
\nControl
\nWoolworths CondiNonn 2
\n0.0% 7.5% 15.0% 22.5% 30.0%
\n16.4%
\n13.5%
\n11.9%
\n15.2%
\nColes Woolworths
\nCondition1
\nMarket Share: Control vs Condition 1
\n28.7%
\n28.3%
\nSupermarket 2 Supermarket 1<\/p>\n
AssignmentTutorOnline<\/p>\n
——–<\/p>\n
Implications for Revenue and Competition
\nThe Financial and Competitive Consequences of Becoming<\/p>\n
a Charitable Grocery Store<\/p>\n
1<\/p>\n
Frontier Pricing \u2013 Who We Are<\/p>\n
\u2022 Frontier Pricing is a private research firm that specializes in the use of<\/p>\n
Quantitative strategies that are best-in-class to Help our clients in optimizing pricing<\/p>\n
maximization of revenue We provide reliable estimations for the following:<\/p>\n
\u2022 Price elasticity, demand curves, and revenue curves.<\/p>\n
\u2022 Accurate predictions of the best pricing point<\/p>\n
\u2022 Simulations of the effects of “framing” in advertising and marketing<\/p>\n
impact consumer desire, willingness to pay, supply, and demand<\/p>\n
\u2022 Slide 3 shows a generic example of our output.<\/p>\n
Price at the moment<\/p>\n
Optimal Cost<\/p>\n
3<\/p>\n
Revenue: +10% to +40%<\/p>\n
Profit Margin: +60% to +400%<\/p>\n
Optimising Pricing to Maximise Revenue<\/p>\n
REVENUE<\/p>\n
PRICE<\/p>\n
The Cliff<\/p>\n
Who We Are \u2013 Percent<\/p>\n
\u2022 Percent is a for profit\/for<\/p>\n","protected":false},"excerpt":{"rendered":"
Revenue and Competitive Implications Revenue and Competitive Implications of becoming a Charitable Supermarket Brand 1 Who We Are \u2013 Frontier Pricing \u2022 Frontier Pricing is\u2026<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9033,7586,1386,7589,9034,9031,7587,7588,7584,7585,9032],"tags":[8809,7838,8811,8808,8813,8807,8806,8814,8810,8812],"class_list":["post-106912","post","type-post","status-publish","format-standard","hentry","category-assignment-help-uae","category-best-dissertation-writing-service-in-australia","category-best-research-paper-writing-services-in-usa","category-capstone-project-writing-service","category-cheap-essay-writing-services-china","category-essay-writing-service-usa","category-legitimate-phd-dissertation-writing-services-usa","category-term-paper-writing-service","category-thesis-writing-service-in-canada","category-uae-best-dissertation-writing-help-service","category-write-my-essay-australia","tag-best-master-thesis-writing-service","tag-best-thesis-writing-services","tag-cheap-thesis-writing-services","tag-master-thesis-help","tag-master-thesis-writing-service","tag-thesis-help-online-free","tag-thesis-writing-help-online","tag-thesis-writing-services-cost","tag-thesis-writing-services-near-me","tag-thesis-writing-services-reviews"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/106912","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=106912"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/106912\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=106912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=106912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=106912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}