Research Objective

• The client had limited information about consumer price responsiveness and the extent of competitor price fluctuations. They needed to predict:
  • Gain/loss in volume share based on price movements in the category.
  • Optimized prices to achieve targeted volume share in the event of competitor price actions.

Scope & Methodology

• The project included building a predictive model to understand interactions among client’s and competitors’ price elasticity. It identified price gaps/thresholds which could result in significant share changes.
• Further, we created a simulator to help identify optimum price bands to operate in given the competitors’ price changes.

Value Delivered

• We proactively identified the maximum price threshold to respond to a List Price Increase
• The tool was extensively used to identify best price strategies in the dynamically changing market.
• The client was able to maintain an optimum price differential against fluctuating competitor pricing.

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