For manufacturers aiming to achieve a Triple Win and drive revenue, price pack architecture (PPA) is a powerful lever in Revenue Growth Management (RGM). PPA structures product portfolios by strategically designing price points, packaging sizes, and product configurations.
PPA is a practical growth enabler that enables manufacturers to adapt to shifting market dynamics and seize growth opportunities when they arise. It delivers measurable value in two key ways:
1. Driving Core Brand Growth: PPA helps brands expand their brand reach and performance. Whether it’s extending product lines, targeting new shopper occasions, or entering untapped channels, PPA provides manufacturers with the opportunity to grow.
2. Supporting a Sustainable Business Model: PPA supports both immediate sales performance and long-term profitability. The flexibility of PPA allows manufacturers to adapt to dynamic market conditions, ensuring they meet shoppers’ needs while satisfying internal financial goals.
This blog post addresses key questions webinar participants raised during our recent PPA webinar with Jamie Green, Category & Strategic Revenue Management Director at General Mills. The questions include:
Drawing from Jamie’s insights, you’ll learn how General Mills optimizes its RGM strategy with PPA. Whether your organization's needs align or vary, this article provides actionable takeaways to refine your approach to PPA.
What makes PPA particularly complex is its reliance on contributions from multiple functions across the organization in addition to RGM, including marketing, sales, product, and finance. As such, establishing clear accountability is crucial for navigating PPA.
At General Mills, brand development takes ownership of PPA because it directly impacts product innovation and market positioning. Other manufacturers may assign PPA ownership differently, tailoring the structure to their organizational needs.
A well-defined ownership plan ensures that decision-making remains structured and efficient. This can involve, for example, attributing the responsibilities of each RGM lever to individual teams across the organization (as General Mills attributes PPA to the brand team), or creating a centralized RGM team to oversee the optimization of all levers. In any case, RGM teams are crucial in providing foundational inputs needed for informed decision-making.
No matter how your organization structures its accountability for PPA planning and execution, a well-executed PPA strategy doesn’t operate in isolation. RGM teams are involved in its process, acting as both enablers and integrators within the broader organizational ecosystem.
RGM teams provide foundational insights into pricing strategies, market segmentation, and shopper behavior—data that enables informed decision-making. Their analyses reveal market trends, identify opportunities, and ensure that PPA is grounded in an organization’s financial capacity and market realities.
RGM teams also develop their organization’s PPA capacity by facilitating cross-departmental collaboration. For example, General Mills employs the decision-making framework DARE (Deciders, Advisors, Recommenders, and Execution Stakeholders), to clearly define roles—such as who is responsible for data generation, decision-making, and transformation—and reduce inefficiencies.
Additionally, a significant challenge in collaboration lies in balancing local market needs with global scalability. Shopper demands, brand positioning, and operational realities often vary by region. A two-way conversation between local markets business/RGM teams and centralized RGM teams is critical. The local teams can articulate their needs and the centralized team can collect, synthesize, and harmonize data inputs into scalable strategies that maintain brand coherence.
A successful PPA strategy is underpinned by data that informs decisions and validates hypotheses. Typically, manufacturers rely on two key data sources to influence and asses their PPA:
1. Primary Research: Surveys, focus groups, conjoint analysis, etc. provide insights into consumer behavior and preferences, enabling manufacturers to evaluate innovative offerings.
2. Empirical Market Data: For example, point-of-sale (POS) data can be analyzed with advanced modeling tools, such as Buynomics, to allow companies to forecast demand and evaluate the impact of PPA changes on the broader category.
While these data sources are invaluable, they are often complemented by qualitative insights from RGM and category teams. This "conventional wisdom," drawn from market experience, helps interpret the data and refine models for actionable decision-making.
For manufacturers new to PPA or implementing it for only a few products, starting small helps build confidence and a more effective first implementation.
Jamie Green suggests a step-by-step approach to small-scale PPA implementation to help mitigate risks:
1. Insight Gathering: Collect data across retailer, shopper, and category dimensions to understand the current landscape, identify unmet opportunities, and understand shoppers’ willingness to pay (WTP). If budget constraints are a barrier to completing this step, Jamie suggests activating your team for some “low-key, on-the-ground research.” This could include engaging directly with shoppers through informal interactions or observing behaviors in a real-world setting.
2. Ideation: Start with broad ideation through innovation-style workshops, generating a wide range of ideas for potential PPA actions before narrowing the focus to actionable concepts.
3. Validation: Prioritize and refine ideas by evaluating their potential impact and feasibility. Consider factors such as required resources, the size of the opportunity, and scalability across multiple markets.
