six qualities of the best pricing software
DESCRIPTION
Pricing & Customer Value Benchmarking Pricing Toolbox - overview Pricing Toolbox Pricing & Customer Value reporting & Control Pricing & ValueLeakages Management Pricing & Customer ValueInsights, Budgeting & simulation tools Value analysis & measurement Tools Pricing & Customer ValueProcess Performance tools Data Capabilities Transactional Analyses Tool 1: Price Evolutions(Illustrative) Flexible tool integrated in Transactional analysis Tool 2: Dynamic Price Waterfall (Illustrative) Tool 3: Price Dispersion (Illustrative) Price Dispersion Tool Consistency Concept Efficiency Concept Tool 5: Variance Analysis Variance Analysis tool – Impact Summary Variance Analysis tool – flexible analyses Tool 5: Time Series (Illustrative) Flexible tool integrated in Transactional analysis Tool 6: Dynamic evolutions & elasticity (Illustrative) Dynamic Evolution / elasticity Tool Tool 7: Economic Value to Clients (Illustrative) EVC Tool – Synthesis table EVC Tool – Value Waterfall EVC Tool – Value Hierarchy EVC Tool – Stakeholders Value Priorities EVC Tool – Value Lever Logic EVC Tool – Value Lever economic Model Tool 8: Segmented Competitive Value Maps Value Map Tool - Tool 9: CBC / Perception Analysis (Illustrative) Tool 10: Win / Loss Analysis (Illustrative) Win / Loss analysis tool Tool 12: Price Points Analysis (Illustrative) Marketing & Sales Support Tools Tool 13: Portfolio Pricing Dashboard (Illustrative) Tool 14: Peer Pricing (Illustrative) Peer Pricing Tool Tool 15: Portfolio Analysis / Price Structure Mapping (Illustrative) Tool 16: Rating Performance / Value Curves Tool 17: Promotional Performance analysis (Illustrative) Detailed analysis of impact of promotions on volume & bottom line Tool 18: Benchmarking & Competitive Intelligence Pricing Performance Management tools Tool 19: Pricing BSC & Dashboards (Illustrative) Pricing BSC – A key management tool Tool 20: Pricing Diagnostic & Roadmap (Illustrative) Tool 21: Pricing Proccess RACI (Illustrative) Pricing RACI - Overview Pricing RACI – Country/Process detail Tool 22: Pricing Thought Process (Illustrative) Tool 23: Pricing Alignment Tool 24: Industry Pricing Dynamics Assessment (Illustrative) Tool 24: Industry Pricing (Illustrative) Price dynamics assessment Value Sharing analysis & decision support Statistics & simulation tools Tool 25: Pricing Simulator (Illustrative) Pricing Simulator – Single product Pricing Simulator – Competitive dynamics Tool 26: Portfolio Pricing Simulator (Illustrative) Tool 27: Retail Network Pricing Simulator (Illustrative) Network Pricing Simulator – Competitive database Network Pricing Simulator – Modeling (1) Network Pricing Simulator – Decision support Tool 28: D & R Savings model (Illustrative) Tool 29: Segmentation & Clustering For more information : http://privaledge.netTRANSCRIPT
PriValEdge PowerPricer
Pricing Toolbox - overview
• Developed by professionals for professionals … pragmatic & operational
• Functionalities– Data management (Transactional data, CRM, Market research, competitive Intelligence, …)– Sophisticated analytics & modeling – Flexible & intuitive reporting / data visibility– Supports all aspects of pricing & Value management
• Platform & integration – Based On Microsoft’s Power BI Platform– ‘portable’ SQL + Office + Add ons toolbox for rapid implementation– Connectablility to your info sources (ERP / Oracle / Data warehouse..)– Tools can be ‘transported’ to your platform if & when necessary
Page 2
Pricing Toolbox
What it is
•Effective support to Pricing Performance improvement in companies
•An Integrated set of tools that can be adapted to your situation to effectively support all aspect of Pricing
– Data Collection management– Pricing & Value Analysis & insights– Monitoring & reporting– Modeling, simulation & Decision support– Implementation support
•A flexible set of Tools based on SQL & office tools supplemented by statiscal & modeling add-ons to support sophisticated analysis & modeling
Page 3
What it is not
A panacea that will by itself get your company to higher levels of pricing performance … it takes expertise & changing your ways of working
An off the shelf readymade solution to your pricing analytics & management needs… we believe nobody can offer that
A ‘black box’ that will take charge & manage your pricing for you… we believe that your expertise is key to making any pricing tool relevant & effective and that you should stay in charge
Pricing Toolbox - Overview
4
Pricing & Customer Value reporting & Control
5
Marketing & Sales support
Reporting Analysis
Traffi c LightsP& L Reports Objectives vs. Realized
Fin . Reports Corridors Exceptions Mngmt
0,50
1,50
0,50 1,00 1,50
Rel
ati
ve P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
Performance Touring Handling AS
PRODUCT LEVEL PRICING TRAFFIC LIGHTS Price Change
Discount Change
Share Growth
% Rel Share vs Ref. Comp
% Premium vs Ref. Comp
Value Positioning
Win / Loss Indicator
Elasticity Measure GM % Fullfilment Overall
Action Required
BRIDGESTONE 97 13% 0 1 8% 9 13% 1,5 61% 94% 0,60024934 59% Y
BRIDGESTONE POTENZA RE92A AS 115 16% 0 1 8% 7 20% 1,5 60% 85% 0,57732634 58%
215/45R18 BW W BRIDGESTONE POTENZA RE92A AS #E440 107 16% 0 1 8% 7 15% 2,0 54% 85% 0,53853075 54%
BRIDGESTONE TURANZA EL400-02 77 12% 0 1 8% 9 8% 1,9 59% 97% 0,59126945 59%
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E402 73 19% 0 1 8% 7 7% 1,9 59% 92% 0,58842208 58% Y
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E329 82 11% 0 1 8% 7 6% 1,2 41% 86% 0,40759921 40%
P215/45R17 BW W BRIDGESTONE TURANZA EL400-02 #G432 103 8% 0 2 8% 7 8% 0,9 53% 85% 0,53514842 52%
BRIDGESTONE TURANZA EL42 109 8% 0 1 8% 9 7% 1,0 59% 87% 0,60924063 60% X
P235/45R17 BW W BRIDGESTONE TURANZA EL42 #C193 117 5% 0 1 8% 9 4% 1,2 58% 98% 0,59778409 60%
P235/50R18 BW V BRIDGESTONE TURANZA EL42 #E445 123 5% 0 1 8% 7 7% 1,6 45% 101% 0,46415437 46% X
P235/60R18 BW H BRIDGESTONE TURANZA EL42 #C010 82 3% 0 1 8% 7 8% 1,6 59% 84% 0,59362246 58%
P245/45R19 BW V BRIDGESTONE TURANZA EL42 #G447 137 1% 0 1 10% 9 6% 1,1 45% 85% 0,45843948 45%
BRIDGESTONE TURANZA EL42 RFT 95 1% 0 1 8% 9 4% 1,7 42% 99% 0,43203873 43%
205/55R16 BW H BRIDGESTONE TURANZA EL42 RFT #7334 94 1% 0 1 8% 8 2% 1,0 37% 101% 0,36211277 36% Y
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E446 119 2% 0 1 8% 9 3% 1,2 40% 85% 0,38266467 38% Y
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #7335 98 3% 0 1 8% 9 1% 1,6 37% 101% 0,37233824 37%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E330 78 5% 0 0 8% 7 1% 2,3 41% 88% 0,40485926 40%
BRIDGESTONE TURANZA ER30 86 6% 0 0 8% 9 1% 3,3 57% 100% 0,56939127 56%
205/45R16 BW W BRIDGESTONE TURANZA ER30 #7271 105 7% 0 0 8% 7 0% 4,9 55% 99% 0,53339714 54%
225/45R17 BW W BRIDGESTONE TURANZA ER30 #7272 118 10% 0 0 8% 7 0% 6,8 58% 101% 0,59676541 59%
225/50R16 BW W BRIDGESTONE TURANZA ER30 #7270 78 6% 0 0 8% 7 0% 4,9 59% 98% 0,60021896 60% X
245/50R18 BW W BRIDGESTONE TURANZA ER30 #7273 99 9% 0 0 8% 8 0% 4,3 39% 91% 0,39917475 40%
255/50R19 BW W BRIDGESTONE TURANZA ER30 #7275 103 7% 0 0 8% 9 0% 2,7 53% 90% 0,51685851 51% Y
255/55R18 BW W BRIDGESTONE TURANZA ER30 #C195 128 8% 0 0 8% 9 0% 3,5 54% 93% 0,53413606 53%
255/55R18XL BW Y BRIDGESTONE TURANZA ER30 #7269 116 7% 0 0 8% 7 0% 5,0 40% 85% 0,40320361 40%
285/45R19 BW W BRIDGESTONE TURANZA ER30 #7274 75 8% 0 0 8% 7 0% 4,2 46% 85% 0,45598798 46%
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Key Tools Price evolutions Pricing & Value Waterfalls Price dispersion mapping Detailed variance analyses Time series Elasticities / Pricing
dynamics analyses
Reporting tools tools to help monitor, control & manage Pricing & support effective implementation of pricing policies
Pricing & ValueLeakages Management
6
Key Tools Price evolutions Pricing & Value Waterfalls Price dispersion mapping Detailed variance analyses Time series Elasticities / Pricing
dynamics analysesC
Transaction analysis tools to help monitor, control & manage Pricing Performance & identify opportunities for improvement
Pricing & Customer ValueInsights, Budgeting & simulation tools
7
Stats & Simulations
Pricing Simulators Portfolio Simulator Network Simulator
D & R Savings Segm. & Clusters Regressions & stats
0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Key Tools Pricing & Value modeling &
simulation Portfolio simulation Network simulation &
optimization Simulation of impact of
alternative Pricing or D&R Segmrentation & clustering
tools Regression & statiistical
tools
Analytical & simulation tools to help support Strategic Decision making on Pricing & Value Strategies & implementation
Pricing & Customer Value Benchmarking
8
Key Tools Share & competitive
performance monitoring Peer Pricing & Value selling
support Portfolio analyses Analyses of performance on
key Value attributes Campaign effectivenes
measurement & modeling Competitive & Pricing
Intelligence tools
Tools to help support Strategic Marketing & Sales with a value focus & Marketing effectiveness improvements
Value analysis & measurement Tools
9
Value Analysis
EVC / EVIU Value Maps / curves CBC / Perceptions
Win / Loss Elasticities Price Points
Marketing & Sales support
PortFolio Ana.
Comp. Intell
Perceived Value Measurement0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
0
1
2
3
4
5
6
7
8
9
80 85 90 95 100 105 110 115
Product price occurence (in comparable sales situation)
Occurrences
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Key Tools Economic Value Modeling Value Map & Curves Choices Based Conjoint
Modeling & simulation Win / Loss analyses Elasticities nalyses &
simulation Price Points / Psycholgical
Pricing analyses
Tools to help Measure Value Perception & Willingness to pay & elasticities & to use Value as a base for Pricing
Pricing & Customer ValueProcess Performance tools
10
Pricing Process Performance
Pricing BSC Pricing Diagnostic Pricing RACI
Pricing Thought Proc. Pricing Alignment Industry Pricing
Value Analysis
CBC / Perceptions
Price Points
0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
Region 2 1 2 3 4 5 6
Year-Month 1
Division 5
Strategy Map Mission Vision Strategy Measure Follow up Last Year Plan /TargetTrend / Result
Issues Initiative Responsible
Shared Pricing Methodology
Roll out Level2 Meth.
% target staffed trained
Weekly 58 68 65 Pricing Roadshow J W
optimization of promotions
Weighed Impact measure
Monthly 128 124 126 Test Platform PH
Product/Service innovation
% n+1 sales from New product
Monthly 5,9 6,0 6,0 Design to Value J S
Price/volume planning
Weighed Volume prediction error
Monthly -2,3% -2,5% -3,0%Elasticity study AC
rangeAA
Roll out Level 2 Pricing Toolkit
% Sales covered, new entities
Monthly 88% 96% 90% Toolkit Roll out GT
Discipline in conditions
% discount within Std
Weekly 82% 105% 112%
Pricing Corridor out layers (CA & %) Weekly -1,07% -1,2% -1,17%
Value Selling % usage of DTB Monthly 23% 58% 50% DTB Roll out GT
Sell in Sellout measured
% Key Products CA Monthly 46% 86% 80%
Strongest Brand reinforce Brand premium Quarterly 11,4 14,5 14,9Rebranding e
EuropeComm
Best Distrib. Presence
Distributor SoW & coverage
Monthly 36% 40% 35% Partnerhip Program Channels & PH
Price Point Management
%Sales at Price point (keyprods)
Monthly 34% 36% 39%
Targeted Offers % Wins Weekly 38% 35% 35% Sales call Targeting Sales & LL
Consumer ratingsPerceived Value index advantage
Twice a Year 143 129 145
Customer value satisfaction
# price/ value complaints
Weekly 0,99% 0,99% 0,97%
Best of Class Margin
Margin % Annually 50,7% 53,9% 61,1%Portfolio
rebalancingMktg & LL
Target Share 2012 Weighed share Monthly 21,9% 23,7% 26,8%
Growth Sales Growth Monthly 1,5% 8,6% 8,5%
Shareholder returns high
ROE Quarterly 46,5% 52,8% 54,6%
Cust
omer
How our customers see us, rate our performance & respond to it
Fina
ncia
l
Bottom line impact & evolution of financial performance
Roll out level 2 systems, processes & tools
Test & improve lev3 tools in priority units
Develop distributor partnerships
Development of value based offers & features
Maximize growth whilst maintaining current margin levels
Gradually get Level 3 capability, leveraging current best practices
ACME Corporation - Pricing / Value Balanced Scorecard
Lear
ning
Capabilities Development to sustain our ability to change and improve
Proc
ess
business processes Improvement & roll out
North
2008
Access Control
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Tools to help follow monitor, control & gradually improve the strategic Pricing & Value management capabilities of the company
Key Tools Pricing Balanced Score Card Pricing Diagnostics &
Improvement Roadmap Pricing Processes & RACI Pricing Thought Process Pricing Alignment reports Industry Pricing analyses &
decision support
Data Capabilities
Data Capabilities
Security and Data Privacy
Data Storage and Management
Functionality
Data CapabilitiesSecurity and Data Privacy
• Secured environment– All data is stored as necessary in a completely secured environment
• Microsoft Business Intelligence solutions• MS SQL Server 2012 engine• Sharepoint Server 2012, Powerpivot 2013
– Only project related personnel has access to data:• Account Director• Project Manager• IS personnel 100% dedicated to project
• Data Privacy– All Data kept confidential and Private– Completely private space from other ongoing projects
• Server and Database• Internal Network space and resources
Data Capabilities
Security and Data Privacy
Data Storage and Management
Functionality
Data CapabilitiesData Storage and Management
• MS Windows Server and SQL server technology fully adapted to meet customer/account needs:– Large data storage capability
• Able to adapt to any large size database
– Fully managed server environment with daily backups• Data protection and restore services to previous versions
– Adaptable core processing power and internal memory• Server Power adapted to size of database to match processing needs
– Fully dedicated server to customer / account
Data Capabilities
Security and Data Privacy
Data Storage and Management
Functionality
Data CapabilitiesFunctionality
Connectivity and Data Integration
Multiple Platform Support:• Connection to nearly any data
source, from traditional relational sources including like Oracle, SQL Server, Sybase, DB2, Teradata, Access, and any ODBC-compliant platform.
