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Price Pack Architecture: Democracy in CPG Innovation

Volume XVIII, Issue 41
October 27, 2016
Summary

What do 7.5-oz Coke “mini cans,” Heinz “Fridge Fit” ketchup bottles and Campbell’s Ready-to-Serve soups have in common? All are food-packaging innovations borne out of consumer demand, as well as customers’ willingness to pay extra for unique features and benefits that have ultimately led to profitable bottom-line growth in flat or declining categories. In many instances, these breakthrough concepts required only minor changes to existing packaging and size, yet paid major dividends in terms of added convenience.

While successful innovations are often hit-or-miss propositions, the emergence of cutting-edge research known as price pack architecture (PPA) has helped take the guesswork out of the process, allowing consumer packaged goods (CPG) companies to design new product variations based on consumer demand.

This Executive Insights delves into the PPA process and looks at PPA innovation in the food industry to help CPG companies gain greater clarity on whether consumers are willing to pay extra for premium, economy and middle-tier offerings, then set pricing gaps accordingly.

http://cdn.lek.com/sites/default/files/1841-Price-Pack-Architecture_Executive-Insights.pdf