Business Challenge
A major manufacturing firm operating in a niche B2B market wanted to improve sales margins without impacting market share through its pricing strategy.
Solution
AIDAS partnered with the client and deployed AI/ML accelerators to develop insights on Margins. Insights developed led to identifying customer and product segments where differential pricing strategies could be implemented without impacting market share.
The AIDAS team developed a clustering model from the transactional data to understand customer purchase patterns. Less profitable cohorts were selected to test price influencers further.
The team applied different statistical techniques to identify the impact of purchase parameters like volume discounts, basket buy and contract terms over the selling price. Testing of multiple hypothesis resulted in identification of potential opportunities to improve margins across customer and product segments.
Finally, a price elasticity model was developed to select products that could create more impact and it is super imposed with customer segments to identify potential targets for improving margins.
Impact
Opportunities identified with actionable insights in the initial phase could result in a measurable increase in overall margins.
** The client has chosen AIDAS Analytics Office (subscription-based pay-as-you-go) services to run business analytics projects.
