A leading brewery wanted to understand how price change impacted its products to develop a pricing strategy across SKUs and maximize the top line. The pricing team faced the uphill task of designing a unified pricing strategy across 200+ SKUs manufactured worldwide, without causing a negative impact on product sales.
TheMathCompany utilized conjoint analysis survey and discrete choice modeling to determine optimal pricing and distribution of SKUs across geographies.
- A conjoint survey was designed & rolled out to sample shoppers, who were presented with different price points on SKUs across the category.
- Discrete Choice Modeling was used to simulate customer choice and understand the impact of price changes; a VR platform was leveraged to simulate real experiences, in the context of advertising, pricing, packaging, features, promotion, and other variables to derive the importance of each marketing variable
- Impact assessment was carried out to understand effects of price increase on SKU volumes, movement of volumes to other SKUs in the market. Optimal price & distribution architecture was developed across SKUs to maximize the volume / marginal contribution
- Design thinking frameworks helped to create outcomes and roadmap (packaging preferences, price sensitivity etc.) for devising a holistic pricing strategy
- A simulation tool was built to enable decision-makers to visualize the impact and answer various questions on pricing
- Unconventional data sources were explored to capture information for economic, demographic indicators (IMF, Worldbank, Survey reports etc.) to forecast volume outlook for countries. A delivery process was setup to scale the solution across 25+ countries with minimal effort duplication
- Computed pricing for 2500+ product-location combinations
- Discovered 16% opportunity cases for price optimization and a potential improvement of $250M in revenue