Understanding Promotional and Branded Pricing

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Apart from program sales, those food items that have a brand (also known as “Value-added products”) normally include extra processing to make them different from the fresh ones. Consumers who have a keen eye can spot these additional processes by how they taste or look. This is another way for a company to become distinct from other brands since the buyers will remember how good it tastes.

Of course, the manufacturers will usually own the brand, as well as invest a lot of energy and resources to increase its awareness. The producers would sometimes work together with a distributor of consumer packaged goods, a foodservice operator, or a major retailer so that their lines of work would result in a joint brand. The two core channels for the sales of merchandise that is branded are foodservice and retail, with their own pricing methods.

As an example, the prices for protein or meat items that have been processed and branded are less precarious compared to the fresh commodity merchandise such as fish, mainly because these food items do not spoil as easily. The extra processing that fresh meat undergoes into a branded item normally furthers its shelf life. Processing methods include cooking, injection, canning, and chemical preservation, and the manufacturers regularly make use of frozen meat since the appearance of the finished item may rely more on the processing compared to how fresh the input material is.

The moment that branded food items are sold to the retailers, these are treated the same way as CPGs (Consumer Packaged Goods). The producer will usually finalize an MSRP (Manufacturer Suggested Retail Price) and choose an everyday buyer shelf price that is usually lower than the MSRP. It is up to the retailer if he or she will publish the MSRP and integrate it into the price benchmarking campaign, along with the distributor of consumer packaged goods. The list price (which is wholesale) will be balanced with the MSRP so that the wholesalers and retailers will get a margin.