Margin = Pricing Strategy--It’s a Real Balancing Act
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- Part I
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DSR Dave has a few suggestions on how to achieve the margin you need to make, and keep your customers in business plus making money.
Miesse explains it takes some work, but it’s worth it to get your calculator and your customer’s scales out and start weighing the yields and portion sizes. Breaking things down to the basics is a must if you’re going to have any chance of helping your customers which ultimately will help you.
Pack sizes on the same kind of product are one of those little things that you really have to pay attention to because a lot of the times, case pack is the reason you win or lose the price opportunity/war. For example, 4/1 hamburger patties sold by one rep in a 9 pound case versus 4/1 patties sold in a 12 pound case will have a price difference due to the case size.
DSR Insights: Pack Size = Price Per Case Difference to Street Customers
DSR Dave Miesse explains how a pack size can either make a product a star on an Independent Operator’s menu or not make it to the menu at all. Price per case is a weekly eye-popping event to an Operator who is watching every penny they spend in these new economic times. Having a month’s worth of inventory on an independent operator’s shelf used to be tolerated, but not any longer.
If a case of your product has a price that stands out on the distributor’s invoice, that product will be questioned. “Why are we paying so much for that product? Can’t we find something just as good, cheaper?” Well, the answer will be answered ten different ways by ten different DSRs.
Your product might cost about the same per piece as your competitor, but they’re getting the business because their case-pack was smaller, for example, 10lbs. vs. 15lbs. or 2/1gal. vs. 4/1gal. or 4/1lbs. vs. 6/1lbs.
Contact AFDR and schedule a Phone Focus Group with DSRs so you can check up on your products to see if maybe pack size is the reason you’re product is not selling as much on the street as you thought it would. We record these calls so you can share them with the rest of your team and “mine the nuggets” of insights.
Listen to a short audio on this subject:
- DSR Insights
“AFDR, Your Brand Connection to the Street Sales Force.”
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