The Role Of Price Positioning – Daymon Retail Insights

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The Role Of Price Positioning – Daymon Retail Insights

Price positioning plays a key strategic role when it comes to introducing new solutions to the market, according to Daymon

When launching a new product on the market, price should be a key consideration – but it is far from an exact science.

Defining optimal price positioning is based on thorough knowledge of what is known as the ‘3 Cs’ – the company (incorporating its strategy, objectives and capabilities); the customer (and his or her relationship to the product); and the competitors (i.e. other players in the market).

In addition, it is the 3 C’s, together with the product specifications, that help to determine the buying price.

Shopper Perceptions

Fuelled by inflation and the cost-of-living crisis, recent studies have revealed a common denominator evident in all markets – consumers perceive prices to be higher than they actually are, even if this is not necessarily the case.


With price a key decision maker for shoppers on determining what products they buy, hitting the sweet spot before products hit the supermarket shelves is crucial.

It is essential for brands to deliver what the consumer wants at an affordable price. But the question remains – what does ‘affordability’ mean? It comes down to two core factors, on the one hand, the consumer himself or herself, and on the other, market competition.

In the recession of 2008/09, for example, shoppers in the UK shunned organic products, due to higher price considerations in the category. French shoppers, however, maintained their loyalty to said products, due to their willingness to support domestic producers in a constrained economic environment.

The same was true during the recent pandemic, with consumers continuing to purchase local and healthy products despite the uncertainty in the marketplace.


With this in mind, it’s critical for retailers and manufacturers to comprehend not only what consumers want but also how the market and its major players are positioning themselves.

The Role Of Private Brands

There is a correlation between private brand penetration and price positioning – such as the strength of private brand in a particular category – and this should be taken into consideration when defining price guidelines.

At the same time, this correlation should not be the main determining factor governing price positioning in said category, as price consistency also needs to be addressed. In addition, macro categories can also contain many nuances when explored at a granular level.

Therefore, while the strength of private brand penetration is a useful barometer when it comes to the price setting process, there are no hard and fast rules, or mathematical formulas for determining the correct pricing approach in a particular category.


Retailers and manufacturers need to think beyond a ‘one-size-fits-all’ approach, as well as develop a deep understanding of a particular category before commencing the price planning process.

Daymon explores this in more detail in its latest Perspective report, Price Positioning – Are You Aiming At The Right Target?, which includes three useful examples from three different grocery categories – muesli, diapers and olive oil.

You can download that report by clicking here.

© 2023 European Supermarket Magazine – your source for the latest private-label news. Sponsored content. Click subscribe to sign up to ESM: European Supermarket Magazine.

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