Price Optimization or F&B in 3 Steps
As a company in the Food and Beverage industry, you know that your product portfolio, types of customers, and regions served change and grow along with you. Blanket pricing doesn’t work, but the more complex your organization becomes, the harder it is to optimize prices according to product type, customer behavior or region.
And if your margins don’t reflect that New Yorkers go crazy over bagels, that plant-based nutrition and local produce are trending, or that tariffs on exports to the UK are now dearer than to Ireland, you’re not optimizing prices.
Optimizing prices is about being able to serve the right price to the right segment, and to do this, you need to understand customer willingness-to-pay. Now, if you think this is exclusively the domain of large corporations, think again. Breakthroughs in artificial intelligence bring powerful, actionable insights to any size of company, making price optimization an accessible reality (and necessity) for you.
To optimize pricing across multiple segments, you need tools that provide:
- clear, consolidated data and easy-to-run simulations
- a variety of pricing models (clustering, regression analysis and custom)
- self-organizing maps that group customers with similar behaviors and calculate their willingness–to–pay by segment or category
- machine-learning driven pricing strategy, segment, volume and margin tests
With the right tools, you can analyze and segment your business, practice insight-based price management, perform data profiling and generate segment-optimized pricing.
And while it sounds like rocket science (it kind of is), with price optimization tools from Pricefx, your part is as easy as 1-2-3:
1. Fast Implementation:
Leverage machine learning and statistical models to quickly import, cleanse and filter your data. Identify segments and define your profiling criteria (customers, products, segments and more). View consolidated data in your CPQ, ERP or other systems.
2. Efficient Execution:
Test segmentation hypotheses, discover optimization and upsell/ cross-sell opportunities and provide optimal prices or price guidance for specific quotes or transactions with results that can be viewed, projected, overridden or constrained by external factors. Calculate willingness-to-pay and price elasticity for segments or categories and cluster even very large buyer behavior data into self-organizing maps.
3. Impeccable Results:
Benefit from machine-optimized segment- and channel-specific pricing seamlessly fed into your CPQ, digital commerce, and ERP systems to enable sophisticated optimized pricing based on products, customers, and segments.
When you can fine-tune your pricing to each product, customer and segment according to customer willingness-to-pay, you’re pricing like a true professional.
If you’re serious about optimizing prices, then your go-to tool should be Pricefx. If you’re not, you’re leaving money on the table.