Pricing and Profitability Management: A Practical Guide for Business Leaders by Julie Meehan & Mike Simonetto & Larry Montan & Chris Goodin

Author:Julie Meehan & Mike Simonetto & Larry Montan & Chris Goodin
Language: eng
Format: mobi
Publisher: Wiley
Published: 2011-06-16T14:00:00+00:00

Price Bands

Another common transactional analytic is the price band. This variant of the scatter plot shows the distribution of prices among a number of categories, segments, or attributes. For instance, a consumer packaged goods company may choose to plot the spread of prices for a food product by package size. The price per unit would be expected to be lower for the 32-ounce can than for the 15.5- or 6-ounce cans. This hypothesis can be tested by comparing the sales prices for each package size. The results may be surprising. In the price band shown in Figure 5.9, oval A represents fix-or-flush customers—those who should either have their prices increased or be eliminated altogether. Oval B represents grow-and-own customers. These customers and their transactions can be targeted for increased selling efforts. As always with transactional analytics, improvement efforts should be focused on best and worst performers.

Figure 5.9 Price-Band Analysis

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