Influence of commodity costs on the price of FMCG products

The goal of this thesis is to provide a reader with a comprehensive outlook on the cost-pricing process in a real FMCG company. Firstly, the thesis concentrates on the theoretical background of cost methodologies and pricing strategies from a perspective of a private firm. Secondly, the thesis presents a tool, which calculates the reflection of the change in the commodity cost on the shelf price of a good. Thirdly, statistical testing is applied in order to identify if the model could correlate with reality based on historical data. In this part the thesis discusses the limitations of the model and gives more real life examples of how the price is set, besides the commodity influence. Thanks to it, a reader will be able to draw conclusions from the given information and deeper understand the complexity of the FMCG market industry.The goal of this thesis is to provide a reader with a comprehensive outlook on the cost-pricing process in a real FMCG company. Firstly, the thesis concentrates on the theoretical background of cost methodologies and pricing strategies from a perspective of a private firm. Secondly, the thesis presents a tool, which calculates the reflection of the change in the commodity cost on the shelf price of a good. Thirdly, statistical testing is applied in order to identify if the model could correlate with reality based on historical data. In this part the thesis discusses the limitations of the model and gives more real life examples of how the price is set, besides the commodity influence. Thanks to it, a reader will be able to draw conclusions from the given information and deeper understand the complexity of the FMCG market industry