Mondelez Malaysia announced it will not increase its product prices following the implementation of the GST. “In fact, we will be implementing a 5.7 per cent price cut on our product list to maintain the prices that we give to our retail partners and distributors,” said Mondelez Malaysia managing director Pete Bingeman.
As of 10 April 2015, 39 companies have pledged to absorb the 6% GST and maintain their current product prices, said Hasan Malek, domestic trade minister.
|Milo comes with 100g free volume|
Nestlé (Malaysia) Bhd will pass on tax savings to retailers but added that retailers are the ones that set the final prices for consumers. The company has launched the ‘Lebih Nilai, Lagi Hebat’ (More Goodness, More Value) campaign to keep its products competitively priced in the post-GST environment.
Visual cues are important to demonstrate the value for money proposition. Many brands including Nestle and Mondelez have added extra volume for selected items following the implementation of the GST on 1 April 2015. I have touched on this topic in an earlier posting on instant noodle. Here are other examples.
|Chipsmore offering extra 25% volume|
|Twisties free one pack inside|
|Nescafe free 3 sticks|
|Breeze extra 15% volume|
Even though the prices have increased, at least consumers find comfort knowing very well their favourite product has larger volume at least for now. In a post-GST environment, value for money will become an important theme and FCMG companies can make full use of this by launching smaller pack or family pack to create better value perception.