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Natural Pricing's New Paradigm: Part 3

By: Darrin Duber-Smith


(Continued from Part One)


In short, the lazy days of pricing in the natural products industry are probably on the wane. Just as marketers had to step up their collective game in the 1990’s to make products more palatable to a market that was rapidly expanding beyond the traditional “hippie” base, marketers must now face a new reality with regard to pricing. And this shift promises to be far more painful than the last one. Many brands will not survive the coming consolidation when the market finally does begin to slow.

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Here is some advice. Use your brand strategy as a starting point for pricing. “Price” follows “Product” and use the “Five C’s of Pricing” as a guide for determining your suggested retail price point, considering all “Five C’s” in your decision, but perhaps with a focus on one over the others for purposes of product and brand positioning. Isolating each “C” and looking at it as part of the whole pricing picture can help you better justify the final price point you decide upon.

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Do aim for consistency across related sku’s in your product mix. Products within product lines, for example, should be priced consistently. It is also important to understand which elements of pricing you can control and which ones you cannot. For example, most marketers have more control over costs and the suggested retail price point than they do channel. Assessing supplier costs, projected product velocity, channel relationships/options, competitive pressures, and consumer attitudes/behaviors on an ongoing basis is a must. The “Cs’” should harbor no surprises.


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Finally, always have an eye on lowering prices and increasing volumes. These days, this industry has precious little room for high-end players that offer questionable added value while commanding high price points. Marketers of branded products will have to take pricing somewhat more seriously in this new paradigm. In the words of baseball hall of famer and philosopher, Yogi Berra, “The future ain’t what it used to be!"