In this business use case, we are looking at how Pricefx can help you implement pricing actions to improve performance. In this use case we will look at how you can easily identify the gaps between expected and projected earnings performance and take necessary actions across an entire product, market, or geographic sector to address them. With Pricefx, you can easily adjust their pricing strategies to bring expected performance back on or above target using simulations on mass price change scenarios.
Use Case Situation Description
User Role:
Pricing Manager/Analyst
Business Objective:
Our business seeks to keep performance at or above the business planned gross margin for the current year. However, changes in business conditions, for example increases in costs from suppliers, transportation constraints and supply and demand imbalance have created a gap between expected and projected earnings performance for the remainder of the year. An immediate need exists to evaluate and implement pricing actions across an entire product, market, and/or geographic sector to bring expected business performance back on or above target for the year.
Complication:
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Targeting price changes at a granular level can be challenging
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Limited time to update data, complete models, review, and react
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Limited visibility into impact on margin and volume due to market cost changes
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Limited visibility into underperformance and recommendation for price improvements
Capability Needed:
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Evaluate options for price changes quickly
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Mass price change simulation including product, customer segment, geography
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Connection to ERP or other system to publish/execute updated price lists and customer contract pricing
Benefit:
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Improved margins due to frequent/smart revisions on price setting vs. forecast planning
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Reduced margin compression with reduction in manual errors and timely pricing updates
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Increased margin with decision support
KPI:
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Margin improvement due to more effective targeting of mass price changes
Calculations:
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Margin improvement = CM2 (new pricing) – CM1 (old pricing)