• Connection to non-database sources (including Excel and SharePoint) and non-SQL systems (including Salesforce.com, Business Objects, and Oracle Business Intelligence platforms).
• Run SQL queries against any of these sources.
• Import Export Functionality
Data CapabilitiesFunctionality
Data Automation
• Scheduled Data downloads and Uploads:
Download new data Upload modified data
• Automation of tasks:• Calculations
Applied logics and formulas to data.
• Data checks Data consistency
• Transports Transport to any other linked
system for further analysis.
Data CapabilitiesFunctionality
Sync Validation
Scheduled synchronization:• Compare and synchronize data
between different data sources to ensuring consistency and validity.
• Internal quality process Automated Manual
• Rules validation Automated checks Reporting
Data CapabilitiesFunctionality
Advanced Analytics
• Pre-build functionality for speedy data analysis
SQL queries Server Jobs
• Automated queries to perform cubed based data analysis
Immediately available reporting based on identified needs.
• Mathematical and Statistical functions through SQL services
Capability to add or update records on the go
Data CapabilitiesFunctionality
Data Cleansing
• Identify and correct data inconsistencies:
Format Grouping Relationships Calculations
• Maintain original data on backup database for future queries
• Programmable cleansing procedures to always perform same actions once identified.
• Reports availability for data comparisons
Transactional Analyses
22
Key Tools Price evolutions Pricing & Value Waterfalls Price dispersion mapping Detailed variance analyses Time series Elasticities / Pricing dynamics
analysesC
Transaction analysis tools to help monitor, control & manage Pricing Performance & identify opportunities for improvement
Tool 1: Price Evolutions(Illustrative)
Page 23
SK
U U
nit
Pri
ce
s (
$)
Tme Series (Weeks)
What it is: Analyses Prices (or D&R)
evolutions over time May be used for a single
product or a group of products, globally or by client segments / channel, or by account manager.
What it does: provide visibility and insights
on evolutions to identify trends / changes in dynamics or correlations & opportunities & threats that they represent
Corrective actions it may lead to: Improved / more rational pricing on objectives. Industry pricing actions to influence pricing dynamics Price structure rebalancing
The stakes: Together with other aspect of transactional analyses, typically results in bottom line improvement of up
4 % of sales in the first year
Plant Name (All)Industry Name (All)Custo Rev Segment Name 5_VLProduct Family Code (All)Product Grp Code (All)Prod Rev Segment Name (All)
1,00
2,00
4,00
8,00
16,00
32,00
64,00
nov.-07 juin-08 déc.-08 juil.-09 janv.-10 août-10 févr.-11 sept.-11
Ac1
Ac10
Ac11
Ac12
Ac13
Ac14
Ac15
Ac16
Ac17
Ac18
Pricing
Full ScreenNormal Go to Financial Pivot
Go to Product Pivot
Go to Price Evolution
Go to SKU Elasticity
Go to Product Elasticity
Go to Customer Elasticity
Flexible tool integrated in Transactional analysis
24
Page 25
Tool 2: Dynamic Price Waterfall (Illustrative)
Dynamic Waterfall Analysis
60%
70%
80%
90%
100%
Results 100% 92.7% 14.1%
Leakages 7.3% 0.9% 1.0% 4.6% 1.4% 70.6%
Series1 93% 92% 91% 86% 85%
List Price Price
Concession Invoice Price
Options Warranty $ Financing Prompt
PayMargin/ COGS
Page 25Level 2 Tools
What it is: Detailed analyses of
leakages (by type) that take place between List price & Pocket Margin.
May be used at Product, Client, Segment or Market level
What it does: provide visibility and
control of ‘hidden’ discounts and costs to clarify the contribution margin on a given deal.
Corrective actions it may lead to: Rationalization of discount & client conditions policies. Improved control & exceptions management on Discounts & Client Conditions Sales force support & Monitoring
The stakes: Together with Price dispersion analyses, typically results in 2 to 4 % ROS improvement in first year
26
aa
aaaaaaaaaaaaaa
Fiscal Year (All) A Profile 102,8% 100,0% 0,0% 8,1% 0,9% 0,0% 5,2% 0,0% 7,1% 1,9% 2,0% 76,3% -41,2% 0,0% 0,0% 10,5% 6,5% 4,5% 13,6% Fiscal Year 2009
Fiscal Month (All) B Profile 102,6% 100,0% 0,0% 8,4% 0,9% 0,0% 5,8% 0,0% 7,0% 2,0% 2,0% 75,3% -40,1% 0,0% 0,0% 10,4% 6,4% 4,5% 13,9% Fiscal Month (All)
Region Name (All) A-B 0,2% 0,0% -0,3% 0,0% 0,0% -0,6% 0,0% 0,0% 0,0% 0,0% 1,0% -1,0% 0,0% 0,0% 0,2% 0,1% 0,0% -0,3% Region Name (All)
Acct Mngr Name (All) aa Acct Mngr Name (All)
Customer Name (All) aa Customer Name (All)
Industry Name (All) aa Industry Name (All)
Custo Rev Segment Name (All) aa Custo Rev Segment Name (All)
Material GrP Name (All) aa Material GrP Name (All)
Product Name (All) aa Product Name (All)
Prod Rev Segment Name (All) aa Prod Rev Segment Name (All)
Plant Name (All) aa Plant Name (All)
A Profile Selection B Profile Selection
Theo
retic
al Re
venu
esSa
les G
ross
Reve
nues
Volum
e Disc
ount
Early
Paym
ent
Disco
unt
Full T
ruck
Di
scoun
t
Othe
r Disc
ount
s
Discr
etion
ary
Invoic
ed Sa
les
Total
Reba
tes
Unbil
led Se
rvice
s
Unbil
led
Guarr
antee
s
Net S
ales
Cost
of Go
ods
Sold
Clien
t Tec
hnica
l Co
sts Gros
s Mar
gin
Clien
t Mng
mt
Costs
Clien
t Rec
ruitin
g Co
sts
Othe
r Mktg
Costs
NET N
ET M
ARGI
N
Dynamic Waterfall
0%
20%
40%
60%
80%
100%ADJUSTCOLUM
FULL USUAL
Pricing
Tool 3: Price Dispersion (Illustrative)
Page 27
National
0%
10%
20%
30%
40%
0 50,000 100,000 150,000
Avg
Dis
co
un
t Lack of control & discipline
Large accounts put at risk by unfair treatment
Large discounts given to small accounts/ not taken away from reduced
Standard volume discount
Av
era
ge
dis
co
un
t
Size of account (Yearly revenues €)
What it is: Analysis of discounts given as
a function of size of accounts. May be used for a single
product or a group of products, globally or by client segments / channel, or by account manager.
What it does: provide visibility and control of
actual logic & discipline in the implementation of Client conditions & discounts.
Corrective actions it may lead to: Rationalization of discount & client conditions policies. Improved control & exceptions management on Discounts & Client Conditions Sales force support & Monitoring
The stakes: Together with Price dispersion analyses, typically results in bottom line improvement of up 4 % of sales
in the first year
Price Dispersion Tool
28
Disc. & Reb. Selection AllUnexplained Disc SelectedStdVolume Discount SelectedList to Max Price Disc. Selected Dynamic Dispersion Map - Y: Disc. & Reb. (% Gross Sales) , X: Gross Sales
Early Payment Discount SelectedFull truck Discount SelectedDiscretionary Discount Selected 30
Rebates SelectedUnbilled Services SelectedUnbilled guarrantees Selected 220% 10%Client Management Costs Selected 0%
Recruiting Costs Alloc Selected -140% 10%Marketing Costs Alloc Selected -43%
Max to Client Price Disc. Selected 1 1
12 911
-90 10
100% 2 000-90
a
aa
Fiscal Year 2009 a Fiscal Year 2010
Fiscal Month (All) a Fiscal Month (All)
Industry Name (All) a Industry Name (All)
Region Name (All) aCusto Rev Segment Region Name (All)
Acct Mngr Name (All) a 22 West 2_S 12 752 -47,51% 52,43% 47,57% 12 911 -5,06% 54,21% 45,79% Acct Mngr Name (All)
Customer Name (All) a 23 West 3_M 11 197 -45,09% 53,40% 46,60% 10 842 -3,96% 54,54% 45,46% Customer Name (All)
Market Name (All) a 2 Central 2_S 9 752 -54,42% 57,84% 42,16% 9 476 -4,18% 58,45% 41,55% Market Name (All)
Market Segment Name (All) a 3 Central 3_M 9 106 -53,63% 60,02% 39,98% 8 766 -3,78% 60,78% 39,22% Market Segment Name (All)
Customer Breath Name (All) a 12 North 2_S 8 683 -55,21% 59,48% 40,52% 8 822 -4,00% 60,60% 39,40% Customer Breath Name (All)
Custo Rev Segment Name (All) a 17 South 2_S 7 717 -49,86% 53,82% 46,18% 7 260 -2,98% 53,93% 46,07% Custo Rev Segment Name (All)
Material GrP Name (All) a 13 North 3_M 7 518 -50,55% 57,43% 42,57% 7 246 -2,92% 57,01% 42,99% Material GrP Name (All)
Product Family Name (All) a 18 South 3_M 6 956 -46,67% 55,16% 44,84% 6 596 -2,57% 56,50% 43,50% Product Family Name (All)
Product Grp Name (All) a 7 East 2_S 6 904 -56,40% 59,16% 40,84% 6 835 -3,18% 60,83% 39,17% Product Grp Name (All)
Plant Name (All) a 8 East 3_M 6 356 -56,01% 63,09% 36,91% 6 160 -2,82% 63,28% 36,72% Plant Name (All)
Prod Hier Name (All) a 24 West 4_L 3 291 -44,08% 57,92% 42,08% 3 415 -1,14% 55,29% 44,71% Prod Hier Name (All)
Prod Rev Segment Name (All) a 4 Central 4_L 3 022 -50,53% 62,25% 37,75% 2 706 -1,04% 61,17% 38,83% Prod Rev Segment Name (All)
Product Name (All) a TOTAL LOOK AT 93 254 -609,96% 56,78% 43,22% 91 034 -37,60% 57,50% 42,50% Product Name (All)
Change Type of Analysis 2
Gros
s Pro
fit (%
N
et S
ales
)
Gros
s Sal
es
D&R
& O
ther
M
ktg.
(% G
ross
Sa
les)
COGS
(% N
et
Sale
s)
Gros
s Pro
fit (%
N
et S
ales
)
Gros
s Sal
es
D&R
& O
ther
M
ktg.
(% G
ross
Sa
les)
COGS
(% N
et
Sale
s)
MAP
Apply Zoom
Man
ual &
Aut
o Zo
omM
ap O
ption
s
DATA TABLE
East
Man
ual G
raph
Nº
South
North
South
Auto
Gra
ph N
º
Code
West
West
Central
East
North
Change Type of Analysis 1
Region
WestCentral
Central
-60
-50
-40
-30
-20
-10
0
10
-4 000 -2 000 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000
Dynamic Dispersion Map - Y: Disc. & Reb. (% Gross Sales) , X: Gross Sales
A B Profile A Profile B
Manual Y MAX
Manual Y MIN
X MAX
X MIN
Y MAX
Detected
X MIN
Detected
Y MIN
X MAXDetected
Detected
Apply
Speed
Apply
Speed
Speed
Speed
Apply
Apply
FULL SCREEN
USUAL SCREEN
Dynamic Dispersion MapY: Disc. & Reb. (% Gross Sales)
X: Gross SalesBubbles: Gross Profit
Top Ten Gross Sales D&R & Other Mktg. (% GroCOGS (% Net Sales)Gross Profit (% Net Sales)Gross Sales D&R & Other Mktg. (% GroCOGS (% Net SalesGross Profit
ADJUST AXESAUTO AXES
Region Custo Rev S
Pricing
Results
Lev
ers
Different levels of Levers delivering the same result: Inconsistent
Levers correlated to Results: Consistent
ResultsL
ever
s
Using the Pricing Toolbox, we measure The impact of Pricing Levers on Performance:Are they consistent?
Consistency Concept
Market- Discounts- Rebates- Sales Costs- Mktg. Costs- (Others Costs)
- Sales- Margin- SoW & MS- Value Perception- Customer Satisfaction- (Others Results)
Levers Results
Using the Pricing Toolbox, we measure The Pricing Levers’ Efficiency:Do they provide a positive ROI?
Evolution of Results
+
-
Evo
luti
on
o
f L
ever
s
+
-
+ Levers / ++ Results: Efficient
More Levers / Less Results: Black Hole
Less Levers / More Results: Managers’ Dream
MarketLevers
Results
Improving efficiency drives TOP LINE impact
Efficiency Concept
++ Levers / + Results: Inefficient
- Levers / -- Results: Inefficient -- Levers /
-Results: Efficient
Using the Pricing Toolbox, we measure The Pricing Levers’ Efficiency:Do they provide a positive ROI?
Evolution of Results
+
-
Evo
luti
on
o
f L
ever
s
+
-
+ Levers / ++ Results: Efficient
More Levers / Less Results: Black Hole
Less Levers / More Results: Managers’ Dream
MarketLevers
Results
Improving efficiency drives TOP LINE impact
Efficiency Concept
++ Levers / + Results: Inefficient
- Levers / -- Results: Inefficient -- Levers /
-Results: Efficient
Sales
So
W
Ineffective Implementation zones
Effective Implementation zone
Using the Pricing Toolbox, we measure Levers Level Effectiveness: Are we hitting the soft spot?
Effectiveness Concept
P=1
Market- Sales- Margin- SoW & MS- Value Perception- Customer Satisfaction- (Others Results)
Levers Results- Discounts- Rebates- Sales Costs- Mktg. Costs- (Others Costs)
So
W
P=1
Tool 5: Variance Analysis
What it is: Analysis of variance in sales revenues.
Price variance Volume variance
With additional detail on demand May be used for a single product or a
group of products, by Sales rep or by client segments / channel.
