A Forrester report points out challenges faced by some business-to-business firms working online.
New pricing solution focuses on value creation and competitive advantage for manufacturers, retailers and restaurants, delivering predictive pricing strategies that optimize revenue and profits
Wilton, Conn., Jan. 10, 2012 – Marketing Management Analytics (MMA), a leader in helping companies plan, execute, forecast and optimize their brand portfolios, marketing, pricing and product innovation investments, today announced the launch of its Pricing Strategy Practice. The new solution is designed to help decision makers in sales, marketing and finance define, implement and track the in-market performance of pricing strategies.
The current economic climate has presented companies with a significant dilemma when it comes to reconciling brand-building and pricing strategy initiatives. The trick is in finely balancing the two in order to drive longer term equity while appealing to the enhanced consumer sensitivities to price; too often, however, long-term equity is sacrificed for more immediate sales needs.
This revolutionary new pricing solution is a combination of MMA’s deep consultative expertise, the application of consumer attitudinal insights, predictive time series-based analytics and industry-leading software.
“The brand building vs. pricing issue presents a real conundrum for senior executives,” said Pat Cummings, CEO of MMA. “It’s generally understood that over-emphasizing price creates a potential risk to long-term brand health and the base of the business. What’s less understood is at what point the depth of discount, frequency of promotion, competitive activity and consumer perceptions negatively impact a consumer’s propensity to buy. Between ever-evolving consumer attitudes, competitive market pressures and a challenging economic environment, many companies feel like the sky is falling and the ground is rising to meet it.”
In today’s business environment, nobody knows how fast or slow consumer attitudes and behaviors will change – or change again. Yet companies can’t afford to make snap judgments on pricing or take too long to react to competitive pricing actions, as either course can be very costly to the bottom-line and brand share growth. By integrating multiple forms of predictive analytics with behavioral data and consumer research, MMA’s new pricing solution will help companies address these challenges and balance the risk vs. reward equation of pricing and brand-building.
“Real-time pricing precision that enables executives to make informed, forward looking and accurate decisions is a must-have capability,” said Todd Gustafson, EVP of Operations and Analytics, who has spent over 25 years helping companies effectively make better pricing decisions. “MMA is focused on embedding pricing analytics into our clients’ business planning processes. Not only do our proprietary methodologies and approaches help companies address more profitable pricing decisions on a continuous, repeatable basis, but they connect the results directly to how consumers are making their purchasing decisions.”
In order to support ongoing value creation, MMA has established both a data management and web-based price planning platform as part of its pricing strategy practice.
MMA’s Pricing Strategy and Analytics help decision makers answer the following business questions:
- What are the optimal base and promoted price points?
- How do pricing actions impact specific consumer segments?
- What are the right pricing levers to drive target consumer growth?
- How can pricing and brand-building activities work together to maximize short and long term growth?
- How do client pricing strategies interact with competitive activities in the marketplace?
- What is the impact of interactions across products (e.g. cross-elasticity, price gap)?
- Where are the price thresholds?
- What is the optimal depth and frequency of promotions?
- How would a change in the pricing strategy impact key performance metrics (traffic, guest count, transactions, sales, profits, etc.)?
“Often clients are laser-focused on driving incremental volume versus looking at the bigger picture,” said Doug Brooks, EVP, MMA. “The reality is that incremental sales generally represent a significantly smaller piece of a company’s total business. Often a share point of base sales can equate to five or more points of incremental volume. We want to create a price-planning foundation that enables companies to make decisions that support holistic short- and long-term business growth.”
MMA is a unit of leading global market research company Ipsos. For more information on MMA, please click here.