Project Experience

Technical benefits and price structure of competitor's new product highlights need to emphasize performance advantages in marketing communications

Client Situation
R&D personnel can provide insight into a product's component parts to help explain why a certain price point is possible. Our client is one of many international direct sellers of consumer personal and household products. One of its key competitors was reported to be launching a new household product overseas that would compete directly with our client's product at a significantly lower retail price. Our client wanted to gain a better understanding of how the competitor was able to deliver a comparable product at a significantly lower price to help position and market its product.

Fuld Approach
In conversations with the competitor's R&D personnel, we were able to determine the specific technology behind the competitor's product, the key consumer benefits that technology would deliver, the likely marketing claims the competitor would make and the retail price at which this product was going to be sold.

Benefits and Implications
While the competitor was able to price its product at one-third less than our client's product, we learned that it would not deliver the same benefits to consumers. This highlighted the need for our client to emphasize performance advantages of its product in any marketing communications, which would justify its higher price. For more information on price and cost structure in consumer products, contact Michael Sandman at msandman@fuld.com.