The client: Consumer goods company
Area of engagement: Pricing analytics
The global consumer goods industry consists of firms trading goods that are intended for everyday private consumption. The companies in this industry have an extensive product portfolio, including food and non-food categories to meet consumers’ demands. The consumer goods sector also acts as a foundation for the modern consumer economy as it not only generates a massive portion of the gross domestic profits for countries across the globe but also drives immense amounts of money into other businesses like advertising and retail.
Over the past decade, the consumer goods industry has started developing innovative products and services to meet the ever-increasing needs and wants of the customer across the globe. Additionally, firms within the consumer goods industry have rapidly expanded into the potential consumer markets across the globe and aggressively built global scales across the value chain to make themselves profitable.
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However, there are a few critical factors that are expected to influence the growth of the consumer goods industry in the coming years. These factors include:
- Decreasing Operating Margins: As companies in the consumer goods industry space are facing pressures to ensure the distribution of high-quality products while focusing on innovative ways to cut costs, they must take into consideration the instabilities in the pricing of oils and their effect on transportation costs.
- Varying Consumer Demands: Companies within the consumer goods space need to be dynamic and consumer-focused as the demand from the consumers is changing rapidly. This is because consumer preferences have significantly transformed and moved towards sustainable and healthier options. Additionally, the success rates of these firms depend on how they cater to the fluctuating needs and wants of the consumers in a cost-effective way.
Such factors are compelling firms in the consumer goods space to leverage the use of pricing analytics solutions. Pricing analytics solutions help businesses on setting pre-determined prices for the products and services based on market conditions and target margins. These solutions also assist companies in gaining a clear understanding of the internal and external factors affecting the profitability of the sector from a granular level.
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The Business Challenge
New business models are coming to the fore, paving the way for a few fundamental changes to the global consumer goods industry.
The client, a leading consumer goods firm with business operations spread across the globe, wanted to identify potential ways to estimate the price-change triggers based on customer behavior. The client also wanted to seek ways to determine the impact of pricing on the market volume and share. Moreover, the primary concern of the client was to evaluate the effect of pricing on market fluctuations and identify robust ways to enhance their ROI.
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The Solution and the Business Impact
With the help of the Quantzig’s pricing analytics solution, the consumer goods industry client was able to leverage predictive modeling to manage prices and promotions. The client was also able to compare the prices of the products and services with that of the competitors and utilize analytics to get the pricing right. Furthermore, this pricing analytics engagement helped the client increase focus on realigning their marketing mix to boost their overall profitability.
Pricing Analytics Solution Predictive Insights
The pricing analytics solution offered by Quantzig helps firms builds strong pricing capabilities to achieve a positive impact on the bottom line. Additionally, these solutions help companies identify ways to robustly position products against the competition and analyze profitability across niche target segments. This would help them achieve better returns on their marketing investments.