A Leading Brewery Discovered $250M Worth Revenue Boost Opportunity Through Price Optimization Tool

A leading brewery wanted to understand how price change impacted its products to develop a pricing strategy across SKUs and maximize the top line. The pricing team faced the uphill task of designing a unified pricing strategy across 200+ SKUs manufactured worldwide, without causing a negative impact on product sales.

TheMathCompany utilized conjoint analysis survey and discrete choice modeling to determine optimal pricing and distribution of SKUs across geographies.

A major challenge faced by the client was with regard to designing a holistic pricing strategy across SKUs. Identifying and analysing how their products responded to price changes enabled maximization of the company’s top line.

Initial surveying: A conjoint survey was designed & rolled out to sample shoppers, who were presented with different price points on SKUs across the category.

Setting up a VR platform: Discrete Choice Modeling was used to simulate customer choice and understand the impact of price changes; a VR platform was leveraged to simulate real experiences, in the context of advertising, pricing, packaging, features, promotion, and other variables to derive the importance of each marketing variable.

Understanding effects of price on SKUs: Impact assessment was carried out to understand effects of price increase on SKU volumes, movement of volumes to other SKUs in the market. Optimal price & distribution architecture was developed across SKUs to maximize the volume/marginal contribution.

Creating frameworks, tools to resolve the challenges: Design thinking frameworks helped to create outcomes and roadmap (packaging preferences, price sensitivity etc.) for devising a holistic pricing strategy. A simulation tool was built to enable decision-makers to visualize the impact and answer various questions on pricing.

Enabling scaling up of operations: Unconventional data sources were explored to capture information for economic, demographic indicators (IMF, Worldbank, Survey reports etc.) to forecast volume outlook for countries. A delivery process was setup to scale the solution across 25+ countries with minimal effort duplication.