Alessa group is one of the pioneers in the household appliances distribution industry in the Kingdom of Saudi Arabia. Founded by Hamad Abdullah Alessa in 1935, Alessa distributes today top international brands such as Hitachi, Gibson, Frigidaire, and Chiq and a diverse product line of appliances, electronics and manufacturing refrigerators, freezers, air conditioners, and air handling units, as well as contracting and installation of personnel and commercial air conditioners and air handling units in the Middle East and Africa markets.
Challenge
Our client was facing a major challenge with not being able to grow retailers and hypermarkets due to no pricing alignment, hence no transparency with the consumer. The non-understanding of their consumers and their willingness to pay had led to huge misarrangements on prices, promotions, and calendars with modern-trade retailers.
Scope of Work
HEED has helped Alessa with implementing a full Pricing Strategy:
- Identifying the Consumer’s Perceived Value and purchasing behavior of their products. Applying the Value Equivalence Line on Alessa products versus all the competitors' brands. Identifying their position from the consumer’s standpoint was eye-opening in many insights such as finding some items were on a race with impartial brands.
- Building a new Pricing Strategy: starting with the retail price as the goal based on the former point, we then applied the backward approach, by breaking down the numbers and computing the margins accordingly through the distribution channels of the supply chain journey.
Impact on Revenue
This approach has made a tremendous impact on Alessa’s pricing management, such as:
- Higher ROI on the marketing and promotion actions, especially in coherence with the right-level competitors.
- A stronger relationship with the modern-trade retailers
- Increased Profit Margin and better visibility after applying the science of breaking down the promotion calendar.
Â