What it does: provide visibility of key evolutions of
revenues and drivers for variance. Helps monitor & manage pricing
strategy , campaigns & discounting policies
Corrective actions it may lead to: Price adjustments. Launch of campaigns & reactive actions Competitive actions
The stakes: Strong monitoring of Price & volume performance at any level – key driver to discipline & change
management
Revenue Variance(UnitPrice T2 * UnitVolume T2 ) - (UnitPrice T1 * UnitVolume T2 )
Price Variance(Unit PriceT2 - Unit PriceT1) * Unit VolumeT2
Menu-Tier Variance(MenuTier(T2)_OldUnitPrice x VolumeT2) - (UnitPriceT1 x VolumeT2)
Item-Price Variance(UnitPriceT2 x VolumeT2) - (MenuTier(T2)_OldUnitPrice x VolumeT2)
Promotional Item Price Variancetbd - will be a special component of item-price
Client Conditions & Discount Variancetbd - will be a special component of item-price
Volume Variance(Unit VolumeT2 - Unit Volume T1) * Unit PriceT1
Mix Variance(Unit VolumeT2 - (Unit Mix%T1 * Total VolumeT2)) * Unit PriceT1
Quantity Variance((Unit Mix%T1 * Total VolumeT2)-Unit VolumeT1) * Unit PriceT1
Variance Analysis tool – Impact Summary
34
REVENUE $172 212PRICING $394 409
TIER $361 927PRICE $32 482PROMO
VOLUME -$222 197PRODUCT MIX $135 047QUANTITY -$357 244
QTY PER CUSTOMER -$54 482TRAFFIC VOLUME -$302 761
NEW/CLOSED STORES $196 605CUSTOMERS/STORE -$499 366
Contribution to Revenue VariancePricing
Full ScreenNormal Screen
Variance Analysis tool – flexible analyses
35
AREA
REGION # Menu Items BE TotalT1 0,41 per Cust 2,37
T2 0,41 per Cust 2,36
(sample)
Daypart: All% SD Hot Mlk/Jce Kids Total BE Total
T1 ###### 1,9% 7,7% 1,4% 1,0% 14,7% 86,0%T2 ###### 1,9% 7,4% 1,4% 1,0% 14,5% 85,0%
Difference (#) -0,0% -0,3% -0,0% -0,0% -0,3% -1,0%Difference (%)
CD Other0,3%0,3%+0,0%
Cust. Count (total) BER TotalCompetitive Index
2,5%2,5%+0,0%
Impact / MnthWeather Index
9 608 658
Beverage Incidence Rates (Daypart = All)Uncontrollable Factors
CPR Index
Advertising index
Brand Loyalty Index (BLI)
-$499 366Cust. per Store Var
-$302 761
Total Hours of Operation
Opening/Closing Var
+$196 605Controllable Factors
Price Variance+$394 409
+$172 212
+$32 482
+$361 927
Menu-Tier Variance Change
Item-Price Variance
Dine-In (Net)
Product Mix Variance+$135 047
Volume Variance-$222 197
Qty Per Cust. Var
-$54 482
-$357 244Quantity Variance
9 402 908-$156 008
Comp. Rev Changes -205 750 -205 750-2,14% -2,14%
Total (Net)
+$1 252 523
KEY PRICING INDICATORS (KPI) SUMMARY
+1,6%
-4,1%
Loc. Accessibility Index
+3,3%
Carry Out (Net)
9 402 9089 608 658
-1,8%
+1,4%
+3,0%
+0,3%
+1,1%
-3,0%
-2,5%
-0,5%
Customer Count Var+$1 080 311
Tool 5: Time Series (Illustrative)
Page 36
SK
U U
nit
Pri
ce
s (
$)
Tme Series (Weeks)
What it is: Analyses Prices (or D&R)
evolutions over time May be used for a single
product or a group of products, globally or by client segments / channel, or by account manager.
What it does: provide visibility and insights
on evolutions to identify trends / changes in dynamics or correlations & opportunities & threats that they represent
Corrective actions it may lead to: Improved / more rational pricing onbjectives. Industry pricing actions to influence pricing dynamics Price structure revbalancing
The stakes: Together with other aspect of transactional analyses, typically results in bottom line improvement of up
4 % of sales in the first year
Plant Name (All)Industry Name (All)Custo Rev Segment Name 5_VLProduct Family Code (All)Product Grp Code (All)Prod Rev Segment Name (All)
1,00
2,00
4,00
8,00
16,00
32,00
64,00
nov.-07 juin-08 déc.-08 juil.-09 janv.-10 août-10 févr.-11 sept.-11
Ac1
Ac10
Ac11
Ac12
Ac13
Ac14
Ac15
Ac16
Ac17
Ac18
Pricing
Full ScreenNormal Go to Financial Pivot
Go to Product Pivot
Go to Price Evolution
Go to SKU Elasticity
Go to Product Elasticity
Go to Customer Elasticity
Flexible tool integrated in Transactional analysis
37
Levers Selection AllUnexplained Disc SelectedStdVolume Discount SelectedList to Max Price Disc. SelectedEarly Payment Discount SelectedFull truck Discount SelectedDiscretionary Discount SelectedRebates SelectedUnbilled Services SelectedUnbilled guarrantees Selected 230 10Client Management Costs Selected -64Recruiting Costs Alloc Selected -60 10Marketing Costs Alloc Selected -434Max to Client Price Disc. Selected 21 335 17
3 852-90 10589
1 5000 0
1 2 3 4 5 6 7 8 9 10 11 12aaaaaaaa 1 1 1 249 -140 -30,16% 41,02% 1 249 -140 872 1,09%a 2 2 3 138 -340 -28,15% 44,12% 3 138 -340 2 254 2,74%a 3 3 3 229 -358 -29,74% 41,12% 3 229 -358 2 269 2,82%a 4 4 3 077 -347 -28,58% 44,01% 3 077 -347 2 197 2,68%a 5 5 2 065 -235 -28,55% 45,85% 2 065 -235 1 475 1,80%
Year 2009 a 6 6 2 232 -247 -29,57% 43,42% 2 232 -247 1 572 1,95% Year 2009Month (All) a 7 7 2 067 -232 -30,65% 40,30% 2 067 -232 1 434 1,80% Month (All)Region Name (All) a 8 8 2 117 -242 -30,12% 42,64% 2 117 -242 1 480 1,85% Region Name (All)
Acct Mngr Name (All) a 9 9 1 583 -172 -28,97% 44,14% 1 583 -172 1 124 1,38% Acct Mngr Name (All)
Industry Name (All) a 10 10 2 633 -300 -29,80% 43,15% 2 633 -300 1 849 2,30% Industry Name (All)
Market Name (All) a 11 11 2 792 -315 -28,95% 43,49% 2 792 -315 1 984 2,44% Market Name (All)
Market Segment Name (All) a 12 12 2 638 -289 -29,82% 43,50% 2 638 -289 1 852 2,30% Market Segment Name (All)
Product Name (All) a 28 820 -3 217 -11,16% 43,13% 28 820 -3 217 20 361 25,15% Product Name (All)
Glob SoW Name (All) a 114 594 -12 636 -11,03% 63,85% 114 594 -12 636 127 229 100,00% Glob SoW Name (All)
Customer Name (All) a 25,1% 25,5% 101,2% 67,5% 25,1% 25,5% 16,0% 25,1% Customer Name (All)
Time Series - (Lines in Rigth Axe: Rebates-Columns in Left Axe: Gross Sales)
Apply Zoom
Man
ual &
Aut
o Zo
om
43
Gros
s Sal
es
Reba
tes
Disc
. & R
eb.
(% G
ross
Sa
les)
Gros
s Pro
fit
(% N
et S
ales
)
Gros
s Sal
es
Reba
tes
Map
Opti
ons
Net
Sal
es
Gros
s Sal
es
(% T
otal
)
Data Table
9
5
Manual Graph
Nº
678
Auto Graph Nº
Calendar Week Code
12
Calendar Week Name
12
10
TOTAL LOOK ATTOTAL PROFILETOTAL LOOK AT/TOTAL PROFILE
11
Manual Lines MAX
Manual Lines MINCol. MAXCol. MIN
Lines MAXDetected
Col. MINDetected
Lines MIN
Col. MAXDetected
Detected
ApplySpeed
ApplySpeed
Speed
SpeedApply
Apply
-400
-350
-300
-250
-200
-150
-100
-50
0
0
500
1000
1500
2000
2500
3000
3500FULL
SCREEN USUAL SCREEN
Dynamic Disband GraphLines in Rigth Axe: Rebates
Columns in Left Axe: Gross Sales
A-Z Gross Sales Rebates Disc. & Reb. (% Gross SaleGross Profit (% Net Sales)Gross Sales Rebates Net Sales Gross Sal
Pricing
Tool 6: Dynamic evolutions & elasticity (Illustrative)
Page 38
Ch
an
ge
in
Pri
ce
(%
)
Change in Volume (%)
What it is: Analysis of evolution of Price
(and – or D&R) and how they Impact Volumes or Margins.
May be used for a single product or a group of products, globally or by client segments / channel, or by account manager.
What it does: provide visibility and control of
actual dynamics & relationships between price components & performance
Corrective actions it may lead to: Improved Pricing & client conditions policies. Earlier identification of competitive threats & changes in industry dynamics Targeted price adjustment based on expected impact
The stakes: Key to finer price adjustments & improved price realization
Disc. & Reb. Selection AllUnexplained Disc SelectedStdVolume Discount SelectedList to Max Price Disc. Selected Dynamic Evolution Map - Y: Net Price , X: Volume (Units)
Early Payment Discount SelectedFull truck Discount SelectedDiscretionary Discount Selected 30
Rebates SelectedUnbilled Services SelectedUnbilled guarrantees Selected 100% 10000%Client Management Costs Selected 11%
Recruiting Costs Alloc Selected 0% 10000%Marketing Costs Alloc Selected -11%
Max to Client Price Disc. Selected 200% 1000%
5%
-90% 10000%
0%
100% 200%
-90%
a
aa
Fiscal Year 2009 a Fiscal Year 2010
Fiscal Month (All) a Fiscal Month (All)
Industry Name (All) a Industry Name (All)
Region Name (All) a Region Name (All)
Acct Mngr Name (All) a 20 South 5_VL 1 708 -40,08% 56,70% 43,30% 1 513 -0,43% 54,25% 45,75% Acct Mngr Name (All)
Customer Name (All) a 15 North 5_VL 1 241 -41,13% 55,04% 44,96% 1 102 -0,34% 55,80% 44,20% Customer Name (All)
Market Name (All) a 19 South 4_L 1 808 -44,50% 57,28% 42,72% 1 580 -0,52% 56,90% 43,10% Market Name (All)
Market Segment Name (All) a 18 South 3_M 6 956 -46,67% 55,16% 44,84% 6 596 -2,57% 56,50% 43,50% Market Segment Name (All)
Customer Breath Name (All) a 14 North 4_L 2 204 -48,10% 57,27% 42,73% 1 992 -0,75% 58,24% 41,76% Customer Breath Name (All)
Custo Rev Segment Name (All) a 17 South 2_S 7 717 -49,86% 53,82% 46,18% 7 260 -2,98% 53,93% 46,07% Custo Rev Segment Name (All)
Material GrP Name (All) a 4 0 4_L 3 022 -50,53% 62,25% 37,75% 2 706 -1,04% 61,17% 38,83% Material GrP Name (All)
Product Family Name (All) a 21 West 1_VS 2 044 -51,31% 50,96% 49,04% 1 932 -0,81% 51,62% 48,38% Product Family Name (All)
Product Grp Name (All) a 9 East 4_L 1 974 -54,95% 64,78% 35,22% 1 718 -0,73% 63,79% 36,21% Product Grp Name (All)
Plant Name (All) a 1 0 1_VS 1 759 -59,30% 55,62% 44,38% 1 568 -0,77% 57,77% 42,23% Plant Name (All)
MAP
-2
0
2
4
6
8
10
12
14
-1 0 1 2 3 4 5 6
Dynamic Evolution Map - Y: Net Price , X: Volume (Units)
A B Profile A Profile B
Pricing
Manual Y MAX
Manual Y MIN
X MAX
X MIN
Y MAX
Detected
X MIN
Detected
Y MIN
X MAXDetected
Detected
Apply
Speed
Apply
Speed
Speed
Speed
Apply
Apply
FULL SCREEN
USUAL SCREEN
ADJUST AXESAUTO AXES
Dynamic Evolution / elasticity Tool
39
Disc. & Reb. Selection AllUnexplained Disc SelectedStdVolume Discount SelectedList to Max Price Disc. Selected Dynamic Evolution Map - Y: Net Price , X: Volume (Units)
Early Payment Discount SelectedFull truck Discount SelectedDiscretionary Discount Selected 30
Rebates SelectedUnbilled Services SelectedUnbilled guarrantees Selected 100% 10000%Client Management Costs Selected 11%
Recruiting Costs Alloc Selected 0% 10000%Marketing Costs Alloc Selected -11%
Max to Client Price Disc. Selected 200% 1000%
5%
-90% 10000%
0%
100% 200%
-90%
a
aa
Fiscal Year 2009 a Fiscal Year 2010
Fiscal Month (All) a Fiscal Month (All)
Industry Name (All) a Industry Name (All)
Region Name (All) aCusto Rev Segment Region Name (All)
Acct Mngr Name (All) a 20 South 5_VL 1 708 -40,08% 56,70% 43,30% 1 513 -0,43% 54,25% 45,75% Acct Mngr Name (All)
Customer Name (All) a 15 North 5_VL 1 241 -41,13% 55,04% 44,96% 1 102 -0,34% 55,80% 44,20% Customer Name (All)
Market Name (All) a 19 South 4_L 1 808 -44,50% 57,28% 42,72% 1 580 -0,52% 56,90% 43,10% Market Name (All)
Market Segment Name (All) a 18 South 3_M 6 956 -46,67% 55,16% 44,84% 6 596 -2,57% 56,50% 43,50% Market Segment Name (All)
Customer Breath Name (All) a 14 North 4_L 2 204 -48,10% 57,27% 42,73% 1 992 -0,75% 58,24% 41,76% Customer Breath Name (All)
Custo Rev Segment Name (All) a 17 South 2_S 7 717 -49,86% 53,82% 46,18% 7 260 -2,98% 53,93% 46,07% Custo Rev Segment Name (All)
Material GrP Name (All) a 4 0 4_L 3 022 -50,53% 62,25% 37,75% 2 706 -1,04% 61,17% 38,83% Material GrP Name (All)
Product Family Name (All) a 21 West 1_VS 2 044 -51,31% 50,96% 49,04% 1 932 -0,81% 51,62% 48,38% Product Family Name (All)
Product Grp Name (All) a 9 East 4_L 1 974 -54,95% 64,78% 35,22% 1 718 -0,73% 63,79% 36,21% Product Grp Name (All)
Plant Name (All) a 1 0 1_VS 1 759 -59,30% 55,62% 44,38% 1 568 -0,77% 57,77% 42,23% Plant Name (All)
MAP
Map
Opti
ons
Man
ual &
Aut
o Zo
om
Apply Zoom
DATA TABLE
Gros
s Sal
es
D&R
& O
ther
M
ktg.
(% G
ross
Sa
les)
COGS
(% N
et
Sale
s)
Man
ual G
raph
Nº
Aut
o G
raph
Nº
Code
Change Type of Analysis 1
Change Type of Analysis 2
Region
South
Gros
s Sal
es
D&R
& O
ther
M
ktg.
