Our client's business outcomes

+2-3 points of margin
Increased customer trust in prices
More efficient discount management
How, in a few weeks, did BearingPoint help a client reposition prices of hundreds of products?
The challenge

How, in a few weeks, did BearingPoint help a client reposition prices of hundreds of products?

In a context of generalized inflation of raw material costs, our client, a French agri-food industrialist, needed to overhaul its prices to secure or even improve its profit margins. After reworking its sales & pricing policy framework, the company asked for our help to recalculate price lists to ensure they are both in line with the market and profitable. With the accumulation of blanket price list increases, most of the time only covering cost increases from suppliers, our client's price lists have gradually fallen out of step with the market. Customers and sales teams have lost confidence in the price lists, which has led to a proliferation of discounts, sometimes at inappropriate levels. As a result, this has led to additional price list increases in an attempt to compensate for the increased discounts, thus fueling a vicious circle.

A first rapid calculation of the complete price list using Optix, followed by a refinement with our client
How we helped

A first rapid calculation of the complete price list using Optix, followed by a refinement with our client

After identifying the right analysis periods considering business activity cycles, and collecting and cleaning price data, we calculated the first sets of prices using Optix Software – Price List Management. Optix's flexibility allowed us to calculate the most suitable prices given the framework set by the client for its new pricing policy very quickly. Then, iteratively, to propose optimizations, as we conducted overall price consistency reviews with the client’s pricing, product marketing and sales teams. The first challenge was to objectively identify which products amongst the catalogue were the most sensitive for both our client and its end customers. To do this, we combined a field information collection approach via the sales teams with a multi-criteria analysis of the sales history. Once the product selection was made, we aligned with our client on a suitable price calculation method before validating each price individually with its teams.

Challenge of the framework: estimation of margin and price impacts, by customer and by sales representative, for clear decision-making
The results

Challenge of the framework: estimation of margin and price impacts, by customer and by sales representative, for clear decision-making

After each price list calculation, we estimated the impacts on margins according to different scenarios, which were either conservative or ambitious regarding the evolution of the sales teams’ discount practices. Optix's impact module allows for an iterative way of working with the possibility of adjusting specific prices before updating the simulations. We also developed for the occasion a specific algorithm for analyzing coverage rates per product to optimize discount funnel sizes and minimize risks. Our deliverables – price lists, lists of the most sensitive items, impact scenarios - allowed our client to quickly validate and deploy its new pricing policy, resulting in substantial gains of several million euros.

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