Guest Post - Consumer-centric Market Analytics - Rajaram Kudli

Consumer-centric Market Analytics

Helping Marketers & Consumers survive the Recessionary forces gracefully

By Rajaram Kudli

Price has always been a key dimension of competitiveness in free market, and, pricing has become a scientific art of deception. Isn't the modern pricing mostly determined by demand-supply-information-psychology-marketing, driven by business objectives of maximizing revenue/ profits/ market share et al and enabled by market research & market analytics?

Pricing & Revenue Optimization (PRO) solutions based on the Price Elasticity of Demand models are employed by the marketers to decide on pricing that maximizes revenue or profits or both across consumer segments. Its about figuring out how much can be sold at which price-point to which consumer segments, and cost or value of the product doesn’t find a place in the equation.

Market Mix solutions are employed by the marketers to figure out which channel of marketing returns higher lift in sales to help allocate marketing budget, which again doesn’t consider competitive value of the product.

The too familiar Everyday-Low-Price betrays the competitive pricing driver, and wonder why there’s no Everyday-Right-Price ?

Imagine what it would do to pricing, if the consumers are as informed as the marketers are about which demographic segment they themselves belong to and why they buy what they buy ? and, what are the componets of the price they pay for goods...? Ever wondered what proportion of price of any consumer product is for its quality vs for its marketing cost & brand value? and, is it value-for-money for the consumers? With all my analytic abilities, i haven't been able to figure out ....

Quality and consumer perception are also said to be the weapons of the free market as the pricing is, but both of which cannot be quantified like the price can be and they both suffer at the altar of cheap. And, what about the 'cost of creating consumer perception of superior quality or value which doesn't exist' - which, finally gets passed onto the consumer anyway?

If only we could turn around the Market Analytics to help marketers and consumers to arrive at the happy-middle-ground of value-for-money and vice-versa, wouldn’t it help both to survive the recession more gracefully? A couple of paradigms to consider -

1. Competitive Intelligence for Consumers: Help consumers evaluate the quality & value of what they buy. Competitive Intelligence is a paradigm that's another construct of Market Analytics for Marketers, which could be re-oriented to consumers and delivered directly online or through consumer forums or by marketers themselves at the point of sale.

2. Survival Intelligence for Marketers: Help marketers avoid incurring the cost of deception and share the benefit with the consumer. One could build a pricing solution based on Income Elasticity of Demand models (sort of anti-model to the very familiar Price Elasticity of Demand, which is the premise of consumer retailing & marketing), that captures the relationship between income levels of the consumers and demand for products. A positive Income Elasticity of Demand denotes quality goods and a negative elasticity denotes inferior goods. Such a solution helps determine Pricing-for-Value of goods and still realize the maximum business potential in the times of recession, most immediately reflected in income-levels of the consumers Of course, this could be The Solution for the miseries of bottom-of-the-pyramid consumers, which form the largest consumer segment.

Either or both of the above solutions could be integrated with Loyalty Programs – the emerging tool of marketers to maximize sales and profitability by increasing loyalty of consumers to retail brands.

 

About the author
Mr.Rajaram Kudli is an Analytics SME, and is currently driving several key initiatives in Business Analytics as an Analytics, Education & Innovation Consultant at Independent Consultant. He was instrumental in setting up and driving the highly successful Retail - CPG and Analytics team in his capacity as Program Director at Symphony Services.
Mr.Kudli's core competencies include Business Intelligence/Analytics - Supply/ Cost/Operations/ Customer/ Market Analytics Solutions consulting; Business Consulting & Analytics Solution R&D for Commercial Products/ Industrial Processes; Education, Learning & Development.