$8MM
increase in annual sales.
5%
Increase in market share.
Background
Our client was a multinational Consumer Packaged Goods (CPG) company, selling snacks, baking, and meal products. Our client presents ~$200MM in annual sales, the company distributes its products through major retail channels. Over the years, the company has achieved substantial growth through both organic expansion and strategic acquisitions, with a dedicated focus on enhancing its portfolio in the snacks, baking, and meal solutions sectors. The Iris Pricing Solutions team was initially contacted by the client for advice on how to implement data-driven and dynamic price and promotional guidance tools to achieve their business objectives.
The Challenge
Despite their success, the client faced challenges: while their overall sales were increasing, they were experiencing a decrease in market share. This decline in market share was attributed to the rise of new, competitive brands entering the market. The client recognizes the need to optimize their pricing and promotional strategies to maintain and grow their market position amidst the competition. Recognizing the need for a more sophisticated approach, our client contacted the Iris Pricing Solutions team to implement a data-driven and dynamic pricing and promotional guidance tool.
Building a Solution that Fits
The Iris Pricing Solutions team implemented a three-phase approach.
1. Diagnostics & Data Review
- Gathered historical data and conducted internal interviews with key stakeholders to assess current pricing and promotional strategies.
- A quick win analysis was performed to evaluate products and competitors effectively.
2. Modeling
- Elasticity Modeling at various business levels of the business to help anticipate market reactions to price adjustments by a brand or competitors.
- Measured promotional effectiveness and provided guidance for priority promotion period.
3. Promotional Optimization
- Developed a dashboard for simulated scenario visualization and modification.
The Result?
The pricing and promotion optimization brought an additional $8MM in annual sales. The Iris Pricing Solutions team provided pricing recommendations that provided an increase of 5% in market share. Additionally, the IPS team developed a Pricing and Promotion Optimization tool to analyze market pricing dynamics, efficiently allocate promotion funds, and provide a practical war-gamin simulation tool.
The Pricing Solutions Difference
At Iris Pricing Solutions, we excel in crafting tailored pricing strategies for CPG firms to boost profitability and market standing. Today’s pivotal challenge lies in navigating inflationary impacts while preserving customer loyalty. Balancing necessary price adjustments with consumer sensitivity is crucial amidst fierce market competition.
