Industries 

Most companies would agree with the old adage, “50% of promotional spending is wasted… but we don’t know which 50%”.  We help our clients utilize statistical modeling to measure the effectiveness of trade promotion allocation at the most granular level, and:

• Identify ineffective promotional programs and trade spend
• Recommend the optimal amount to be dedicated to an initiative or promotional vehicle (i.e. coupons or aisle displays)
• Predict uplift in revenue at a detailed product, market, channel and customer segment level
• Develop what-if tools to simulate tradeoffs in uplift, cost, length of promotion and types of promotion for promotional planning
• Incorporate effects of the multi-tier market structure of end consumers, retailers, wholesalers and manufacturers

The concept of integrating end customer demand with production and supply chain decisions improves coordination, operational efficiencies and total net margins. To truly link all decisions from "procurement to customer purchase" is a complex process that requires a well-formulated plan and a phased approach. We partner with clients to:

• Design the transformational plan to achieve integrated customer demand and supply optimization
• Design and deploy knowledge platform to synchronize decisions across entire supply / demand continuum
• Develop comprehensive change management frameworks to ensure adoption of decision support recommendations and consistent execution across functional groups
• Integrate scenario planning capability to evaluate strategic alternatives and diagnose root cause of suboptimal decisions between pricing, promotions, distribution, production, R&D and procurement

For the vast majority of companies, predicting how customers will respond to price points, discounts, promotions or incentives is educated guesswork.  By conducting statistical analysis at a granular level, market response models can be developed for predicting customers’ price responsiveness.  Our analytical approach leverages historic proprietary sales data, product data, competitive data, customer data and other available data sources to:

• Predict how customers will respond to various price points and discount levels, and identify ways to incorporate these models into decision processes
• Leverage market response models to identify product level opportunities for price increases or tactical price reductions to stimulate demand
• Incorporate competitive prices and potential competitive price changes into the market response model
• Account for cross-product effects, including private label, substitutable and complementary products

Many companies experience significant revenue leakage due to decentralized pricing processes, complex discounts and terms and a significant cost-to-serve.  Capturing this lost revenue has a large impact on the bottom line.  We collaborate with clients to:

• Identify and recommend ways to control key revenue leakage elements throughout the multi-tier market structure (plant, distributor, retailer, consumer, etc.)
• Rebates, unearned discounts, extended payment terms, late payments, etc.
• Conduct detailed pocket price analysis leading to profitability segmentation by customer, size or sales segment
• Create a price band analysis to quantify the variability of transaction prices and identify the underlying drivers

In our experience working in the consumer goods industry, we have found that the best pricing strategies are well-defined, communicated throughout the organization and actionable. Developing the right pricing strategy requires combining strategic objectives with granular data analysis.  We partner with clients to:

• Educate stakeholders about potential pricing strategies that fit their current operating model and strategic objectives
• Perform detailed analysis to determine value proposition vis a vis competition at a customer segment level
• Compare value proposition analysis to potential pricing strategies to determine ideal strategy by segment
• Ensure a rational price structure across channels and substitutable or complementary products
• Create a change management plan to communicate pricing strategy throughout the organization

Although traditional segmentation approaches are useful for mass marketing, they often do not help describe customer behavior and consequently are not optimal for pricing decisions. We work with our clients to: 

• Understand strategic, share and profitability objectives and identify key customer attributes, such as location or store type
• Perform clustering, CHAID and regression analysis to identify commonly held traits and behavior patterns among customer groups
• Develop strategies, business processes and methodologies for optimizing pricing, discounting and inventory allocation decisions across customer segments

Leveraging our experience across multiple industries, we help clients create and enhance Pricing and Revenue Management programs that deliver sustainable results. We combine our knowledge with our clients’ insights into their own organization and culture and partner with them to:

• Collaborate with the executive team to determine roles, responsibilities, fit within the current organization and success criteria
• Develop a Pricing and Revenue Management organizational framework
• Design process flows to smoothly integrate new Pricing and Revenue Management group operations with current operations
• Build consensus throughout the organization to determine priorities, identify “Quick Wins” and ensure new Pricing and Revenue Management group acceptance