How Unilever is driving growth opportunities with NRM

FMCG revenue professionals are challenged with creating a win-win-win situation: Provide consumers with the right product at the right price, create value with retail customers in challenging times, all while delivering top and bottom-line growth. And all of this while working within legal limits in countries that prohibit resale price maintenance. 

Leading consumer goods companies like Unilever are increasingly adopting a net revenue management (NRM) approach to tackle this challenge. By applying a structured approach to analytics and encouraging open-mindedness, companies like Unilever are maximizing their net revenue and profits. 

While you may subscribe to this holistic approach in theory, how exactly does an NRM mindset work at the brand level? How can NRM help you adapt to sudden market changes, like rising costs, or when you need to stake your claim in a fiercely competitive category? 

Read on to learn about how two leading Unilever-owned Dutch brands, Unox and Andrélon, took part in a NRM journey. 

At SKIM, we developed an NRM Framework to further break down the product, portfolio and price decisions based on the five-lever approach. By distinguishing between internal levers (e.g. brand, pack, price) and the external ones (e.g. channel, trade term conditions, etc.), we ensure our projects are tailored to help our clients make more holistic pricing decisions. 

Armed with various data sources including market and customer segmentation data, promotional information, and channel preferences for both brands, our team of conjoint experts designed two virtual shelf studies, powered by discrete choice modeling, to determine the impact of potential price and size changes and the optimal portfolio for Unilever. 

At the end of each study, the Unilever team received the SKIM simulator tool, which predicted shopper behaviors across segments and scenarios, and assessed the volume and revenue impact of the price or pack size changes. 

For Andrélon, the level of promo pressure was a key question, and we built a robust pricing model based on propriety SKIM algorithms that also predicted the effect of promotions on consumer behavior. 

NRM and SKIM allowed Unilever to step-up retailer conversations with in-depth and factual insights, such as price elasticity, to focus on the consumer’s wallet. The customer feedback was very positive. 

If you’re curious how to start adopting an NRM mindset:  

• Be courageous and commit to adopting revenue management, starting with adding one more data set to your next pricing decision. 
• Don’t shy away from any initial discomfort or the rigorous process, as it can result in growth. 
• When communicating your findings, make sure to consider the role of emotion, keep it simple, and use evidence for credibility.