Free Webinar
Tackling Rising Costs to Protect Margins in 2025
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How Buynomics approaches cost volatility, pass-through, and portfolio trade-offs using practical heuristics and virtual shopper simulation.
Tackling Rising Costs to Protect Margins in 2025
In this session, Ingo Reinhardt (Co-founder & Managing Director, Buynomics) and Doug Hampshire (Head of Customer Value, Buynomics) walk through what rising input costs actually mean for pricing decisions in 2025 — and why “just pass it through” is rarely a complete answer.
The webinar starts with the fundamentals: why costs matter in profit optimisation, how the right pass-through depends on the demand curve you implicitly assume, and why volatility changes the way teams need to govern price moves. It then moves into the real-world complexity: competitor reactions, portfolio interactions, retailer margins, and consumer affordability. Doug demonstrates how virtual shopper simulation can surface unintuitive but more effective strategies — including scenarios where decreasing prices on some SKUs while increasing others delivers a better profit–revenue outcome than a blanket increase.
Watch the session to explore how leading RGM teams can move from single-product logic to portfolio-level decisioning and how to protect margins while staying aligned with shopper behaviour and retailer realities.
What You'll Learn
- How cost pass-through depends on the demand curve you assume.
Ingo contrasts linear vs. constant-elasticity demand and shows why the “right” price response to the same cost increase can differ materially depending on the curve shape — and why this matters when teams use elasticity-based rules. [14:13] - How inflation and volatility reshape the commercial playbook.
The session links the post-2021 inflation environment to the practical consequences for RGM: more frequent price moves, greater volatility, and the need to revisit promo and PPA structures after large price resets. [09:29] - How competitor moves and category context change optimal pricing decisions.
Even if your own costs increase, demand can shift, competitor prices can rise, and elasticity can change — meaning the correct response is not a single mechanical pass-through rule. [21:02] - How to use portfolio logic instead of single-SKU logic when costs rise.
Ingo outlines why portfolio interactions typically allow more flexibility than a single-product case, because some volume stays within the portfolio when relative prices shift. [23:18] - How simulation reveals better profit–revenue trade-offs than blanket price moves.
Doug demonstrates how exploring hundreds of scenarios can identify options that improve profit while protecting manufacturer revenue — outperforming a simple across-the-board increase. [30:54] - How PPA and promotions become critical levers when price decreases are hard.
For categories or organisations where list price reductions are uncommon, the session explains why increased promotional depth/frequency and pack-size moves often become the practical alternative toolkit. [25:18]
Meet the Speakers
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Ingo ReinhardtCo-founder and Managing Director at Buynomics |
Before Buynomics, Ingo was a Senior Director with Simon-Kucher & Partners, a global leader in pricing. He holds a Ph.D. in Management from the University of Cologne and Master's degrees in Management and Mathematics. Ingo was a PostDoc at the University of Oxford and published in the Strategic Management Journal.
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Doug HampshireHead of Customer Value at Buynomics |
Doug leads Customer Value at Buynomics, supporting clients in using AI-driven decision tools to improve RGM performance. Prior to Buynomics, he worked across multiple roles at Deloitte, including strategy and operations leadership and management consulting, delivering projects across public sector, retail, and supply chain domains. He has worked internationally across the UK, India, and Africa.
Session Highlights
Why “costs matter” is easy in theory — and difficult in real categories [04:13]
Ingo sets up the core tension: simple microeconomic logic is useful, but real-world interactions quickly add complexity.
How the inflation environment changed pricing cadence and commercial focus [09:29]
A practical look at how teams shifted from annual price moves to more frequent changes — and why the agenda later broadened into promo and PPA.
Commodity volatility as a pricing problem, not just a procurement problem [12:42]
Examples of sharp commodity swings and why volatility tends to persist, forcing repeated decisions under uncertainty.
Linear vs. constant-elasticity demand: why pass-through rules can disagree [14:13]
The same cost increase can imply very different “optimal” price changes depending on the demand assumption.
Poll insight: what teams rely on most when adjusting to rising costs [19:08]
Participants highlight cost pass-through and portfolio profitability as primary strategies, with promo and pack-size adjustments rising in relevance. [19:08]
Why “only costs changed” is the wrong mental model in inflationary markets [21:02]
Demand, competitor actions, wages, and affordability move simultaneously — shifting elasticity and the feasible price window.
Doug’s demo: the danger of blanket price moves — and the value of scenario exploration [28:12]
A walkthrough showing how a 10% blanket increase may raise profit but unnecessarily sacrifice manufacturer revenue.
Decision guide optimisation: finding a superior profit–revenue outcome [30:54]
Simulation reveals a scenario that increases profit while improving manufacturer revenue, even when it requires lowering prices on some SKUs. [32:07]
PPA as an additional margin lever when price moves are constrained [34:41]
An example showing how pack-size changes can deliver a higher profit outcome than price alone in certain setups.
Q&A
What are best practices for adjusting pack sizes without damaging shopper trust and portfolio logic?
Doug explains that “little and often” tends to perform poorly with consumers and creates operational burden. One-off changes, executed with a coherent portfolio value slope, typically work better — protecting value tiers (e.g., keeping value packs meaningfully “value”) while reducing disruption. [40:47]
When “smart pricing” changes relative prices, how long does a PPA structure remain relevant — and what triggers a redesign?
Doug notes that PPA is fundamentally about pack/size value perception: shelf price vs. price per unit (g/kg/litre). In simulation, you can adjust size, price, or both and test behaviour. Triggers to revisit PPA typically come from shifts in shopper value perception, competitive pack moves, or when the portfolio’s value ladder stops making sense after inflation resets. [42:42]
How much data is needed to run large scenario sets like the decision guide?
Doug shares that the typical training baseline is around three years of historical sales data at a product-week level to capture behaviour patterns and enable robust scenario simulation. [44:39]
Do you need highly precise product elasticities to run complex scenarios?
No — the approach is not dependent on a single “table of elasticities.” Elasticities are implied from simulated shopper choices and will vary by situation (seasonality, competitor changes, portfolio changes). The model predicts unit sales first, then derives elasticities for the specific scenario. [45:01]
How should teams think about cost decreases in industries where list price reductions are rare?
Ingo explains that while textbook optimisation can imply downward price moves when costs fall, many categories avoid list price decreases. In practice, teams often use promotions or PPA adjustments as alternative levers to reflect improved cost positions without resetting list prices. [25:18]