Business Challenge
This global nutrition company dedicated to delivering better nutrition, wanted to understand price elasticities across its core channels and accounts. They also wanted insights to determine the most appropriate pricing strategy and whether they should follow their competitors’ pricing strategies or not.
Solution
We developed a pricing simulator to determine the volume and value impact for price increases for different Promoted Price Groups (PPGs).
- Provided insights on price sensitivity across different retailers, offline and online. Also analyzed price interaction between online and offline stores.
- Delivered analysis on the impact of in-store promotions and quality merchandizing support.
- Provided insights on the impact of competitor pricing on sales and recommendations on following competitor pricing strategies.
Impact
- Optimized Promotions:Enabled optimizing promotions to maximize ROI across brands, customers, channels & geographies. Analysis indicated volume loss from price increases could be mitigated by in-store promotional strategies.
- 2X Impact on Online vs. Offline: Found price changes had 2X impact on online. This and other insights provided flexibility to refine pricing for each type of retailer & channel.
- 5% Price Increase = ~6% Volume Drop Driven Mostly by Online:Sample finding from pricing simulator that was built to play out various pricing and promotion scenarios. Such insights helped optimize pricing strategies.
