How Can ERP Software Simplify Pricing & Promotions In The Drinks Industry?

Consumers have come to expect price cuts on their preferred brand of pop, or favourite weekend tipple. And if the price isn’t right, beverages and drinks suppliers could find consumers reaching for the nearest competitively priced rival brand.  Loyalty isn’t a given in the drinks industry. Assuming, however, that the costs of production are relatively stable week-on-week, why is there such a divergence in price? 

 

What is the rationale behind cutting the cost of something that was double the price last week?

The short answer is: consumer demand. While the story is subtly different for soft drinks compared to alcoholic drinks, consumers expect to periodically pay less for their favourite brands, which becomes a major factor in what orders your customers place. Since there are fewer opportunities to grow outside of the existing business – despite the fact many drinks businesses have diversified, price is still a factor in leveraging competition and driving results in drinks sales. As a result, opportunistic pricing strategies thrive in the drinks industry.

Tracking Supply & Demand (And Products, Too)

Price elasticity is a common feature of the drinks industry. This stems from the fact that, when prices rise, people tend to consume less of a product. Price cuts are a cunning way of maintaining market equilibrium while costs of production, distribution and marketing all remain the same. Sell cheaper, sell more, or vice versa.

This is good news for the consumer and the producer, who are getting what they want and protecting their bottom line, respectively , but it can complicate things for key operators on the supply chain. Distribution, ensuring all consumers have a piece of the pie proportional to their need, is a costly business.

Since the beverage wholesale distributor must manage the logistics of having the right amount of stock in the right place at the right time, pricing and promotions have the potential to cause a serious headache. A good distribution infrastructure gives your company a greater chance of outselling its competitors, so careful planning is a must.

Why Is Beverage Distribution Software, A Solution To Pricing & Promotion Complexities?

Many companies in the drinks industry are working with software systems that aren’t malleable enough to deal with the frequent – often weekly – changes in pricing and promotions.

Making changes to legacy software can be a time-consuming, laborious process. Often, by the time the first change you requested is complete, things have changed again. A software system that can be updated and that accommodates change in a fluctuating business environment is the main benefit of an industry-specific ERP. Some Irish and UK drinks companies are surprised to learn that there is an ERP better suited to their micro-vertical than their current legacy software, while others are already reaping the benefits of i switching their beverage distribution software.

With a huge variety of price lists allocated to different customers, and taking into account fluctuating prices, wholesale distribution software must have high functionality and supercharged efficiency.  Ever-changing pricing and promotions define the drinks and beverages sector, and it stands to reason that a fit-for-purpose ERP system is a non-negotiable requirement for your drinks distribution business.

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