Background
Venice Body, a renowned brand in the skincare market, sought assistance from Aybee to boost sales by optimizing the pricing strategy of their best-seller product, “Self-Tan Drops.”
The primary objective was to identify the optimal price point among three options: the current price of 35.99€, a lower price of 24.99€, and an intermediate price of 32.99€. Additionally,Venice Body aimed to enhance the perceived value and competitive edge of their product against top competitors.
Übrigens: Alles rund um Marktforschung auf einen Blick gibt es in unserem Marktforschung ABC
Business Questions
- Should Venice Body decrease the price from 35.99€ to 24.99€ or 32.99€
- How can Venice Body improve their product to increase sales?
- How does Venice Body’s product compare to the main competitors?
Methodology
Aybee did a pricing test with three prices: 35.99€, 24.99€, and 32.99€. This test was done using a monadic method, meaning each person only saw one price to keep it fair. Here’s how it worked:
- 600 people took part, with 200 people seeing each price.
- Each person was shown just one price to avoid any bias.
- This helped us see how different prices affect what people decide to buy.
By using this method, we got clear results about which price people liked best.
Results
The analysis revealed that maintaining the price at 35.99€ generated the highest revenue.Lowering the price did not lead to increased sales volume sufficient to compensate for the lower price, indicating that consumers valued the product’s quality at the higher price point.
Detailed Insights and Recommendations
From the test results, it became evident that a price reduction was not the optimal strategy.Instead, the focus should be on reinforcing the product’s superiority to justify its premium pricing. Here are the detailed insights and recommendations:
- Product Superiority - Consumers value the quality of Venice Body’s “Hyaluronic Self-Tan Drops,” noting its low margin of side effects, premium packaging, key benefits, and ease of integration with daily skincare routines. The product’s unique formulation with hyaluronic acid and its dual benefits of self-tanning and anti-aging make it stand out in the market.
- Marketing Communication - Emphasizing the anti-aging benefits and hyaluronic acid content in marketing materials can further enhance perceived value. Highlighting these aspects in the primary and secondary images can effectively communicate the product’s superiority.
- Visual Strategy - Venice Body has already initiated a change by updating the primary image to emphasize the anti-aging effect using a magnifying effect on the packaging. This strategy should be extended to include redesigned secondary images to showcase the ease of mixing the product with daily skincare routines and to highlight the product’s key benefits.
- Competitive Positioning - To strengthen competitive positioning, Venice Body can draw inspiration from competitors like Asam and Garnier, who effectively communicate product benefits through visual strategies. Through our test environment, we know the drivers and barriers for each competitive product. Weal ways know why consumers buy brand A, B, or C. Using this knowledge, Venice Body can refine their messaging and marketing strategies to better compete in the market.
ROI Case for Venice Body
Background
In the first week of May, Venice Body collaborated with Aybee to conduct a pricing A/B/C test and implement recommended changes to their product’s primary and secondary images. The aim was to optimize the pricing strategy and enhance the perceived value of their best-selling “Hyaluronic Self-Tan Drops.” This case study evaluates the return on investment (ROI) resulting from these interventions.
Investment and Costs
- Total cost: 3.000€
Revenue Analysis
- Revenue in March & April (Before the test): 52,252€
- Revenue in June & July (After the test): 67,400€
The implementation of the recommended changes resulted in an increase of 15,148€ in revenue over the two months following the changes.
By investing 3.000€ in a pricing test and implementing strategic changes to their product images, Venice Body achieved a significant increase in revenue, resulting in an ROI of 405%within 2 months. This clearly demonstrates the value of the test and the effectiveness of Aybee’s recommendations in driving sales and enhancing the product’s market performance.
The success of this case study highlights the importance of continuous optimization and strategic marketing in achieving business goals. Venice Body’s collaboration with Aybee notonly optimized their pricing strategy but also provided valuable insights into consumer behavior and market positioning. This approach can serve as a blueprint for other companies looking to enhance their market performance and achieve high returns on investment.
Background
BOI (Board of Innovation), the consultancy and technology company for autonomous innovation, collaborated with Aybee to assist one of their clients, a leading global coffee brand, in evaluating the potential sales uplift from expanding into a new product category.The primary objective was to assess the incremental impact on revenue and market share by introducing new products. Two new products were tested, and the key business question was whether launching two brands instead of just one would lead to significant incremental growth or cannibalization. At the time of testing, the client did not have any products in this category on the market:
- Scenario 1: Featuring 7 products (one set of 3 new products from BOI’s client and 4 products from competitors).
- Scenario 2: Featuring 10 products (all products from scenario 1 plus a second set of 3 new products from BOI’s client).
Business Questions
- How do the new products from the customer perform relative to the competition?
- What is the incremental revenue and market share gained by launching the additional products? Or do I cannibalize my existing products?
- How can the coffee brand optimize its product and product listing to boost sales?
Process
- To conduct the test, Aybee created a realistic Amazon Simulation, while the 1,000 participants were equally divided into Scenario 1 and Scenario 2.
- Participants were able to either select a product or define that they were not interested in any product.
- Aybee measured the purchasing behavior of the participants on the platform, interaction with content, user journeys, etc.
- Afterwards, Aybee collected the participants' “drivers and barriers " by asking open ended questions, helping to understand better their buying decisions.
Results
The analysis revealed that introducing the additional products in Scenario 2 significantly increased revenue and market share. Specifically:
- Scenario 1 (3 products from the customer):
- Number of products sold: 106
- Revenue Share: 42%
- Scenario 2 (the customer’s product from scenario 1 plus the 3 new products from the BOI’ client):
- Number of products sold: 172 (thereof, 123 of the original products and 49 of the new products)
- Revenue Share: 65% (thereof, 44% of the original products and 21% of the new products)
With a 99% confidence level, we confirmed that the launch of a second set of products was incremental to only launching one brand, significantly boosting overall revenue by 72%. This increase was primarily driven by gaining market share from the two largest competitors. Additionally, some marginal gains came from buyers who chose not to purchase in scenario 1 but did in scenario 2.
Detailed Insights and Recommendations
From the test results, it became clear that adding new products was highly beneficial. Here are the detailed insights and recommendations:
- Product Portfolio Expansion (statistically significant with 99%) – Adding additional products significantly increased revenue and market share. Consumers responded positively to the expanded range, indicating strong interest in the new offerings. The brand's total revenue grew by 72%. Therefore, the coffee brand should continue exploring product expansion strategies to capture even more market share.
- Consumer Demand for Larger Packaging – In scenario 1, one of the existing products achieved the highest brand share, over 40%, making it the best-performing product among those tested. The consistently high number of units purchased per consumer suggests a strong demand for larger packaging. The coffee brand should consider introducing larger format to meet this demand and boost sales.
- Price and Packaging Posed Barriers – Despite lower price per serving, many consumers of the new products still found the out-of-pocket price too high.Additionally, the current packaging design for certain variants was seen as unattractive and busy. The brand should consider refining its packaging design to make it more appealing and simpler, while also addressing the perception of high pricing through targeted messaging about value for money.
- Flavors as a Strong Purchase Driver – Across all tested flavors, particularly for one of the new tested brands, specific flavors received highly positive feedback from consumers, with many praising the taste as a key reason for purchase. This shows that flavor innovation plays a significant role in driving product success. The coffee brand should continue exploring new and unique flavors to capitalize on this trend and attract a wider range of consumers while maintaining their stronghold in the market.
