Getting your pricing strategy right in the FMCG space is a careful balancing act. With high competition, savvy shoppers, and tight margins, brands need a pricing model that not only drives profitability but also keeps customers loyal where they always see value.
At Consult Group, we believe that an effective pricing strategy is never a one-size-fits-all approach. Instead, your pricing is a strategic, collaborative process – one that integrates insights from our 30+ year experience, current consumer demand and margin requirements both across the retailer and your business. This detailed approach ensures we asses all aspects of the value chain to help you make informed decisions that support long-term growth.
Why Pricing Strategy Matters More Than Ever
In today’s FMCG market, price isn’t just a number—it’s part of your brand story. Consumers are increasingly price-conscious but also value-driven. The challenge is setting a price that reflects your product’s value, resonates with your target audience, and protects your profit margins.
Mr Warren Buffet, touted as one of the leading retail strategists once said:
“Price is what you pay. Value is what you get. The right price builds trust and drives sales—while the wrong one can close doors.”
This is especially true when you’re trying to break into major retailers. If you haven’t yet, check out our guide to getting your product into Coles and Woolworths – it’s full of practical steps that can make or break your pitch, including the importance of a sound pricing strategy.
The Consult Group Approach: Strategic, Informed, and Collaborative
Our pricing strategy development is built around a cooperative approach. That means working closely with you to understand your product, your target audience, your category, and your goals.
With ongoing range rationalisation across the board and inflation putting pressure on consumer spending, managing your margins and staying on the path to profitability is more important than ever. It’s one thing to know your numbers – but it’s just as crucial to understand the full scope of what you’re committing to. Every product decision impacts your cost structure, working capital, and bottom line. Make sure you’re not just tracking figures, but interpreting them in the context of your broader business commitments.
– Ash McMillan, Co-founder Consult Group, 2025
We consider:
- Competitive landscape analysis – What are others in your space charging, and why?
- Retail margin expectations – Especially important for Coles, Woolworths, or independent grocery channels.
- Cost and supply chain inputs – Accounting for fluctuations in raw materials, freight, or packaging.
- Consumer behaviour trends – What are your customers willing to pay, and how can pricing influence their buying habits?
The goal is to create a pricing model that:
- Protects and improves margins
- Supports sustainable retailer partnerships
- Reflects the real value of your product to the consumer
Try our Profit Margin Calculator to see how small changes in pricing or COGS can significantly impact your bottom line.
Models That Work: Pricing Frameworks That Deliver
Some of the proven models we explore with brand partners include:
- Value-based pricing – Pricing based on the perceived value to the consumer, not just cost.
- Tiered pricing – Offering product variants (e.g., value, standard, premium) to target different segments.
- Promotional pricing – Strategic discounting to drive volume without eroding long-term value.
- EDLP vs. High-Low pricing – Evaluating the best approach for your brand and retail partners.
Each model comes with considerations—but the key is alignment: with your brand position, your operational realities, and your customer expectations.
Understanding CO-OP, Trade and Promotional Spend
When it comes to pricing strategy, it’s not just about what the customer pays—it’s also about what you, as a brand, invest in promotion and visibility.
CO-OP, short for Cooperative Marketing Funds, refers to the funds you contribute to market your product through retail channels. It’s a shared spend that boosts brand visibility, but it also affects your bottom line. While it might look like just another form of promotional spend, CO-OP is more strategic—it’s about where and how you invest to maximise exposure and ROI.
Then there’s trade spend, which includes both:
- Above-the-line marketing (like billboards or out-of-home advertising), and
- Below-the-line activations within the store (think aisle fins, floor decals, and in-store screens).
Promotional spend—often tied to discounts or sales promotions—can deliver a fast uplift in volume, but leaning too heavily on it risks margin erosion.
The trick isn’t spending more—it’s spending smart. Aligning your promotional investment with your pricing model ensures you’re not just chasing short-term gains but building a sustainable path to growth.
Path to Profitability
Achieving profitability requires more than relying on promotions to drive sales. Discounts and sales events may give you a short-term lift, but if your sales strategy leans too heavily on them, your margins – and long-term sustainability – can quickly erode.
A profitable product strikes the right balance: managing costs, pricing appropriately, and generating steady revenue without the crutch of constant discounting. For example, one niche organic snack brand leaned into aggressive discounting to drive trial, only to find margins too tight to sustain growth. By restructuring their pricing, renegotiating supplier terms, and limiting discounts to seasonal windows, they found a more profitable – and still competitive position in market.
If your profitability is fragile, it may be time to take a step back and evaluate the full value chain. From production costs and distribution to retail negotiations and promotional investment—every component has a role to play.
Your Strategy is Your Advantage
In a competitive category, it’s not just the best product that wins—it’s the best positioned. Pricing can make the difference between a listing that sells and one that stalls. It’s not just about covering your costs—it’s about creating value, building trust, and ensuring your growth is sustainable.
If you’re developing your go-to-market strategy, preparing a pitch to the majors, or simply want to tighten up your current pricing, let’s chat. Because the right number can unlock real opportunity.
