Promotional pricing policy review in South America

The Challenge

One of our South American airlines was experiencing a decrease in sales of its fresh sandwiches after a cost increase from a supplier forced a rise in the onboard retail price to maintain the product margin.

Our Approach

The objective was to increase the passenger spend per transaction thus driving overall cash margin. We reduced the price of the “meal deal” by 500CLP, the meal deal included a sandwich, drink, and snack. This meant that the customer effectively got 3 items for the price of 2.

Our strategy of looking to drive sales across several product groups enabled us not only to negate a supplier cost price increase but to actually increase the profitability of the retail programme.

The Outcome

Increased SPH by 4%

We increased SPH by 4%. In profitability terms the Margin Per Head(MPH) saw an increase of 2.5% due to this activity.

Tags: Case Studies

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