Pricing Analytics

January 8, 2011 Leave a comment

What is Pricing Analytics?

Pricing Analytics helps organizations in fine-tuning the selling price of products in order to obtain incremental units sales, revenues or margins depending on the situation.

Why is Pricing decision making important?

The right pricing decision help organizations earn more with no incremental costs. Pricing Analysts take help of the supply-demand dynamics in the industry to arrive at a pricing strategy that drives growth. Companies lose out on a lot of money because a product may not be priced optimally.

How do pricing analysts help in decision making?

Pricing analysts look at historical sales data and build causal models relating unit sales to prices, promotions, competitor strategies, sales seasonality and marketing spends. They compute price elasticities with such models and leverage this information to help drive pricing decisions.

What tools do pricing analysts use?

A lot of statistical tools such as linear regression help in the computations. Data is collected and cleaned using technical tools such as SAS, SQL etc. Optimization engines are also available in the market for optimization related analysis, the excel solver being the simplest one. It is freely available.

In what industries is pricing analytics employed?

The industries using these techniques include retail, travel, fashion apparel and hospitality. It is mostly widely used in the retail industry where there is no dearth of transactional data. The major players in this industry have rich data which can be analyzed extensively to reveal patterns.

I am an analyst requiring consultation on a pricing analysis? Where do I go for help?

Please mail your queries to biznessanalyst@gmail.com. I will get back to you with the answers.

Advertisements
Categories: Market Mix Modeling