Brand Pricing Strategy

Challenges

1. Companies use heuristic rule-based pricing strategy which was ineffective for multiple product categories and a wide range of campaigns

2. Such systems are unable to effectively capture long term impact and ROI of promotions

3. Many faces inefficiency in utilizing multiple data sources and handling big data flowing at a higher frequency

Solution

1. To efficiently absorb the impact of price change, we perform price elasticity analysis across markets by performing various AB Scenario, checking on Historical trends, leveraging ML models to predict the impact,understanding consumer awareness via surveys.

2. By using the methods listed above, the following analysis should be done:

   • Impact on brands volume and market share gives visibility if the volume and market share is likely to go down or now.

   • Here the impact can be analysed using machine learning by leveraging historical data. AB testings can also be performed.

   • where we increase price in some markets and compare with similar markets where we keep the price same.

   • Impact on Volume and MS% , if competition also takes up a price increase to maintain the price gap.

   • Volume shifts within brands - For ex. if we increase price of a brand then consumer could shift to other brand of same category/ Segment.

   • Volume shifts between segments - Consumer might move from whiskey to beer segments or vice versa.

   • Market share and volume forecasting (Short term Vs Long term) - Market share in short term could be going down but in the long term,it could outrun some brands and show positive growth.

   • Best pricing scenario should be created and analysed to improve overall company's PNL.

3. Built a simulator to tell impact on margins and market share on various range of Prices.

Business Impact

1. Automated models to assess the impact on Market share and margins upon change in price of brand.

2. Better revenue growth planning assisted by model.

3. More time spent on decision making than manually assessing the impact.

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