Demand Forecasting to Optimize Profitability
To resolve pricing analysis, previously reliant on costly third-party vendors, a US food manufacturing client established an in-house team for enhanced accuracy and cost-effectiveness
As a food manufacturer, strategic pricing is crucial for sustaining demand, whether during promotions or at regular times. Previously, the client relied on third-party vendors for pricing analysis, which proved costly. Recognizing the need for a more cost-effective and scalable solution, the client established an in-house team capable of conducting accurate and scalable pricing analysis.
The Mu Sigma team conducted an in-depth study of factors impacting product pricing and demand, developing price elasticity models to analyze customer responses, uncovering a strong correlation between socio-economic status and price sensitivity, and identifying diverse reactions to price adjustments among consumer segments.
Our structured approach enabled the client to implement targeted trade promotions, resulting in an 8% revenue increase, improved understanding of sales-influencing factors, and enhanced demand forecast accuracy through product-category level price sensitivity analysis.
Business Impact
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8%
Increase in sales
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More Accurate
Demand Forecasting
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Lower Expenses
Of in-house Pricing Analysis
Mu Sigma is the world's largest pure-play big data analytics and decision sciences company. Through our Art of Problem-Solving, we strive to scale and systematize better decision-making through business intelligence services. Mu Sigma works across the entire decision support ecosystem (data sciences, data engineering, and decision sciences) with Fortune 1000 companies worldwide, including 140+ Fortune 500 companies.
The firm's is derived from the statistical terms "Mu" and "Sigma," which symbolize a
probability distribution's mean and standard deviation, respectively.