(% G
ross
Sa
les)
COGS
(% N
et
Sale
s)
Gros
s Pro
fit (%
N
et S
ales
)
Gros
s Pro
fit (%
N
et S
ales
)
South
North
South
North
South
West
East
-2
0
2
4
6
8
10
12
14
-1 0 1 2 3 4 5 6
Dynamic Evolution Map - Y: Net Price , X: Volume (Units)
A B Profile A Profile B
Pricing
Manual Y MAX
Manual Y MIN
X MAX
X MIN
Y MAX
Detected
X MIN
Detected
Y MIN
X MAXDetected
Detected
Apply
Speed
Apply
Speed
Speed
Speed
Apply
Apply
FULL SCREEN
USUAL SCREEN
Dynamic Evolution MapY: Net Price
X: Volume (Units)Bubbles: Gross Profit
Top Ten Gross Sales D&R & Other Mktg. (% GroCOGS (% Net Sales)Gross Profit (% Net Sales)Gross Sales D&R & Other Mktg. (% GroCOGS (% Net SalesGross Profit
ADJUST AXESAUTO AXES
Y: Net Price
Value analysis & measurement Tools
40
Value Analysis
EVC / EVIU Value Maps / curves CBC / Perceptions
Win / Loss Elasticities Price Points
Marketing & Sales support
PortFolio Ana.
Comp. Intell
Perceived Value Measurement0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
0
1
2
3
4
5
6
7
8
9
80 85 90 95 100 105 110 115
Product price occurence (in comparable sales situation)
Occurrences
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Key Tools Economic Value Modeling Value Map & Curves Choices Based Conjoint
Modeling & simulation Win / Loss analyses Elasticities nalyses &
simulation Price Points / Psycholgical
Pricing analyses
Tools to help Measure Value Perception & Willingness to pay & elasticities & to use Value as a base for Pricing
Client Value
– “Rational”• Financial Value Measurement (FVM) /
Expected value in use (EVIU)• Cost to customer without product minus
cost to customer with product
– “Emotional”• Price elasticity• Perceived value of ‘qualitative’ attributes
FVM/EVIU
Simulation of client level impact
Transactional analysis / observed elasticities
Win / Loss analyses Key Buying Factors
Choice based conjoint/ Perceived price/value
Discount / Rebates elasticities
Analysis / ToolsLogic / Approach
Tool 7: Economic Value to Clients (Illustrative)
Page 42
What it is: Objective evaluation of
economic value to client of our offering versus next best competitive alternative.
Developed by target segment and or for individual clients.
Can be adapted to supply an interactive sales support tool
What it does: Analyses & visualizes the
Value of our offering
Actions it may lead to: Development of targeted offers (focusing on attributes that create value for clients) Can provide a very effective support tool for Sales force Targeted communication & marketing
The stakes: In period of High pricing turbulence (such as now), typically results in bottom line improvement of up to
4 % through better ability to communicate value to clients If used in the context pf a new product launch (or revamp), it often results in bottom line improvement
of 10% or more through value based pricing
Increased
Efficiency
Total Benefit
€123
€2260
€2137
Longer Life IncrMaintCost
ConversionCosts
Total Costs€300
€200 €500
TotalPrem.€1760
€369 Best Alternative
TotalValue€2029 !
EVC Tool – Synthesis table
43
EVC Tool – Value Waterfall
44
EVC Tool – Value Hierarchy
45
EVC Tool – Stakeholders Value Priorities
46
EVC Tool – Value Lever Logic
47
EVC Tool – Value Lever economic Model
48
Tool 8: Segmented Competitive Value Maps
Page 49
0.50
1.50
0.50 1.00 1.50
Re
lati
ve
Pri
ce
ValueDisadvantaged
ValueAdvantaged
Relative Value (Perceived /measured)
Fair V
alue
Lin
e
Competitor 1
Competitor 2Competitor 3
Competitor 4
Segmented Competitive Value Maps
(Segment X, Market B, 2008) What it is: Analysis & mapping of competitive.
Prices Value (perceived or measured)
May be used for a single product or a group of products, globally or by client segments / channel.
What it does: provide visibility and control of Value & Price
positioning of Products by segment. Helps define effective Value / Pricing
segmentationtegic
Corrective actions it may lead to: Price adjustments. Improved proved targeting of Price & Value proposition &segmentation Support to Sales force in Value Selling
The stakes: Varies considerably. Repositioning/ Retargeting of Value Proposition may often result in double digit
price increases or Volume increases
Value Map Tool -
50
Tool 9: CBC / Perception Analysis (Illustrative)
Page 51
What it is: T he most effective
methodology for measuring ‘Qualitative’ Value perception & willingness to pay & developing Price response / elasticity models
Attributes elasticity not limited to price but can include other key factors affecting WTP
What it does: Identifies & quantifies key
decision drivers Model the impact of changes in
price or performance on key ‘attributes’
Actions it may lead to: More accurate & effective price & value positioning. Identification & improvement of other levers that influence clients decisions Improved competitive tactics & positioning
The stakes: Performant approach to price optimization in many markets / industries.Typically results in bottom line
improvement of up to 10 %
Tool 10: Win / Loss Analysis (Illustrative)
Page 52
What it is: Systematic & regular
evaluation of reasons of Wins & losses (or significant changes in Share of Accounts at clients).
Criteria will include our & competitive prices but also conditions & buyer profile to identify drivers
What it does: Help identify & quantify key
decision drivers Helps optimize price
positioningActions it may lead to: More accurate & effective price positioning. Identification & improvement of other levers that influence clients decisions Improved competitive tactics & positioning
The stakes: Performant approach to price optimization in deal driven B2B environment.Typically results in bottom
line improvement of up to 4 %
Win / Loss analysis tool
53
Detailed modeling of ‘Win Probability’ as a function of Discount level
Tool 12: Price Points Analysis (Illustrative)
Page 54
What it is: Identification of Psychological
price points from a customers’ perspective & their impact on demand
Criteria will include our & competitive prices but also conditions & buyer profile to identify impact
What it does: Identification & measurement
of price points Estimated impact of potential
price realignments / price points optimizationActions it may lead to:
More accurate & effective price points positioning. Improve price alignments along the product range & vis a vis competition Improved competitive tactics & positioning
The stakes: Performant approach to price optimization impulse / image driven product ranges or industries with
high pricing rivalry
0
1
2
3
4
5
6
7
8
9
80 85 90 95 100 105 110 115
Product price occurence (in comparable sales situation)
Occurrences
Marketing & Sales Support Tools
55
Key Tools Share & competitive
performance monitoring Peer Pricing & Value selling
support Portfolio analyses Analyses of performance on
key Value attributes Campaign effectivenes
measurement & modeling Competitive & Pricing
Intelligence tools
Tools to help support Strategic Marketing & Sales with a value focus & Marketing effectiveness improvements
Tool 13: Portfolio Pricing Dashboard (Illustrative)
Page 56
What it is: Systematic & regular
Dashboard providing indication of performance & guidance on Client portfolio.
Criteria used may vary by sector and based on strategic priorities
What it does: Monitoring tool Support to sales force in
execution of Pricing strategy
Actions it may lead to: Better targeting of pricing actions by sales force. Identification of Price increase opportunities or imminent price threats Improved monitoring of portfolio performance
The stakes: Higher effectiveness in Pricing execution. Typically results in bottom line improvement of up to 2%
Client Conditions Monthly Monitoring
Report
AM: John Smith –Client Portfolio
Total
Previous.year
Client Margin (YTD)
Vol.Band (Ann.)
Disc.Vol.
Band
Except.(N/Y &Auth)
Curr.Disc(%)
Disc.Ok’d(%)
Renego.(previous)
Client Rev. (YTD)
Renego.(next)
Growth(%)
IncentiveScore
(Sales Rep) Client
ABC
ACB
BAC
BCA
1.2M€
8.1M€
0.2M€
3.2M€
6%
32%
1%
-12%
31%
28%
29%
21%
L1
XL1
M1
L2
YTL
14%
17%
18%
25%
14%
18%
11%
18%
09/07
02/07
06/07
08/07
25
75
1
-20
L2
XL1
M2
L2
09/08
02/08
06/08
01/08
3.2M€ -2% 29% 17% 18% 354On Time6
Control 3Exception Handling
Monitoring 4Renegociations
Monitoring 5Calculation of
Salesman’s incentive
Control 2Net Price Check
Control 1Volume Band
Tool 14: Peer Pricing (Illustrative)
Page 57
What it is: Support to sales force by
providing contextual information on similar offers (price conditions, features & outcome).
Key is identification of comparable deals & collection of relevant information
What it does: provide visibility on what is
feasible / reasonable Provides reassurance & peer
pressure to performActions it may lead to: More effective pricing by sales force (better margins). Stronger emulation amongst sales force Elimination of ‘way over-/under- priced offers’
The stakes: Similar to Win/Loss - approach to price optimization in deal driven B2B environment. Typically results in
bottom line improvement of up to 4 %
Peer Pricing Tool
58
Tool 15: Portfolio Analysis / Price Structure Mapping (Illustrative)
Page 59
Product Performance (Protection index)
Product 3
Product 2
Product 3
Product4
Segmented Price Structure Maps
(Segment X, Market B, 2008)What it is: Analysis & mapping of segmented Product
range. Prices Product performance
May be used for a group of products, globally or by client segments / channel.
What it does: provide visibility and control of coherence of
product Price & Performance positioning. Can be used competitively to identify
competitive opportunities / threats
Corrective actions it may lead to: Price adjustments. Improved proved positioning of Products Rationalization of product range
The stakes: Depending on initial state 1 to 3 % improvement in average realized price
Fu
ll P
ric
e
/ H
a (
€)
Tool 16: Rating Performance / Value Curves
What it is: Analysis & mapping of competitive.
Value performance Performance on attributes
May be used for a single product or a group of products, globally or by client segments / channel.
What it does: provide visibility and control of Value
positioning of Products by segment. Identifies key attributes by segment Helps define effective Value segmentation
Corrective actions it may lead to: Value proposition adjustments Improved targeting of Price & Value proposition &segmentation Support to Marketing force in product development / Product attributes
The stakes: Varies considerably. Repositioning/ Retargeting of Value Proposition may often result in double digit
price increases or Volume increases
Weight 56 1 1 10 13 19
Ship Complete
Defects Range Service Shipment Date
Price
Region: CentralSegment: Price Driven
Competitors Value Graphs
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Tool 17: Promotional Performance analysis (Illustrative)
Page 61
Dis
co
un
t O
ffe
red
c (
% L
ist
pri
ce
)
Sales Impact (% LT Lift)
What it is: Analysis or profit & volume
impact of promotions. can be used any type of
promotional / sales animation action to evaluate ROI of action.
What it does: provide visibility and control of
actual performance of action, including stock effects & cannibalization, to provide improved vision of actual & relative performance
Corrective actions it may lead to: Re-adust marketing budget to support most effective actions. Best practice transfer (Test, Learn & generalize) Improved targeting of promotions
The stakes: 20 to 40% improvement in Marketing ROI
2009Row Labels Product Code Vol #VALUE! #VALUE! Gross Rev Product Code
Ac1 Ac1 1 695 2,63 2,63 4 181 Ac1 -6% 0% 43,02Ac1 Ac13 1 572 34,10 34,14 44 413 Ac13 -17% 0% 159,98Ac1 Ac15 1 170 39,45 39,42 57 360 Ac15 24% 0% 342,24Ac1 Ac16 1 363 42,16 42,17 56 952 Ac16 -1% 0% 159,69Ac1 Ac17 1 460 44,70 44,66 53 414 Ac17 -18% 0% -226,76Ac1 Ac18 1 331 47,18 47,31 73 339 Ac18 16% 0% -62,23Ac1 Ac19 1 534 50,00 49,85 66 983 Ac19 -12% 0% -42,85Ac2 Ac2 1 408 5,24 5,26 7 604 Ac2 3% 0% -8,74Ac2 Ac21 1 248 55,33 55,24 74 468 Ac21 8% 0% 48,24Ac2 Ac23 1 479 60,46 60,42 84 845 Ac23 -5% 0% -66,91Ac2 Ac24 1 375 63,08 62,90 88 276 Ac24 2% 0% 7,52Ac2 Ac27 1 416 70,99 70,84 108 300 Ac27 8% 0% 36,16Ac3 Ac30 1 406 78,91 78,88 119 755 Ac30 8% 0% 207,86Ac3 Ac31 1 181 81,35 81,36 120 448 Ac31 25% 0% -1861,22Ac3 Ac32 1 375 84,15 84,17 119 143 Ac32 3% 0% -216,68Ac3 Ac33 1 652 87,07 86,69 100 272 Ac33 -30% 0% -68,35Ac3 Ac34 1 547 89,32 89,10 119 633 Ac34 -13% 0% -53,16Ac3 Ac35 1 332 92,10 91,75 127 072 Ac35 4% 0% 10,27Ac3 Ac36 1 312 94,75 94,53 125 885 Ac36 2% 0% 6,56Ac3 Ac37 1 499 97,37 97,11 135 000 Ac37 -7% 0% -27,14Ac3 Ac38 1 256 99,62 100,07 124 493 Ac38 -1% 0% 2,07Ac3 Ac39 1 472 102,62 102,63 149 513 Ac39 -1% 0% 79,69
Ac1Ac13
Ac15Ac16
Ac18
Ac19
Ac2
-1%
-1%
0%
1%
1%
-40% -30% -20% -10% 0% 10% 20% 30% 40%
Price change (y) vs Volume Change (x) (2008-2009 - by Product )
Full ScreenNormal Screen
Go to Financial Pivot
Go to Product Pivot
Go to Price Evolution
Go to SKU Elasticity
Go to Product Elasticity
Go to Customer Elasticity
++
--2011 – Promotional Performance analysis
Detailed analysis of impact of promotions on volume & bottom line
62
Optimization of promotional effectiveness
Tool 18: Benchmarking & Competitive Intelligence
Page 63
What it is: Systematic & regular
monitoring & benchmarking of competitors ‘Sell-In’ & ‘Sell-out’ prices at relevant levels
Key ingredient of Pricing Intelligence
What it does: provide ability to react faster
& smarter to competitive price movements
0
10
20
30
40
50
60
70
80
90
1 3 5 7 9 11 13 15
Avis
Hertz
Europcar
Easy Rentacar
ADA
eSixt
Budget
RentaCar
Category xxx - Average Daily Rate Comparison(as function of rental duration)
Corrective actions it may lead to: Better anticipation / faster reaction to changes in competitive prices Identification of Price increase opportunities or imminent price threats Stronger sales pitch
The stakes: In period of High pricing turbulence (such as now), typically results in bottom line improvement of up to
2 % through better anticipation of - / faster reaction to - price movements
Pricing Performance Management tools
64
Pricing Process Performance
Pricing BSC Pricing Diagnostic Pricing RACI
Pricing Thought Proc. Pricing Alignment Industry Pricing
Value Analysis
CBC / Perceptions
Price Points
0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
Region 2 1 2 3 4 5 6
Year-Month 1
Division 5
Strategy Map Mission Vision Strategy Measure Follow up Last Year Plan /TargetTrend / Result
Issues Initiative Responsible
Shared Pricing Methodology
Roll out Level2 Meth.
