Pricing Analytics Engagement Helps an Industrial Parts Manufacturer to Minimize Raw Material Cost and Optimize Product Pricing
Over the years, the effective pricing of products and goods has become a major concern for organizations, especially for key players in the manufacturing industries. Therefore, to sustain themselves in the competitive environment and meet the right target customers, manufacturing industries across the globe have started leveraging price analysis solutions. Price analysis solutions help manufacturing […]READ MORE >>
Over the years, the effective pricing of products and goods has become a major concern for organizations, especially for key players in the manufacturing industries. Therefore, to sustain themselves in the competitive environment and meet the right target customers, manufacturing industries across the globe have started leveraging price analysis solutions. Price analysis solutions help manufacturing industries assess customer behavior, preferences, and accordingly set pricing standards. Moreover, the price analysis solutions help manufacturing industries estimate the impact of pricing on sales volume and comprehend the price differentials across markets.
Quantzig’s price analysis solutions assist clients in the manufacturing industries to predict the position of the products against their competitors. Also, the client can effectively estimate price-change triggers based on customer behavior to maximize profitability and revenue. Furthermore, the price analysis solution offered by Quantzig also helps clients to assess the pricing patterns based on geography.
A leading industrial parts manufacturer sourced its raw materials from multiple locations across the globe to gain cost efficiencies between various geographies. They also wanted to improve process performance, reduce the cost of goods sold, identify unproductive services to gain an edge in their price negotiations and maximize margins by minimizing raw material costs. Moreover, their existing portfolio of engineering products was extremely complex and was purchased in small volumes. As a result, the client faced challenges in getting competitive bids from suppliers as there were very few to cater to such specific raw material requirements.
To cater to the client’s detailed category requirements, Quantzig’s team of price analysis experts built a dashboard and identified the required variables from the supply chain, finance, and marketing data marts. They also analyzed primary and secondary processes to understand the number of features of each product, processing time, and raw material costs. Additionally, the price analysis experts compared and analyzed the cost behavior of various products in terms of process, equipment, overheads, and production volumes using statistical graphs.
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Price Analysis Solution Benefits for Manufacturing Industries
Based on their business requirements, the client collaborated with the Quantzig team to develop a solution to improve marketing strategies, price points, enhance product features, and offer customer feedback. The price analysis solution helped the client identify viable alternate materials based on costs to optimize the pricing and make necessary trade-offs wherever possible. Additionally, the client was able to identify the key cost drivers in the early stages of the product’s lifecycle. This helped in minimizing the total costs by 11% and increase profit margins by 6% for the producer.
Price Analysis Solution Predictive Insights:
- Gain better insight into the cost drivers of products
- Determine optimal price gaps with respect to competitor products
- Identify the impact of discounted prices on the sales
- Leverage the relative price points in the portfolio