During his presentation at the February 17, 2024, industry outlook hosted by Nairametrics, Finance Director of Cadbury Nigeria Plc, Ogaga Ologe, said that magic price points are now a thing of the past for the Nigerian economy.
Ogaga explained that it was impossible to keep the prices of consumer goods at compelling value to make them attractive to consumers to want to buy them.
He stated this at the Nairametrics industry economic outlook 2024 webinar with the theme: FMCG: Sector challenges and opportunities.
Magic pricing in the Nigerian economy
Ogaga who was speaking on unveiling consumer preferences and navigating affordability for fast-moving consumer goods (FMCG) companies in Nigeria said that maintaining the quality of products is expensive.
- “We can’t keep blaming costs on other factors like diesel. These are issues that have come to stay. Manufacturing companies need to make sure that they are still profitable and at the same time not compromising on quality.”
- “Maintaining the quality of products is expensive. Currently, the most preferred brands are not the most affordable so the most affordable are the most preferred.”
- “But you want to maintain quality because as consumers get richer, they would return to the most preferred brands, and they would expect that the quality remains the same.”
- “This is why keeping prices the same is extremely difficult because input costs change every day. This will keep happening until the economy is stable.”
- “Magic pricing is now a thing of the past. The best thing to do is to fix prices that consumers can appreciate because the quality of products remains the same.”
Ogaga further revealed that FMCG companies would have to focus on packaging structures, emphasizing the importance of extensive research, especially for those producing single-serve items.
He advised that these studies should precede any alterations in packaging sizes to comprehend consumer behaviours and prevent potential loss of customers.
Ogaga emphasized that FMCG manufacturers are now competing not only among themselves but also with every product that Nigerians spend money on.
What you should know
- Market pricing points refer to specific product prices strategically set to be so attractive that consumers are highly motivated to make a purchase.
- This price point is strategically chosen to maximise sales, considering factors such as consumer psychology, perceived value, and market competition.
