Blog articles by Robin de Rooij

The COVID-19 crisis and the Corona crash are shaking the context for consumer decision behavior. As a result, the context for net revenue management (NRM) has also been disturbed for consumer goods companies.

Companies must adapt revenue strategies to the new situation, at the same time as consumers are adapting to “the new normal.” To be successful, you need to anticipate and influence consumer decisions in a changing environment. This holds true in times of normalcy, but especially during the recession to come.

Although the COVID-19 crisis is not yet over, learnings from previous crises and knowledge of consumer behavioral frameworks mean we can map out consequences for net revenue management strategies.

So, what should you consider in planning your next moves?

When inflation hits, your pricing strategy inevitably feels the pressure. On the one hand, raising product prices will protect margins. On the other, you can’t risk pricing yourself out of the market. When consumers feel this pressure, their spending habits are likely to change, especially in developing countries and high-inflation regions.

Setting the right price is one of the best ways to positively impact a company’s bottom line. Yet, price-setting is not always top-of-mind nor owned by a single department within a company. This holds true across industries, whether it is consumer goods, healthcare, telecom, finance or technology. Sometimes Marketing takes responsibility for pricing, while other times Finance takes on the task. Often, we find that there exists no pricing strategy at all in companies, and thus, no clear ownership of pricing responsibility.

During harsh economic environments, companies have to make deliberate choices on how to invest marketing budgets to optimize profits. Especially in the competitive FMCG industry promotions are often used as a tool to increase sales. However, what is the most effective type of promotion? And what are the implications of these promotions on your overall product portfolio revenues?