4. Evaluation: Use RGM software tools like Buynomics to understand your shoppers’ behavior and preferences, cannibalization in your portfolio, and the impact your PPA change will have on unit sales and revenue. That will give you a good basis to understand your operational and financial capacity and scalability beyond initial testing.
5. Execution: Create a robust sell-in story to overcome barriers, such as space constraints or retailer pushback, ensuring smooth market implementation. One option for a strong sell-in story is the Triple Win approach, which helps retailers understand the added value of a new or adjusted product for the entire category.
Once initial PPA initiatives are tested and refined, scaling them requires thoughtful execution. Jamie recommends starting with pilot workshops to educate stakeholders and build excitement. By helping the organization overcome common barriers to change—such as de-mystifying PPA and establishing PPA’s importance—RGM teams can use early insights to develop actionable strategies to scale PPA initiatives while also remaining agile.
To learn more about how your organization can set up its PPA, download our PPA cheat sheet!
Despite its growing importance in RGM to deliver value across manufacturers, retailers, and shoppers—especially in times of high inflation and shifting shopper demands—implementing PPA is not without challenges. Manufacturers must address several challenges to achieve success:
1. Operational Agility: One of the toughest challenges is aligning new PPA ideas with production and financial capabilities. Internal production constraints or reliance on third-party manufacturers can inflate costs and slow time-to-market.
2. Multi-Market Scalability: Scaling a PPA concept across markets and occasions requires navigating diverse shopper needs and market dynamics.
3. Retailer Engagement: Making a PPA change and developing a new product both require a strong sell-in story, developed by manufacturers, to convince their retailers and shoppers that PPA is a viable path over new product development (NPD).
“Lots of people like the innovation, the new and the shiny. But, I think you will often see that PPA is a strong deliverable for the business. It's obviously a tried and tested formulation. So, how do you extend that core strength into more occasions, more people?”
- Jamie Green, Category & SRM Director, General Mills.
Modern, mature companies are swiftly turning their PPA strategies away from traditional methods and instead choosing advanced AI-powered software solutions. Today’s market dynamics can no longer be fully addressed with static frameworks such as the OBPPC. Ideally, forward-looking RGM teams should seek a software that:
1. Integrates and Analyzes Data: They can analyze vast datasets to understand shopper behavior, evaluate elasticity, and simulate market responses while considering all five RGM levers.
2. Predicts Preferences: They can assess shopper preferences toward different product value drivers or price points.
3. Models Holistic Market Dynamics: They go beyond traditional frameworks, like the OBPPC, by analyzing the interplay of shifting shopper preferences and other factors across the entire market, providing insights that more traditional approaches cannot deliver.
4. Justifies Investments: They can provide quantitative validation for your decisions, particularly for high-potential products that warrant deeper research.
Buynomics simplifies the PPA process by providing clear insights into shopper behavior and aligning decisions with the needs of shoppers, manufacturers, and retailers to achieve a Triple Win. In doing so, the tool enables manufacturers to address their challenges and maximize revenue.
The value slope—the balance between shopper perception, willingness to pay (WTP), and internal cost structures—is foundational for establishing a brand’s optimal price-value relationship. This relationship ensures new or adjusted formats are commercially viable and properly positioned within the portfolio while avoiding risks like cannibalization, where larger packs erode sales of smaller ones.
Image from Challenger Brand Group
It is important to understand the nuances of different categories when determining the value slope. Categories with versatile usage occasions, like yogurt, often support broader PPA adjustments. They can sustain larger discounts on bigger packs without impacting purchase frequency, making them ideal for tiered pricing strategies.
While internal cost structures are usually well understood, the real challenge lies in accurately gauging shopper perception and willingness to pay (WTP). Advanced analytics tools, such as Buynomics, can help manufacturers understand the WTP of shoppers and, therefore, products’ value slopes.
As one of the key RGM levers, price pack architecture (PPA) refers to the structuring and design of product portfolios with a specific focus on price points, packaging sizes, and configurations. True optimization in PPA comes from approaching RGM holistically. It also helps to achieve a Triple Win: value generation for manufacturers, retailers, and shoppers.
This article provided answers to participants' questions from our webinar with Jamie Green, in which he discusses how General Mills finds success in its PPA. Whether your organization is on the path to refining its portfolio or starting to explore new opportunities, we hope these insights can help you on your journey. No matter the situation, understanding how PPA changes impact shopper behavior, portfolio performance, category dynamics, and the remaining RGM levers (pricing, promotions, mix, and trade terms) can help you make better decisions.
However, if you want to start making faster, data-driven commercial decisions for all RGM levers holistically with certainty about what your shoppers will do in front of the supermarket shelf, let’s talk!
Get started by scheduling a consultation with our team. We’ll help you explore tools, techniques, and actionable strategies tailored to your RGM needs.