2. THE RULE OF ALL RULES:
“PRICING IS HIGHLY REWARDING”
Jan’00/Jun’11 analysis by
+ 90% (2000 – 2011)
+50% (2008 – 2011)
S&P 500 vs Pricing Virtuosos Weighted Index
Source: Compustat, F500 & S&P 500
3.
4.
5. Pluralitas non est ponenda sine
necessitate
Plurality must never be posited
without necessity
William of Ockham
11. Transactional Data
Customer Data
Product Data
Transactional Must Have Data
• Invoice Number/ Lines – Unique
identification Number
• Time (Year, month, day, time, etc.)
• Volume (Quantity)
• Price
• Levers
Customer Must Have Data
• Customer number - Unique number
for each Customer
• Customer Name
• Segments (transactional)
• Geography (Country, Region, City, etc.)
• Related KPIs
Product Must Have Data
• Product Number - Unique number for
each Product
• Product Name
• Segments (transactional)
• Brand
• Category
Start With Must Have Data…
12. … But do not forget scalability
ERP
Research
Socio-
Market
Data
CRM
+
+
Data from Pricing Optimization:
• Predefined Calibrated Scenarios
• Optimal SO & Net Price points
• Competitive & Market Disruption
Intelligence
Transactional Pricing Analytics
Data from Value-Based Analytics:
• Behavioral Segmentation
• Value Perception / Utilities
• Premium/ Elasticity / Market Response
26. Scenarios:
Relate an optimal value at a certain stage
with dependent actions to be taken
Optimal
Condition 2
Optimal
Cost of Sales
Decided Sell-Out
Optimal
Condition 1
Optimal
Net Price
COGS
Gross Margin
31. Learn how to track & document disruptions:
Variance analysis is at the heart of Pricing
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-250
-125
0
125
250
375
500
625
750
875
1000
Consolidated Crop Commodity Price Index ($/ton) BR Price variance without Gly (%)
SYN Price variance without BR and Gly (%)
t
Price Commodity Index
Price Variance BU 1
Price Variance BU 2
32. Learn about your own Pricing Power:
Relate Environmental disruptions to predefined scenarios
Pricing Power is a copyrighted tool from
33. Learn how to Track Performance:
Pricing Dashboards as a key element of change
ProfitabilityVolume
Gross Profit Margin
Net Profit
Margin
YTD Profit
Gross Profit Margin
Net Profit
Margin
$
Sales
Variance
Gross Sales
Variance
Net Sales Variance
Price
Variance
Gross Price
Variance
Net Price Variance
Pocket
Margin
Variance
Other
MS
Mix
Variance
SoW
Sales Effectiveness
Premium
Price
Volume
Elasticity
Efficiency
ROI
Pricing
Power
Brand Equity
Competitiveness
Pricing
Leadership
Relative COGS