% target staffed trained
Weekly 58 68 65 Pricing Roadshow J W
optimization of promotions
Weighed Impact measure
Monthly 128 124 126 Test Platform PH
Product/Service innovation
% n+1 sales from New product
Monthly 5,9 6,0 6,0 Design to Value J S
Price/volume planning
Weighed Volume prediction error
Monthly -2,3% -2,5% -3,0%Elasticity study AC
rangeAA
Roll out Level 2 Pricing Toolkit
% Sales covered, new entities
Monthly 88% 96% 90% Toolkit Roll out GT
Discipline in conditions
% discount within Std
Weekly 82% 105% 112%
Pricing Corridor out layers (CA & %) Weekly -1,07% -1,2% -1,17%
Value Selling % usage of DTB Monthly 23% 58% 50% DTB Roll out GT
Sell in Sellout measured
% Key Products CA Monthly 46% 86% 80%
Strongest Brand reinforce Brand premium Quarterly 11,4 14,5 14,9Rebranding e
EuropeComm
Best Distrib. Presence
Distributor SoW & coverage
Monthly 36% 40% 35% Partnerhip Program Channels & PH
Price Point Management
%Sales at Price point (keyprods)
Monthly 34% 36% 39%
Targeted Offers % Wins Weekly 38% 35% 35% Sales call Targeting Sales & LL
Consumer ratingsPerceived Value index advantage
Twice a Year 143 129 145
Customer value satisfaction
# price/ value complaints
Weekly 0,99% 0,99% 0,97%
Best of Class Margin
Margin % Annually 50,7% 53,9% 61,1%Portfolio
rebalancingMktg & LL
Target Share 2012 Weighed share Monthly 21,9% 23,7% 26,8%
Growth Sales Growth Monthly 1,5% 8,6% 8,5%
Shareholder returns high
ROE Quarterly 46,5% 52,8% 54,6%
Cust
omer
How our customers see us, rate our performance & respond to it
Fina
ncia
l
Bottom line impact & evolution of financial performance
Roll out level 2 systems, processes & tools
Test & improve lev3 tools in priority units
Develop distributor partnerships
Development of value based offers & features
Maximize growth whilst maintaining current margin levels
Gradually get Level 3 capability, leveraging current best practices
ACME Corporation - Pricing / Value Balanced Scorecard
Lear
ning
Capabilities Development to sustain our ability to change and improve
Proc
ess
business processes Improvement & roll out
North
2008
Access Control
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Tools to help follow monitor, control & gradually improve the strategic Pricing & Value management capabilities of the company
Key Tools Pricing Balanced Score Card Pricing Diagnostics &
Improvement Roadmap Pricing Processes & RACI Pricing Thought Process Pricing Alignment reports Industry Pricing analyses &
decision support
Tool 19: Pricing BSC & Dashboards (Illustrative)
Page 65
What it is: Balanced scorecard – used to
monitor globally performance & development of pricing strategy.
Criteria used may vary by sector and level of analysis
What it does: provide visibility & control of
implementation of Pricing strategy
Corrective actions it may lead to: Better anticipation / faster reaction to changes in Industry Pricing Dynamics. Better & balanced monitoring & control of performance, faster ability to react Improved ability to manage change & performance improvement over the longer term
The stakes: Strong monitoring of Price Strategy performance & change management at any level – key driver to
Global performance
Region 2 1 2 3 4 5 6
Year-Month 1
Division 5
Strategy Map Mission Vision Strategy Measure Follow up Last Year Plan /TargetTrend / Result
Issues Initiative Responsible
Shared Pricing Methodology
Roll out Level2 Meth.
% target staffed trained
Weekly 58 68 65 Pricing Roadshow J W
optimization of promotions
Weighed Impact measure
Monthly 128 124 126 Test Platform PH
Product/Service innovation
% n+1 sales from New product
Monthly 5,9 6,0 6,0 Design to Value J S
Price/volume planning
Weighed Volume prediction error
Monthly -2,3% -2,5% -3,0%Elasticity study AC
rangeAA
Roll out Level 2 Pricing Toolkit
% Sales covered, new entities
Monthly 88% 96% 90% Toolkit Roll out GT
Discipline in conditions
% discount within Std
Weekly 82% 105% 112%
Pricing Corridor out layers (CA & %) Weekly -1,07% -1,2% -1,17%
Value Selling % usage of DTB Monthly 23% 58% 50% DTB Roll out GT
Sell in Sellout measured
% Key Products CA Monthly 46% 86% 80%
Strongest Brand reinforce Brand premium Quarterly 11,4 14,5 14,9Rebranding e
EuropeComm
Best Distrib. Presence
Distributor SoW & coverage
Monthly 36% 40% 35% Partnerhip Program Channels & PH
Price Point Management
%Sales at Price point (keyprods)
Monthly 34% 36% 39%
Targeted Offers % Wins Weekly 38% 35% 35% Sales call Targeting Sales & LL
Consumer ratingsPerceived Value index advantage
Twice a Year 143 129 145
Customer value satisfaction
# price/ value complaints
Weekly 0,99% 0,99% 0,97%
Best of Class Margin
Margin % Annually 50,7% 53,9% 61,1%Portfolio
rebalancingMktg & LL
Target Share 2012 Weighed share Monthly 21,9% 23,7% 26,8%
Growth Sales Growth Monthly 1,5% 8,6% 8,5%
Shareholder returns high
ROE Quarterly 46,5% 52,8% 54,6%
Cust
omer
How our customers see us, rate our performance & respond to it
Finan
cial
Bottom line impact & evolution of financial performance
Roll out level 2 systems, processes & tools
Test & improve lev3 tools in priority units
Develop distributor partnerships
Development of value based offers & features
Maximize growth whilst maintaining current margin levels
Gradually get Level 3 capability, leveraging current best practices
ACME Corporation - Pricing / Value Balanced Scorecard
Lear
nin
g
Capabilities Development to sustain our ability to change and improve
Pro
cess
business processes Improvement & roll out
North
2008
Access Control
66
Pricing BSC – A key management tool
67
Tool 20: Pricing Diagnostic & Roadmap (Illustrative)
Page 68
What it is: Diagnostic– evaluates current
level of performance vs Best practices on all aspects of Pricing management.
Roadmap : identifies key levers for improvement of pricing performance improvement & provides concrete recommendations & actions plans to follow to get there
What it does: Key tool to support
sustainable performance improvementCorrective actions it may lead to:
Clarifies where we are and where we need to go. Aligns & organizes the company around the required change management effort to achieve
improvement Helps prioritize & organize action for optimal effectiveness
The stakes: Best approach to achievable sustainable’ performance improvement
69
70
71
72
Tool 21: Pricing Proccess RACI (Illustrative)
Page 73
What it is: Defines & organizes
participant roles & responsibilities in all pricing processes.
Defines calendar & organizes to ensure effective collaboration & consensus building
What it does: provide visibility, coordination
& control of all key pricing processes
Corrective actions it may lead to: Improved coordination of stakeholders. Conflict reduction, improved consensus building Improved prioritization / more rational arbitrage between alternative plans
The stakes: Effective management of Pricing & Value across the company
Pricing RACI - Overview
74
Pricing RACI – Country/Process detail
75
Tool 22: Pricing Thought Process (Illustrative)
Page 76
What it is: A ‘qualitative’ process to
support more rational / effective Pricing decision making – when data availability is insufficient.
A tool to capitalize on managers collective expertise to improve decisions & develop consensus
What it does: Provide a strong logical
framework to help focus discussion, rationalize them & facilitate consensus
Corrective actions it may lead to: Better Decision making. Improved consistency across divisions and time Improved consensus Development of Pricing & Value culture
The stakes: Improved Pricing management & consensus
77
78
79
Tool 23: Pricing Alignment
Page 80
What it is: Visualization of positioning &
attractiveness if alternative packages as a function of nt usage
Key ingredient of Pricing coherence management
What it does: provide ability to improve
pricing coherence & better position offers to meet client usage characteristics
Corrective actions it may lead to: Better positioning of packages & prices Identification of Price increase opportunities Stronger sales pitch better fit to needs
The stakes: In segmented markets – with high price visibility, typically results in volume increases improvement of
up to 10 % through better fit of offer to needs
100 200 300 400 500 600 700 80070 100 130 160 190 220 250 28060 85 110 135 160 185 210 23590 90 90 110 130 150 170 190
150 150 150 150 150 150 150 150
0
50
100
150
200
250
300
0 100 200 300 400 500 600 700 800
Variable
Short Trip
Long Trip
Illimité
Category xxx – 1 Day Rental package comparison(as function of Km driven)
81
Window
Shadow
Shade
5-15% 40-65% Key, high visibility offers requiring precision pricing, based on perceived value (if possible) or on detailed, accurate competitive & costing info.
10-30% 15-25% Strongly related to window products in terms of perceived value & purchasing decision margin based pricing driven by window products
55-75% 10-45% incidental, low visibility products with low impact on perceived value or buying decision cost based pricing with high margin
Window - Shadow - Shade
Tool 24: Industry Pricing Dynamics Assessment (Illustrative)
Page 82
What it is: Systematic & regular
assessment of Industry pricing Dynamics.
Criteria used may vary by sector and for Commodities vs specialty
What it does: provide visibility and
anticipation of industry level pricing movements
Corrective actions it may lead to: Better anticipation / faster reaction to changes in Industry Pricing Dynamics. Identification of Price increase opportunities or imminent price threats Improved monitoring of industry level indicators
The stakes: In period of High pricing turbulence (such as now), typically results in bottom line improvement of up to
4 % through better anticipation of price movements
Tool 24: Industry Pricing (Illustrative)
Page 83
Price dynamics assessment
84
Ariston Ariston Ariston
GT Corn GT Corn GT Corn
Channel Concentration 7 2,6 0,0 0 1
Channel Alignment with Example Corp (Loyalty) 10 2,7 0,0 -0,4 2
Customers Profitability & Willingness to Pay 6 2,8 0,1 -0,7 3
Consumers Profitability & Willingness to Pay 5 2,8 0,6 -0 4
Value Index / Cost to use advantage 5 4,6 0,1 0,2 5
Industry Concentration 8 4,0 0,6 0,7 6
Price Followership Likelihood & Reaction Delay 5 3,9 0,0 1,7 7
Price Premium against best Value Competitor 4 5,0 1,2 1,2 8
Competitive Costs Position 7 3,4 -0,1 -0,3 9
Forecasted Costs Evolution 10 3,9 0,7 0,8 10
Communication Leadership 7 4,4 -0,1 0,7 9
Competitive / Media Signalling 10 4,4 -0,1 1,3 10
Free Capacity Relative Position 10 3,8 0,3 3,8 11
Projected Supply / Demand Ratio 6 2,9 0,7 0,2 12
Channel Inventory Level 10 2,9 0,8 0,3 13
110
Projected Market Price EvolutionAriston Ariston
Price Change RecommendationsDirectional increase recommended
10%
Current Period
Score
Current Period
Price Dynamics assessment
6 C's Pricing Drivers
Criteria to Monitor Weighting
Chg vs last period Chg from last Chg
0,02 -0,26
Capacity 2,6
3,6
Customer 2,7
Competitor 4,2
Costs 3,7Communication
Consumer 3,7
4,4
0,293
Score Score
Since Last Period Since Last Price Change
0,715
0,40 0,10
-0,14 1,05
0,42
1,08
0,34
1,56
0,54
0,37
% change proposed
7% 18%
Value Sharing analysis & decision support
85
Statistics & simulation tools
86
Stats & Simulations
Pricing Simulators Portfolio Simulator Network Simulator
D & R Savings Segm. & Clusters Regressions & stats
0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Key Tools Pricing & Value modeling &
simulation Portfolio simulation Network simulation &
optimization Simulation of impact of
alternative Pricing or D&R Segmrentation & clustering
tools Regression & statiistical tools
Analytical & simulation tools to help support Strategic Decision making on Pricing & Value Strategies & implementation
Tool 25: Pricing Simulator (Illustrative)
Page 87
What it is: Systematic & regular
assessment of Industry pricing Dynamics.
