CASE STUDY

Quantzig’s Pricing Analytics Helps a Renowned Client in the Beverage Industry Compare their Pricing Trends

Jan 18, 2018

The client: global beverage producer

Area of engagement: Pricing analytics

The global beverage industry is witnessing a radical shift toward a more customer-centric environment with the rapidly changing consumption habits of the consumers. The growing urbanization coupled with the rising disposable income is expected to fuel the growth of the industry. The beverage industry comprises alcoholic and non-alcoholic drinks with the majority of the shares contributed by the APAC region. Apart from the growing demand among the customer segments, additional factors such as the growing acceptance of alcohol by customers, population base of the young generation, and increasing per capita incomes can further contribute to the growth of the beverage industry. Although the beverage industry is witnessing considerable growth, owing to the gradual increase in the number of leading-edge players, several factors may influence the growth of the industry.

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Growing health-conscious population: In the recent years, the growing concern for health and wellness is compelling consumers to switch to nutritional choices such as fruit juices to remain healthy. The shift toward the more health-conscious environment is forcing prominent organizations in the beverage industry to bring innovations in their product offerings to meet the fluctuating consumer demands.

Rising competition: With the intense competition taking place in the beverage industry, many leading players are offering a distinguished set of products. To remain competitive and stay relevant in the marketplace, leading organizations should offer products based on the tastes and preferences of the customers. Moreover, government regulations are also forcing organizations to comply with certain norms set by the government before offering their products to the target audience.

To address these challenges and position their products efficiently in the beverage sector, organizations are utilizing the need for a pricing analytics solution. Pricing analytics helps businesses gain a clear understanding of the internal and external factors affecting the profitability at the granular level. The pricing analytics solution also focuses on setting pre-determined prices for the products based on market conditions and target margins.

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The Business Challenge

In the US, craft beer is the fastest growing segment in the alcoholic industry which is nearly triple the growth of wine and spirits industry.

The client, a renowned client in the beverage industry, wanted to understand the impact of price differentials on the market share. With the help of a pricing analytics solution, the client wanted to seek ways to estimate the impact of pricing on the market volume. The client further wanted to identify potential ways to estimate the price-change triggers based on customer behavior. The primary concern for the client was to estimate the effect of pricing on the market fluctuations and find relative ways to enhance their returns on investments. The solution also aimed at identifying the potential opportunities and realign their prices to spur the margin levels.

Pricing analytics

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The Solution and the Business Impact

The pricing analytics solution offered by Quantzig helped the client in the beverage industry leverage the use of predictive modeling to manage prices and promotions. The client wanted to implement full-fledged profit optimization tools to optimize pricing and promotion strategies. Moreover, the solution also sought ways for the client to relatively compare the prices of the products with that of the competitors and rely on analytics to get the pricing right. Moreover, the pricing analytics solution also focused on realigning their traditional marketing mix to have a direct impact on profitability.

Pricing Analytics Solution Predictive Insights

The solution offered by Quantzig helped the beverage industry make pricing decisions based on data to understand the market context. The client was able to build strong pricing capabilities to better achieve a positive impact on the bottom line. Moreover, the pricing analytics solution also offered a customizable pricing solution to the clients to achieve better returns on their marketing investments. Since price becomes the major concern for the majority of the customers; the pricing analytics solution sought ways to position products properly against the competition and analyze the profitability across niche target segments.

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