Pricing Strategy For FMCG Products

Aliva the new snack from the stable of Frito-lay is being flooded at every retailer these days and being backed by Pepsi's strong distribution network is the added advantage, these packs are available at every retail outlet.For freshers frito-lay is the food and snack division of Pepsi-co which makes the popular snack kurkure and cheetos. both these brands have become a house hold name and have launched many new flavours.Aliva was launched after doing a thorough market research about consumer taste and the ingredients which should go into the product making it healthy,unlike kurkure which is accused of using plastic as an ingredient.

The product is a perfect blend of the Indian Namkeen and biscuits Its been positioned as a healthy snack,and made taking into consideration the palette of Indians, they have added all the spicy flavors in it. the detail which went in the packaging is also quite impressive they have used elements like sunrise in their logo which signifies the start of the day and to be eaten with tea/high tea as most of the snacks in India are consumed with tea.

It has been launched with a TVC and also being promoted heavily by retailers as most of the packs of aliva enjoy a better shelf space in the retail outlet. The only thing which might go wrong with Aliva is the pricing of the product. when price is been set up they have to consider the psychological factors into consideration. They have priced all the packs at 12 Rs unlike many other snacks in that segment which come in packs of 5, 10,20 these are standard industry prices among all the categories now a consumer will never think a product is not affordable to him if he has packs of 5, 10, & 20 and his choice of packs will be dictated by his hunger or requirement.brands like Lays have positioned packs on basis of the size like lays 20 Rs is positioned as party pack and pepsi launched few years with its 200 ml bottle as chota pepsi, that was a smart move as people could relate easily and accepted it. Now a price of 12 is in between 10 and 20 and a consumer who has limited money to spend(kids) and time would think that 12 is costly as it's above 10 and most of the time when exchanging money or transacting he has to either give the retailer the exact denomination or spend a long time to transact and get the change from retailer, to avoid this hassle he might buy a snack which is 10 Rs and he has been eating it in the past and has been satisfied with it.

With prices of raw material escalating companies are not willing to move away from the standard prices of 5, 10 and 20 instead reducing procuring cost of raw materials and also the sizes of the pack. The prices of 5 and 10 lie with in the consumer threshold(J.N.D) any price above 5 or 10 for the respective size is perceived as being priced high. hence companies never move out of this denominations even if the cost of manufacturing increase.

Aliva should have been launched in multiple packs as when ever the product is in the launch/introduction phase they should have sample packs of small quantity and lesser price. which dont hurt the consumer's wallet and induce him to try the product.