Criteria used may vary by sector and for Commodities vs specialty
What it does: provide visibility and
anticipation of industry level pricing movements
Corrective actions it may lead to: Better anticipation / faster reaction to changes in Industry Pricing Dynamics. Identification of Price increase opportunities or imminent price threats Improved monitoring of industry level indicators
The stakes: In period of High pricing turbulence (such as now), typically results in bottom line improvement of up to
4 % through better anticipation of price movements
Pricing Simulator – Single product
88
Pricing Simulator – Competitive dynamics
89
Tool 26: Portfolio Pricing Simulator (Illustrative)
Page 90
What it is: Decision support tools to
simulate / optimize pricing across a porfolio of Products or countries, taking into consideration elasticities, price corridors & potential competition between ranges
What it does: Optimization & coordination of
pricing across the portfolio
Corrective actions it may lead to: Implementation of price corridors. Differentiating offers to better serve different markets / optimoize value capture Targeted Price increases / decreases
The stakes: In period of High pricing turbulence (such as now), typically results in bottom line improvement of up to
4 % through better optimization & coordination of prices
Check / Uncheck AllAccuspray Accuspray barrel
Hyp BSCF/BCF StopperHyp NSCF/NCF StopperHyp TSCF/TCF StopperHypak Comp SCF OtherHyp Bulk Barrel LuerHyp Bulk Barrels NdlHyp Bulk Ndl ShieldHyp Bulk Plast CompsHyp Bulk PRTCHyp Bulk RNSHyp Bulk Stp/Byp StpHyp Bulk Tip CapsHyp SCF Barrel LuerHyp SCF Barrel NdlHyp SCF Barrel Ndl Physiolis
Hypak Plunger Rods Hypak Plunger RodsHypoint Needles Hypoint Needles
Monovial StopperMonovial VialsTS Needle GuardPreventisPreventis OtherRdf Bulk StopperRdf RTS Barrels LuerRdf RTS Barrels NdlRdf RTS StopperRdf SCF Barrel LuerRdf SCF Barrels Ndl
Rdf Components Rdf Comp OthersRdf Olunger Rods Rdf Plunger Rods
Uniject ReservoirSterifill Barrels S-fill SCF Brrl Luer
Sterifill Plungr RodSterifill Stppr
Preventis
Readifill Barrel
Sterifill Components
Product Selection for analysis
Hypak Bulk Barrels
Hypak Componets Bulk
Hypak SCF Barrels
Hypak Components SCF
Monovial
FULL SCREEN
USUAL SCREEN
Go to Product Synthesis
Go to Impact Analysis
Go to Product Hypotheses
Go to Prodiuct Client Detail
Go to ImpactMenu
Go to MainMenu
Run Impact Analysis
Tool 26: Portfolio Pricing Simulator (Illustrative)
Region Scenario constraints
Country Min PTW Max PTWPublic Price PTW Margin %
Est. Share (%)
Profit Index
Revenue Index
### US TRUE CoPay Profit Optimization1 17,00 € 746,67 € 37,03 € 148,10 € 96% 51% 480% 442%
Canada #### No Reimb. Fixed price 5 28,79 € 32,79 € 41,34 € 28,79 € 80% 42% 100% 99%
North America 34,00 € 50,00 € 478% 439%
Germany #### No Reimb. Regional Corridor3 32,00 € 36,00 € 50,95 € 32,00 € 82% 43% 100% 100%
UK #### No Reimb. Regional Corridor3 32,00 € 36,00 € 37,77 € 33,57 € 83% 42% 100% 100%
France #### No Reimb. Regional Corridor3 32,00 € 36,00 € 57,17 € 32,00 € 82% 29% 99% 97%
Italy #### No Reimb. Regional Corridor3 32,00 € 36,00 € 50,56 € 32,00 € 82% 42% 99% 96%
Spain #### No Reimb. Regional Corridor3 32,00 € 36,00 € 55,55 € 35,58 € 84% 31% 96% 96%
Sweden #### No Reimb. Regional Corridor3 32,00 € 36,00 € 44,57 € 36,00 € 84% 45% 87% 92%
Russia #### No Reimb. Profit Optimization1 16,00 € 192,86 € 53,59 € 29,77 € 81% 44% 100% 100%
Europe 32,00 € 36,00 € 99% 98%
Australia #### No Reimb. Profit Optimization1 8,13 € 145,52 € 39,02 € 25,34 € 77% 43% 100% 100%
### Japan #### No Reimb. Profit Optimization1 8,13 € 20,47 € 22,80 € 20,45 € 83% 38% 97% 99%
### Korea #### No Reimb. Profit Optimization1 3,06 € 10,12 € 12,60 € 10,08 € 65% 44% 63% 79%
### China #### No Reimb. Profit Optimization1 8,13 € 53,15 € 22,76 € 13,39 € 74% 39% 100% 100%
APAC 16,25 € 40,00 € 98% 99%
Mexico No Reimb. Profit Optimization1 12,50 € 128,12 € 37,95 € 24,29 € 76% 67% 96% 96%
Brazil #### No Reimb. Profit Optimization1 -2,00 €Latin America 25,00 € 80,00 € 96% 96%
Grand Total 414% 372%
Per product results
Performance achieved in Scenario
Multi-country pricing optimization - modulated by country €)
Reimbursement Scenario
Price Constraints / Objective
Back to Integ
Country Level Pricing Options
Regional Corridor
Profit Optimization
Fixed price
Regional Corridor
Regional Corridor
Regional Corridor
Profit Optimization
Profit Optimization
Profit Optimization
Regional Corridor
Profit Optimization
Profit Optimization
Regional Corridor
Profit Optimization
Profit Optimization
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
OptIm
Recalc Full ScenCorridors
Synthesis
Tool 27: Retail Network Pricing Simulator (Illustrative)
Page 92
What it is: Systematic Daily price
optimization in highly price competitive environments
Can be used to optimize pricing in a network, taking inti consideration local competition & demand
What it does: Simulates / optimizes pricing
based on specific competitive conditions & capitalizing on historically measured elasticities
Corrective actions it may lead to: Improved daily pricing to support overall marketing strategy & objectives Faster reaction / anticipation of competitive moves
The stakes: 1 to 3% improvement in pricing realization… may be key in markets subject to very intense price
competition
Brand Teboil Criteria Weight Constr. (>) Profit ROS % SoC %TypFuel 98E ROS 50% 0,10% Optim. 6 397 € 2,4% 31,9%
Date 04/01/2010 SoC 50% 18,00% Initial 4 509 € 2,3% 28%
Row Labels Nb Comp Prev PrcRev Prev Marg VarCost / LtrGr Profit Min Pr MaxPr PriceGross Profit Station Price
Mod Revenue SoC ROS %
Gross Profit
Aura 3 ##### 6 682 € 388 € 1,542 € 94 € 1,605 € 1,739 € 1,661 € 118 € Aura 1,661 € 5 743 € 46,0% 2,1% 118 €Espoo 6 ##### 37 978 € 2 654 € 1,462 € 1 320 € 1,538 € 1,666 € 1,551 € 1 494 € Espoo 1,551 € 49 623 € 28,5% 3,0% 1 494 €Hämeenkyrö 3 ##### 6 434 € 455 € 1,471 € 147 € 1,540 € 1,668 € 1,579 € 151 € Hämeenkyrö 1,579 € 6 719 € 39,6% 2,2% 151 €Hämeenlinna 6 ##### 2 772 € 271 € 1,465 € -37 € 1,535 € 1,663 € 1,543 € 340 € Hämeenlinna 1,543 € 12 690 € 24,5% 2,7% 340 €Heinola 3 ##### 3 233 € 229 € 1,516 € -22 € 1,569 € 1,700 € 1,602 € 27 € Heinola 1,602 € 5 196 € 30,0% 0,5% 27 €Helsinki 6 ##### 11 852 € 924 € 1,475 € -1 € 1,532 € 1,660 € 1,543 € 723 € Helsinki 1,543 € 37 160 € 21,0% 1,9% 723 €Huittinen 2 ##### 5 972 € 426 € 1,448 € 143 € 1,584 € 1,629 € 1,584 € 144 € Huittinen 1,584 € 4 982 € 51,6% 2,9% 144 €Hyvinkää 3 ##### 11 792 € 767 € 1,412 € 397 € 1,491 € 1,616 € 1,544 € 491 € Hyvinkää 1,544 € 10 063 € 54,2% 4,9% 491 €Ilomantsi 3 ##### 5 897 € 414 € 1,512 € 172 € 1,581 € 1,713 € 1,626 € 170 € Ilomantsi 1,626 € 5 883 € 42,5% 2,9% 170 €Jämsä 2 ##### 5 095 € 330 € 1,509 € 91 € 1,564 € 1,694 € 1,628 € 95 € Jämsä 1,628 € 4 571 € 46,7% 2,1% 95 €Janakkala 4 ##### 6 578 € 548 € 1,478 € 205 € 1,552 € 1,681 € 1,594 € 205 € Janakkala 1,594 € 7 532 € 36,8% 2,7% 205 €Juva 3 ##### 3 472 € 274 € 1,493 € 54 € 1,547 € 1,676 € 1,591 € 91 € Juva 1,591 € 5 045 € 36,8% 1,8% 91 €Kaavi 4 ##### 5 179 € 401 € 1,506 € 101 € 1,579 € 1,710 € 1,612 € 117 € Kaavi 1,612 € 6 316 € 36,2% 1,9% 117 €Kankaanpää 2 ##### 4 914 € 334 € 1,518 € 110 € 1,573 € 1,704 € 1,639 € 113 € Kankaanpää 1,639 € 4 560 € 50,5% 2,5% 113 €Kärsämäki 4 ##### 1 722 € 149 € 1,463 € 75 € 1,535 € 1,663 € 1,545 € 134 € Kärsämäki 1,545 € 3 919 € 25,7% 3,4% 134 €Kauniainen 2 ##### 3 636 € 304 € 1,481 € 91 € 1,538 € 1,666 € 1,592 € 107 € Kauniainen 1,592 € 4 591 € 45,1% 2,3% 107 €Kaustinen 4 ##### 4 202 € 413 € 1,494 € 101 € 1,571 € 1,702 € 1,610 € 124 € Kaustinen 1,610 € 6 056 € 35,3% 2,1% 124 €Kempele 2 ##### 5 526 € 385 € 1,517 € 139 € 1,573 € 1,704 € 1,639 € 144 € Kempele 1,639 € 5 239 € 51,3% 2,7% 144 €Kerimäki 3 ##### 1 678 € 154 € 1,519 € 4 € 1,571 € 1,702 € 1,636 € 29 € Kerimäki 1,636 € 2 495 € 19,6% 1,2% 29 €Kiiminki 2 ##### 1 590 € 286 € 0,546 € 35 € 0,639 € 0,692 € 0,666 € 33 € Kiiminki 0,666 € 1 584 € 44,7% 2,1% 33 €Kokkola 5 ##### 12 538 € 979 € 1,487 € 388 € 1,561 € 1,691 € 1,626 € 307 € Kokkola 1,626 € 10 536 € 17,7% 2,9% 307 €
Brand: Teboil Fuel: 98E - ROS vs Share of Choice, by station (bubble size proportional to revenues)
Station level Data
Optimization PerformanceOptimization Parameters
Aura
Espoo
HämeenkyröHeinola
Helsinki
HuittinenHyvinkää
Jämsä
IlomantsiJanakkala
JuvaKaavi
Kärsämäki
KauniainenKaustinen
Kerimäki
Kiiminki
Kokkola
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0% 10% 20% 30% 40% 50% 60%
Optimize Multi-Stations pricingROS %
SoC %
Quality
Station Level Price Impact
Price Share
Station Level Optimization
Station Level Decision
Station Profile Database
Competitive Pricing DB
Nav
igat
ion
Network Optimization
Network Pricing Simulator – Competitive database
93
Location Brand ServQ LocQ From toEst Margin 2010
Fixed Costs Est Profit 2010
Ähtäri ABC 4 7 1/1/10 ####### 765 446 € 634 141 € 131 306 €
Ähtäri Neste 7 6 1/1/10 ####### 600 348 € 552 411 € 47 937 €
Ahvenanmaa/ÅlandShell 2 4 1/1/10 ####### 523 166 € 513 961 € 9 205 €
Ahvenanmaa/ÅlandSt1 2 5 1/1/10 ####### 604 869 € 527 374 € 77 496 €
Alajärvi Neste 7 6 1/1/10 ####### 580 282 € 551 339 € 28 943 €
Alajärvi Shell 7 5 1/1/10 ####### 556 772 € 511 229 € 45 543 €
Alavus ABC 6 5 1/1/10 ####### 1 156 361 € 1 166 020 € -9 659 €
Aura ABC 6 8 1/1/10 ####### 606 556 € 552 489 € 54 067 €
Aura Shell 5 3 1/1/10 ####### 379 495 € 355 500 € 23 995 €
Aura Teboil 7 8 1/1/10 ####### 698 248 € 665 290 € 32 958 €
Espoo ABC 4 7 1/1/10 ####### 2 802 155 € 2 580 634 € 221 521 €
Espoo Neste 7 4 1/1/10 ####### 2 789 870 € 2 610 026 € 179 844 €
Espoo Shell 2 7 1/1/10 ####### 2 647 168 € 2 150 629 € 496 539 €
Espoo St1 7 8 1/1/10 ####### 5 175 726 € 4 886 357 € 289 370 €
Espoo Teboil 5 5 1/1/10 ####### 3 062 354 € 2 916 488 € 145 866 €
Espoo Ysi5 5 5 1/1/10 ####### 3 246 528 € 3 165 562 € 80 966 €
Eura ABC 6 6 1/1/10 ####### 533 067 € 480 939 € 52 129 €
Eura Neste 7 6 1/1/10 ####### 597 229 € 586 904 € 10 326 €
Forssa ABC 2 6 1/1/10 ####### 565 716 € 533 519 € 32 196 €
Forssa Shell 6 4 1/1/10 ####### 564 044 € 552 906 € 11 138 €
HämeenkyröABC 8 7 1/1/10 ####### 928 792 € 868 337 € 60 454 €
Quality Impact Analysis
Station Level Price Impact
Price Share Trade-Off
Station Level Optimization
Station Level Decision Support
Station Profile Database
Competitive Pricing DB
Navig
ati
on
Sele
ct w
here
you
wan
t to
go
Network Optimization
Network Pricing Simulator – Modeling (1)
94
6262
Brand Teboil
Row Labels Qual Shr ImpactServQ Ind LocQ Ind Qual Shr ImpactServQ LocQ Qual Shr ImpactMod Q Shr Impact SUMMARY OUTPUTAura 5,6% 117% 126% 5,6% 116,7% 126,3% 5,6% 5,4%Espoo -2,7% 100% 83% -2,7% 100,0% 83,3% -2,7% -2,4% Regression StatisticsHämeenkyrö -6,5% 80% 71% -6,5% 80,0% 70,6% -6,5% -6,3% Multiple R 0,992269Hämeenlinna -5,7% 129% 43% -5,7% 128,6% 42,9% -5,7% -5,1% R Square 0,984598Heinola -15,9% 43% 33% -15,9% 42,9% 33,3% -15,9% -15,3% Adjusted R Square0,984027Helsinki -7,4% 71% 71% -7,4% 70,6% 70,6% -7,4% -7,2% Standard Error0,008709Huittinen 6,4% 123% 127% 6,4% 123,1% 127,3% 6,4% 6,1% Observations 57
Hyvinkää 7,0% 111% 141% 7,0% 110,5% 141,2% 7,0% 6,8%Ilomantsi -1,9% 120% 75% -1,9% 120,0% 75,0% -1,9% -1,5% ANOVA
