Tag Archives: pricing analytics

Pricing Analytics: With a surge in data availability, there are several companies that have taken a shot at solving business problems using data analytics. Ironically, they still call it data sciences vs. what we at Convergytics believe that it should be called business sciences. The difference is very philosophical. In data sciences, data is supposed to guide business decisions whereas in business sciences, based on the business requirements, business domain and industry, data is treated & analyzed to address business questions in a way that fits into the existing processes and can be measured. Amongst all the “Ps” of marketing, Pricing is one of the most powerful levers for improving profitability.

Research shows that price management initiatives can increase a company’s margins by 4 to 7 percent in 12 months—yielding an ROI between 200 and 350 percent. Lot of organizations fail in implementing the pricing framework as they don’t have the appropriate level of appreciation for the true market structure and competitive environment or Cross Price Elasticity. Convergytics has a unique framework for Price optimization that uses economic theories like Lancastrian theory and Random Utility theory, backed by statistical methods to identify optimal pricing strategy.

Our approach is flexible to roll up the pricing from the lowest level of granularity (i.e. SKU level) to the company / brand portfolio level. While optimizing the prices, the framework solves for the following:

a. Value of the brand name and the premium associated with it

b. Competitive pricing and impact on own brand demand

c. Cross price elasticity d. Seasonal/ Regional demand fluctuations

e. Marketing support for brand building

f. Merchandizing offers etc.

g. Pricing strategy (skimming vs. penetration vs. value pricing)

Convergytics has extensive experience in solving pricing problems across industries especially in CPG, Retail, Telecom and Pharma OTC. Convergytics is a boutique analytics consulting company set up in early 2012 with offices in Bangalore and Seattle. Some of their premier clients include a leading media agency, a boutique CRM management company, a premier departmental store retailer, a fortune200 wireless and mobile telecom service provider and a leading travel aggregator.


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