During April 2020, Brand Reveal conducted the “Day After” survey to understand the impact of the C19 crisis on the Marketing Mix of wines and spirits. This fifth article (out of 6) highlights the views of 79 industry professionals on the Pricing and Promotion evolution in wines & spirits. The key message : look for fresh perspectives and efficiencies.
The C19 situation is raising questions about brands current Pricing and Promotions strategies. Indeed, only a third of respondents declared they wish to keep unchanged their Price positioning and over 40% indicate they will review their price positioning. With Pricing having a direct impact of sales, this element should be reviewed with care as it has direct consequences on volumes and margins.
The survey also shows a modest appetite to grow Promotions budgets (only 23% agree), with a strong 75% indicating a desire to look for efficiencies and savings in pricing and promotions budgets. This is a good sign as Pricing Promotions can range from 30 to 50% from Gross to Net revenue in the drinks industry.
Pricing is not always an easy topic. But it seems that after the (wine) production falls of the past 2 years, the recent 25% import tariffs between the Eu and the US and the post-Brexit likely tarifs, the C19 situation is an invitation to have a fresh look at Pricing positioning and to look for efficiencies in trade and consumer promotional budgets.