Jämsä -10,7% 40% 67% -10,7% 40,0% 66,7% -10,7% -10,9% df SS MS F Significance FJanakkala 9,0% 108% 171% 9,0% 107,7% 171,4% 9,0% 10,8% Regression 2 0,261807 0,13090368 1725,99507 1,1608E-49Juva -2,3% 117% 60% -2,3% 116,7% 60,0% -2,3% -3,9% Residual 54 0,004095 7,5842E-05Kaavi 2,7% 145% 84% 2,7% 145,5% 84,2% 2,7% 2,4% Total 56 0,265903Kankaanpää -3,3% 108% 67% -3,3% 107,7% 66,7% -3,3% -3,9%
Kärsämäki -7,9% 47% 86% -7,9% 47,1% 85,7% -7,9% -7,5% CoefficientsStandard Error t Stat P-value Lower 95% Upper 95%Kauniainen -3,2% 67% 120% -3,2% 66,7% 120,0% -3,2% -0,7% Intercept -0,24419 0,004335 -56,329908 1,1861E-49 -0,2528846 -0,2355021Kaustinen 7,8% 145% 123% 7,8% 145,5% 123,1% 7,8% 7,9% X Variable 10,103344 0,003434 30,094693 2,0088E-35 0,0964593 0,11022865Kempele -1,5% 100% 92% -1,5% 100,0% 92,3% -1,5% -1,1% X Variable 20,140246 0,003522 39,8241346 1,0348E-41 0,1331856 0,1473065
Kerimäki -5,2% 40% 107% -5,2% 40,0% 107,1% -5,2% -5,3%
Kiiminki -4,8% 40% 100% -4,8% 40,0% 100,0% -4,8% -6,3%
Kokkola -1,5% 109% 86% -1,5% 108,7% 86,2% -1,5% -1,1%
Modeled vs Measured impact of Service & location quality on normalized share (2010, Brand: Teboil ) Regression Results
-20,0%
-15,0%
-10,0%
-5,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
-20,0% -15,0% -10,0% -5,0% 0,0% 5,0% 10,0% 15,0% 20,0%
Start Regression
Full Screen Normal
Quality Impact Analysis
Station Level Price Impact
Price Share Trade-Off
Station Level Optimization
Station Level Decision Support
Station Profile Database
Competitive Pricing DB
Nav
igat
ion
Sele
ct w
here
you
wan
t to
go
Network Optimization
Network Pricing Simulator – Modeling (2)
95
Brand Zone A24 KouvolaTypFuel DI
Row Labels Zone Date Average of Rel Share Average of Rel Price Rel Share Rel Price SUMMARY OUTPUTA24 Kouvola 01/01/2010 64% 100,7% 64% 101%A24 Kouvola 02/01/2010 48% 101,8% 48% 102% Regression StatisticsA24 Kouvola 03/01/2010 58% 101,2% 58% 101% Multiple R 0,977051A24 Kouvola 04/01/2010 52% 101,6% 52% 102% R Square 0,954629A24 Kouvola 05/01/2010 91% 99,6% 91% 100% Adjusted R Square0,954504A24 Kouvola 06/01/2010 88% 99,7% 88% 100% Standard Error0,040874A24 Kouvola 07/01/2010 76% 100,3% 76% 100% Observations 365A24 Kouvola 08/01/2010 51% 101,5% 51% 101%A24 Kouvola 09/01/2010 50% 101,5% 50% 102% ANOVAA24 Kouvola 10/01/2010 87% 99,9% 87% 100% df SS MS F Significance FA24 Kouvola 11/01/2010 68% 100,6% 68% 101% Regression 1 12,76001 12,76001 7637,68 7E-246A24 Kouvola 12/01/2010 81% 99,9% 81% 100% Residual 363 0,606452 0,001671A24 Kouvola 13/01/2010 95% 99,5% 95% 99% Total 364 13,36647A24 Kouvola 14/01/2010 90% 99,7% 90% 100%A24 Kouvola 15/01/2010 75% 100,1% 75% 100% CoefficientsStandard Error t Stat P-value Lower 95%Upper 95%Lower 95,0%Upper 95,0%A24 Kouvola 16/01/2010 56% 101,1% 56% 101% Intercept 24,31444 0,2692 90,32125 7E-251 23,7851 24,8438 23,7851 24,8438A24 Kouvola 17/01/2010 107% 99,2% 107% 99% X Variable 1-23,4824 0,268696 -87,3938 7E-246 -24,0108 -22,954 -24,0108 -22,954A24 Kouvola 18/01/2010 72% 100,4% 72% 100%A24 Kouvola 19/01/2010 61% 100,9% 61% 101%A24 Kouvola 20/01/2010 88% 99,5% 88% 100%
Impact of relative Price position (X) on relative share (Y) (2010, Brand: A24, Station: Kouvola) Regression Results
70%
80%
90%
100%
110%
120%
130%
140%
98% 98% 99% 99% 100% 100% 101% 101% 102% 102% 103%
Start Regression
Full Screen Normal
Quality Impact Analysis
Station Level Price Impact
Price Share Trade-Off
Station Level Optimization
Station Level Decision Support
Station Profile Database
Competitive Pricing DB
Navi
gatio
n
Selec
t whe
re yo
u wan
t to g
o
Network Optimization
Network Pricing Simulator – Decision support
96
Station & Date Optimization Performance
Profit ROS % SoC % Criteria WeightBrand Zone Teboil Punkalaidun Optimized 374 € 1,9% 52,8% ROS 30% > 1,7%
Date 04/01/2010 Initial 356 € 2,2% 42% SoC 70% > 19%
Row Labels Nb Comp Price Mod Revenue Share Index SoC ROS %Gross Profit
95E 2 1,541 € 7 768 € 0,93 46,3% 1,2% 91 € 1,544 € 37,7% -9,1%98E 2 1,532 € 3 966 € 1,06 52,9% 1,7% 67 € 1,565 € 44,6% -8,4%DI 2 1,254 € 8 423 € 1,18 58,8% 2,6% 215 € 1,300 € 52,6% -0,4%Grand Total 2
20 157 € 52,8% 1,9% 374 €
Teboil Punkalaidun - performance by type of fuel
Optimization parameters
Constraints
Optimize Station level pricing
95E98E
DI
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Full Screen Normal
Quality Impact Analysis
Station Level Price Impact
Price Share Trade-Off
Station Level Optimization
Station Profile Database
Competitive Pricing DB
ROS %
SoC %
Nav
igat
ion
Sele
ct w
here
you
wan
t to
go
Network Optimization
Station Level Decision Support
Network Pricing Simulator – Detailed Simulation
97
TRUE TRUE TRUE TRUE TRUE TRUE
Teboil ABC Neste Seo Shell St1 Teboil ABC Neste Seo Shell St1
Serv Q Today 6 3 7 8 2 2 Changes to Serv QLoc Q Today 2 5 8 4 5 4 Changes to Loc QFuel Prices today Changes to Fuel Prices
95E 1,672 € 1,703 € 1,679 € 1,706 € 1,672 € 1,673 € 95E -0,010 €
98E 1,706 € 1,782 € 1,773 € 1,724 € 1,756 € 1,706 € 98E -0,060 €
DI 1,462 € 1,506 € 1,502 € 1,464 € 1,478 € 1,484 € DI
Share of Choice Teboil ABC Neste Seo Shell St1 223 2895E 11,4% 9,0% 32,1% 20,0% 14,5% 13,1% June
98E 16,7% 6,2% 24,6% 27,1% 6,7% 18,8% Hämeenlinna
DI 14,6% 7,8% 26,0% 30,6% 11,9% 9,1%Criteria Weight
Revenues 34 309 € 20 608 € 72 340 € 64 479 € 30 251 € 31 812 € Return on Sales 70% > 1,0%
Margin 2 273 € 1 949 € 6 306 € 4 971 € 2 422 € 2 240 € Share of Choice 30% > 10,0%
Fixed Costs 584 € 1 002 € 2 196 € 1 558 € 889 € 623 €
Profit 766 € 200 €- 821 € 1 027 € 204 € 400 € Profit ROS % SoC %Simulated 766 € 2,2% 13,6%
ROS 2,2% -1,0% 1,1% 1,6% 0,7% 1,3% Initial 375 € 1,5% 11,5%
SoC 13,6% 8,1% 28,5% 26,8% 12,4% 13,9%
Station : Hämeenlinna - Date: 28 June - Price simulation / Optimization
Simulated Performance
Changes (+ or -) from base scenarioCompetitive Scenario Today
Projected Impact on Performance
ConstraintsOptimization parameters _
Location
Month
Hämeenlinna
June
Day 28
Sim
ula
tion P
aram
eter
s
Update
Optimize
Save Prices
Nav
igat
ion
Network Pricing Simulator – Network Optimization
98
Brand Teboil Criteria Weight Constr. (>) Profit ROS % SoC %TypFuel 98E ROS 50% 0,10% Optim. 6 397 € 2,4% 31,9%
Date 04/01/2010 SoC 50% 18,00% Initial 4 509 € 2,3% 28%
Row Labels Nb Comp Prev PrcRev Prev Marg VarCost / LtrGr Profit Min Pr MaxPr PriceGross Profit Station Price
Mod Revenue SoC ROS %
Gross Profit
Aura 3 ##### 6 682 € 388 € 1,542 € 94 € 1,605 € 1,739 € 1,661 € 118 € Aura 1,661 € 5 743 € 46,0% 2,1% 118 €Espoo 6 ##### 37 978 € 2 654 € 1,462 € 1 320 € 1,538 € 1,666 € 1,551 € 1 494 € Espoo 1,551 € 49 623 € 28,5% 3,0% 1 494 €Hämeenkyrö 3 ##### 6 434 € 455 € 1,471 € 147 € 1,540 € 1,668 € 1,579 € 151 € Hämeenkyrö 1,579 € 6 719 € 39,6% 2,2% 151 €Hämeenlinna 6 ##### 2 772 € 271 € 1,465 € -37 € 1,535 € 1,663 € 1,543 € 340 € Hämeenlinna 1,543 € 12 690 € 24,5% 2,7% 340 €Heinola 3 ##### 3 233 € 229 € 1,516 € -22 € 1,569 € 1,700 € 1,602 € 27 € Heinola 1,602 € 5 196 € 30,0% 0,5% 27 €Helsinki 6 ##### 11 852 € 924 € 1,475 € -1 € 1,532 € 1,660 € 1,543 € 723 € Helsinki 1,543 € 37 160 € 21,0% 1,9% 723 €Huittinen 2 ##### 5 972 € 426 € 1,448 € 143 € 1,584 € 1,629 € 1,584 € 144 € Huittinen 1,584 € 4 982 € 51,6% 2,9% 144 €Hyvinkää 3 ##### 11 792 € 767 € 1,412 € 397 € 1,491 € 1,616 € 1,544 € 491 € Hyvinkää 1,544 € 10 063 € 54,2% 4,9% 491 €Ilomantsi 3 ##### 5 897 € 414 € 1,512 € 172 € 1,581 € 1,713 € 1,626 € 170 € Ilomantsi 1,626 € 5 883 € 42,5% 2,9% 170 €Jämsä 2 ##### 5 095 € 330 € 1,509 € 91 € 1,564 € 1,694 € 1,628 € 95 € Jämsä 1,628 € 4 571 € 46,7% 2,1% 95 €Janakkala 4 ##### 6 578 € 548 € 1,478 € 205 € 1,552 € 1,681 € 1,594 € 205 € Janakkala 1,594 € 7 532 € 36,8% 2,7% 205 €Juva 3 ##### 3 472 € 274 € 1,493 € 54 € 1,547 € 1,676 € 1,591 € 91 € Juva 1,591 € 5 045 € 36,8% 1,8% 91 €Kaavi 4 ##### 5 179 € 401 € 1,506 € 101 € 1,579 € 1,710 € 1,612 € 117 € Kaavi 1,612 € 6 316 € 36,2% 1,9% 117 €Kankaanpää 2 ##### 4 914 € 334 € 1,518 € 110 € 1,573 € 1,704 € 1,639 € 113 € Kankaanpää 1,639 € 4 560 € 50,5% 2,5% 113 €Kärsämäki 4 ##### 1 722 € 149 € 1,463 € 75 € 1,535 € 1,663 € 1,545 € 134 € Kärsämäki 1,545 € 3 919 € 25,7% 3,4% 134 €Kauniainen 2 ##### 3 636 € 304 € 1,481 € 91 € 1,538 € 1,666 € 1,592 € 107 € Kauniainen 1,592 € 4 591 € 45,1% 2,3% 107 €Kaustinen 4 ##### 4 202 € 413 € 1,494 € 101 € 1,571 € 1,702 € 1,610 € 124 € Kaustinen 1,610 € 6 056 € 35,3% 2,1% 124 €Kempele 2 ##### 5 526 € 385 € 1,517 € 139 € 1,573 € 1,704 € 1,639 € 144 € Kempele 1,639 € 5 239 € 51,3% 2,7% 144 €Kerimäki 3 ##### 1 678 € 154 € 1,519 € 4 € 1,571 € 1,702 € 1,636 € 29 € Kerimäki 1,636 € 2 495 € 19,6% 1,2% 29 €Kiiminki 2 ##### 1 590 € 286 € 0,546 € 35 € 0,639 € 0,692 € 0,666 € 33 € Kiiminki 0,666 € 1 584 € 44,7% 2,1% 33 €Kokkola 5 ##### 12 538 € 979 € 1,487 € 388 € 1,561 € 1,691 € 1,626 € 307 € Kokkola 1,626 € 10 536 € 17,7% 2,9% 307 €
Brand: Teboil Fuel: 98E - ROS vs Share of Choice, by station (bubble size proportional to revenues)
Station level Data
Optimization PerformanceOptimization Parameters
Aura
Espoo
HämeenkyröHeinola
Helsinki
HuittinenHyvinkää
Jämsä
IlomantsiJanakkala
JuvaKaavi
Kärsämäki
KauniainenKaustinen
Kerimäki
Kiiminki
Kokkola
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
0% 10% 20% 30% 40% 50% 60%
Optimize Multi-Stations pricingROS %
SoC %
Quality
Station Level Price Impact
Price Share
Station Level Optimization
Station Level Decision
Station Profile Database
Competitive Pricing DB
Nav
igat
ion
Network Optimization
Tool 28: D & R Savings model (Illustrative)
Page 99
What it is: Interactive simulation of
potential impact of changes in D&R policies Who is affected? How much? Potential impact on demand & volumes.
Support to sales force in explaining / implementing price changes on their portfolio
What it does: provide visibility and
anticipation of industry level pricing movementsCorrective actions it may lead to:
Better planning / evaluation & selection of D&R changes. Improved & faster implementation Improved fairness
The stakes: 40 to 8 month delay in Implementation 20 to 60% fewer ‘exceptions’
Estimating the impact of new Pricing Policy
Page 100
Evaluating Impact by Customer
101
Max. Disc. & Rebates % 15,0%
Year (All)
Month (All)
Region Name (All)
Industry Name (All)
Acct Mngr Name (All)
Glob SoW Code (All)
Market Name (All)
Market Segment NamePrice Driven
Customer Name (All)
Customer Breath Name(All)
Custo Rev Segment Name(All)
Product Name (All)
Material GrP Name (All)
Product Grp Name (All)
Prod Hier Name (All)
Prod Rev Segment Name(All)
Product Family Name(All) 7 139 205 74 082 396 9,6% 15,0% 6 165 641 8,3%973 564
Disc. and Reb. Savings NOKTotal D&R (Current)
New D&R % G.S.
D&R Applying Max %
Maximum D&R %
D&R % G.S.R. (Current)
Sales Gross Rev.
-10%
0%
10%
20%
30%
40%
50%
60%
70%
-20 0 20 40 60 80 100 120 140 160 180
Disc
ount
s an
d Re
bate
s %
of G
ross
Sal
es
Customers Gross Sales Revenues
Gross Sales Revenues & D&R Actual vs. Limit
Cust. Gross Sales Rev
Pricing
Full Screen
Normal Screen
Tool 29: Segmentation & Clustering
What it is: Segmentation of Clients / Consumers,
based on. Attributes sought Potential & willingness to pay
May be used for a single product or a group of products, globally or by channel.
What it does: Helps define effective Value / Pricing
segmentation Help visualize weights / stakes &
priorities by segment.
Actions it may lead to: Development of targeted offers. Support to targeting by sales force Targeted communication & marketing
The stakes: Varies considerably. Segmentation & adaptation of Value Propositions may often result in double digit
price increases or Volume increases
0
10 000 000
20 000 000
30 000 000
40 000 000
50 000 000
60 000 000
70 000 000
80 000 000
90 000 000
Value Driven
Price Driven
Delivery Driven
Service driven
Speed Driven
Quality driven
1 2 3 4 5 6
Comp2
Comp1
ACME
Segmentation & Clustering – Market research insights
103
Segmentation & Clustering – Behavioral Segmentation
104
Segmentation & Clustering – Behavioral Segmentation
105
Segmentation & Clustering – Behavioral Segmentation
106
Tool 23: Statistics & Regression Tools (Illustrative)
Page 107
What it is: Statistical tools to support in
depth analysis & modeling of Pricing & Value Clustering CBC / Discrete choice Logit Regressions ..
What it does: Enables true insights &
sophisticated modeling
Corrective actions it may lead to: Understanding causalities / Identififying trends Ability to model / predict Continous improvement based on historical data
The stakes: Insights / price response modeling is at the root of Price optimization
Statistical tools to prodide insights on causality
108
Segment (All)SegmentName (All)Region EastAcct Mngr (All)
Pricing
0,50
1,50
0,50 1,00 1,50
Rel
ativ
e P
rice
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
Value Map Seg/RegWeight 56 1 1 10 13 19
Ship Complete
Defects Range Service Shipment Date
Price
Competitors Value Graphs
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Value Graph Segment0
10 000 000
20 000 000
30 000 000
40 000 000
50 000 000
60 000 000
70 000 000
80 000 000
90 000 000
Value Driven
Price Driven
Delivery Driven
Service driven
Speed Driven
Quality driven
1 2 3 4 5 6
Comp2
Comp1
ACME
Segment Share
7 2 9 1 0 87 2 9 1 0 8
3 3 1 1 7 2 73 3 1 1 7 2 7
1 0 0 8 3 9 11 0 0 8 3 9 1
1 1 0 4 1 4 81 1 0 4 1 4 8
9 9 6 9 0 0
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Share of Wallet vs Rating - ACME
SoW vs Ratings
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Share of Wallet vs Rating
SoW vs Rtg Clients
y = 4,0565e0,7579x
R² = 0,1959
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
7,5
8,0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
"Share of Wallet (x) vs Rating (y)" FULL SCREEN
USUAL SCREEN
Performance reporting & monitoring
109
Marketing & Sales support
Reporting Analysis
Traffi c LightsP& L Reports Objectives vs. Realized
Fin . Reports Corridors Exceptions Mngmt
0,50
1,50
0,50 1,00 1,50
Re
lati
ve P
ric
e
Relative Perceived Value
Customer Value Map
ACME
Comp 1
Comp 2
Fair Value Line
ValueDisadvantaged
ValueAdvantaged
Performance Touring Handling AS
PRODUCT LEVEL PRICING TRAFFIC LIGHTS Price Change
Discount Change
Share Growth
% Rel Share vs Ref. Comp
% Premium vs Ref. Comp
Value Positioning
Win / Loss Indicator
Elasticity Measure GM % Fullfilment Overall
Action Required
BRIDGESTONE 97 13% 0 1 8% 9 13% 1,5 61% 94% 0,60024934 59% Y
BRIDGESTONE POTENZA RE92A AS 115 16% 0 1 8% 7 20% 1,5 60% 85% 0,57732634 58%
215/45R18 BW W BRIDGESTONE POTENZA RE92A AS #E440 107 16% 0 1 8% 7 15% 2,0 54% 85% 0,53853075 54%
BRIDGESTONE TURANZA EL400-02 77 12% 0 1 8% 9 8% 1,9 59% 97% 0,59126945 59%
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E402 73 19% 0 1 8% 7 7% 1,9 59% 92% 0,58842208 58% Y
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E329 82 11% 0 1 8% 7 6% 1,2 41% 86% 0,40759921 40%
P215/45R17 BW W BRIDGESTONE TURANZA EL400-02 #G432 103 8% 0 2 8% 7 8% 0,9 53% 85% 0,53514842 52%
BRIDGESTONE TURANZA EL42 109 8% 0 1 8% 9 7% 1,0 59% 87% 0,60924063 60% X
P235/45R17 BW W BRIDGESTONE TURANZA EL42 #C193 117 5% 0 1 8% 9 4% 1,2 58% 98% 0,59778409 60%
P235/50R18 BW V BRIDGESTONE TURANZA EL42 #E445 123 5% 0 1 8% 7 7% 1,6 45% 101% 0,46415437 46% X
P235/60R18 BW H BRIDGESTONE TURANZA EL42 #C010 82 3% 0 1 8% 7 8% 1,6 59% 84% 0,59362246 58%
P245/45R19 BW V BRIDGESTONE TURANZA EL42 #G447 137 1% 0 1 10% 9 6% 1,1 45% 85% 0,45843948 45%
BRIDGESTONE TURANZA EL42 RFT 95 1% 0 1 8% 9 4% 1,7 42% 99% 0,43203873 43%
205/55R16 BW H BRIDGESTONE TURANZA EL42 RFT #7334 94 1% 0 1 8% 8 2% 1,0 37% 101% 0,36211277 36% Y
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E446 119 2% 0 1 8% 9 3% 1,2 40% 85% 0,38266467 38% Y
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #7335 98 3% 0 1 8% 9 1% 1,6 37% 101% 0,37233824 37%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E330 78 5% 0 0 8% 7 1% 2,3 41% 88% 0,40485926 40%
BRIDGESTONE TURANZA ER30 86 6% 0 0 8% 9 1% 3,3 57% 100% 0,56939127 56%
205/45R16 BW W BRIDGESTONE TURANZA ER30 #7271 105 7% 0 0 8% 7 0% 4,9 55% 99% 0,53339714 54%
225/45R17 BW W BRIDGESTONE TURANZA ER30 #7272 118 10% 0 0 8% 7 0% 6,8 58% 101% 0,59676541 59%
225/50R16 BW W BRIDGESTONE TURANZA ER30 #7270 78 6% 0 0 8% 7 0% 4,9 59% 98% 0,60021896 60% X
245/50R18 BW W BRIDGESTONE TURANZA ER30 #7273 99 9% 0 0 8% 8 0% 4,3 39% 91% 0,39917475 40%
255/50R19 BW W BRIDGESTONE TURANZA ER30 #7275 103 7% 0 0 8% 9 0% 2,7 53% 90% 0,51685851 51% Y
255/55R18 BW W BRIDGESTONE TURANZA ER30 #C195 128 8% 0 0 8% 9 0% 3,5 54% 93% 0,53413606 53%
255/55R18XL BW Y BRIDGESTONE TURANZA ER30 #7269 116 7% 0 0 8% 7 0% 5,0 40% 85% 0,40320361 40%
285/45R19 BW W BRIDGESTONE TURANZA ER30 #7274 75 8% 0 0 8% 7 0% 4,2 46% 85% 0,45598798 46%
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
ACME
Comp 1
Comp 2
Full Screen
Normal Screen
Open Scenario Save as
Key Tools Price evolutions Pricing & Value Waterfalls Price dispersion mapping Detailed variance analyses Time series Elasticities / Pricing dynamics
analyses
Reporting tools tools to help monitor, control & manage Pricing & support effective implementation of pricing policies
Tool 31: Flexible P&L Reporting (Illustrative)
Page 110
What it is: Regular reports ensuring
coherence with Finance & enabling insights on impact of pricing on overall financial performance
Ability to zoom or group flexibly by product / segment / regions
What it does: provide visibility accountability
for Pricing performance Provides early warning of
threats & improved visibility for opportunities
Corrective actions it may lead to: Better anticipation / faster reaction to changes. Identification of Price increase opportunities or imminent price threats Improved monitoring & control of performance
The stakes: Improved control & faster reaction
Month (All)Region Code (All)Market Name (All)Industry Name (All)Custo Rev Segment Name (All)Product Family Code (All)Product Grp Code (All)
2007 2008 2009 2010 % Gr (10/09)
Theoretical Revenues 1) 94 832 963 92 711 698 117 583 738 113 518 393 -3,5%Unexplained Discount -2 986 736 -2 790 767 -2 990 030 -2 789 994 -6,7%
Gross Sales 91 846 227 89 920 931 114 593 708 110 728 399 -3,4%
Total Discounts -13 692 016 -12 291 691 -17 870 605 -15 830 026 -11,4%Invoice Revenues 78 154 211 77 629 239 96 723 104 94 898 374 -1,9%
Total Rebates & freebees -10 396 467 -10 114 566 -13 041 436 -12 537 011 -3,9%Net Revenues 67 757 744 67 514 674 83 681 667 82 361 362 -1,6%
COGS -37 778 327 -38 043 193 -45 991 374 -45 737 252 -0,6%Total Client & Mktg costs -21 873 956 -22 296 836 -27 826 188 -28 026 613 0,7%Other Logistical CostsNet Margin -13 768 496 -15 122 192 -17 962 084 -19 429 116 8,2%Net Margin % -15% -17% -16% -18% 11,9%D&R as Pct of Theo Sales 29% 27% 29% 27% -4,8%
Pricing
Full ScreenNormal
Go to Financial
Go to Product
Go to Price
Go to SKU
Go to Product
Go to Customer
Tool 32: Pricing Traffic Lights (Illustrative)
Page 111
What it is: Systematic & regular review
of pricing performance at detailed with indicators / early warning system to identify opportunities & threats & know where management attention should focus.
What it does: Saves management times by
providing key synthetic info & warning systems
Corrective actions it may lead to: Better anticipation / faster reaction to opportunities & tgreats Management attention better focused on real issues Faster &eralier issue resolution
The stakes: Agility & competitive leadership
Performance Touring Handling AS
PRODUCT LEVEL PRICING TRAFFIC LIGHTS Price Change
Discount Change
Share Growth
% Rel Share vs Ref. Comp
% Premium vs Ref. Comp
Value Positioning
Win / Loss Indicator
Elasticity Measure GM % Fullfilment Overall
Action Required
BRIDGESTONE 100 13% 0 1 8% 9 13% 1,5 60% 94% 0,6 60%
BRIDGESTONE POTENZA RE92A AS 115 14% 0 0 8% 9 19% 1,6 58% 101% 0,6 58%
215/45R18 BW W BRIDGESTONE POTENZA RE92A AS #E440 98 21% 0 0 8% 9 22% 1,7 58% 89% 0,6 59%
BRIDGESTONE TURANZA EL400-02 88 27% 0 0 8% 9 33% 1,0 58% 87% 0,6 60%
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E402 69 26% 0 0 8% 9 48% 0,9 45% 85% 0,5 46%
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E329 83 23% 0 0 8% 8 49% 1,3 37% 99% 0,4 38% X
P215/45R17 BW W BRIDGESTONE TURANZA EL400-02 #G432 103 30% 0 0 8% 8 24% 1,9 50% 84% 0,5 51%
BRIDGESTONE TURANZA EL42 98 41% 0 0 8% 7 31% 1,1 58% 99% 0,6 57%
P235/45R17 BW W BRIDGESTONE TURANZA EL42 #C193 115 49% 0 0 8% 9 29% 1,0 60% 102% 0,6 60%
P235/50R18 BW V BRIDGESTONE TURANZA EL42 #E445 125 58% 0 0 8% 7 18% 0,8 60% 84% 0,6 58% Y
P235/60R18 BW H BRIDGESTONE TURANZA EL42 #C010 83 39% 0 0 8% 7 15% 0,9 58% 95% 0,6 59%
P245/45R19 BW V BRIDGESTONE TURANZA EL42 #G447 127 32% 0 0 10% 7 14% 1,0 59% 85% 0,6 60% X
BRIDGESTONE TURANZA EL42 RFT 96 25% 0 0 8% 9 18% 0,9 39% 101% 0,4 38%
205/55R16 BW H BRIDGESTONE TURANZA EL42 RFT #7334 100 21% 0 0 8% 7 10% 0,5 37% 102% 0,4 37%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E446 111 31% 0 0 8% 9 7% 0,4 46% 100% 0,5 47%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #7335 112 42% 0 0 8% 9 7% 0,4 51% 86% 0,5 51%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E330 85 53% 0 0 8% 8 4% 0,4 59% 98% 0,6 58%
BRIDGESTONE TURANZA ER30 84 29% 0 0 8% 7 5% 0,5 59% 83% 0,6 58% Y
205/45R16 BW W BRIDGESTONE TURANZA ER30 #7271 101 26% 0 0 8% 7 6% 0,7 45% 98% 0,5 46%
225/45R17 BW W BRIDGESTONE TURANZA ER30 #7272 121 37% 0 0 8% 8 9% 0,9 43% 102% 0,4 44%
225/50R16 BW W BRIDGESTONE TURANZA ER30 #7270 77 34% 0 0 8% 9 7% 1,1 40% 101% 0,4 39%
245/50R18 BW W BRIDGESTONE TURANZA ER30 #7273 99 42% 0 0 8% 7 10% 1,4 37% 84% 0,4 37%
255/50R19 BW W BRIDGESTONE TURANZA ER30 #7275 107 25% 0 0 8% 8 14% 1,0 47% 93% 0,5 46% Y
255/55R18 BW W BRIDGESTONE TURANZA ER30 #C195 122 20% 0 0 8% 7 18% 1,5 59% 99% 0,6 60%
255/55R18XL BW Y BRIDGESTONE TURANZA ER30 #7269 120 18% 0 0 8% 8 23% 1,1 42% 99% 0,4 43% X
285/45R19 BW W BRIDGESTONE TURANZA ER30 #7274 77 19% 0 0 8% 9 34% 0,8 37% 84% 0,4 37%
BRIDGESTONE TURANZA ER300 88 20% 0 0 8% 7 20% 0,9 39% 100% 0,4 40% X
235/55R17 BW W BRIDGESTONE TURANZA ER300 #F355 126 23% 0 0 8% 9 21% 1,0 58% 102% 0,6 59%
BRIDGESTONE TURANZA ER33 83 13% 0 0 8% 7 16% 1,0 59% 101% 0,6 58% Y
Pricing
Pricing Traffic Lights (Illustrative)
112
Performance Touring Handling AS
PRODUCT LEVEL PRICING TRAFFIC LIGHTS Price Change
Discount Change
Share Growth
% Rel Share vs Ref. Comp
% Premium vs Ref. Comp
Value Positioning
Win / Loss Indicator
Elasticity Measure GM % Fullfilment Overall
Action Required
BRIDGESTONE 100 13% 0 1 8% 9 13% 1,5 60% 94% 0,6 60%
BRIDGESTONE POTENZA RE92A AS 115 14% 0 0 8% 9 19% 1,6 58% 101% 0,6 58%
215/45R18 BW W BRIDGESTONE POTENZA RE92A AS #E440 98 21% 0 0 8% 9 22% 1,7 58% 89% 0,6 59%
BRIDGESTONE TURANZA EL400-02 88 27% 0 0 8% 9 33% 1,0 58% 87% 0,6 60%
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E402 69 26% 0 0 8% 9 48% 0,9 45% 85% 0,5 46%
215/45R17 BW Z BRIDGESTONE TURANZA EL400-02 #E329 83 23% 0 0 8% 8 49% 1,3 37% 99% 0,4 38% X
P215/45R17 BW W BRIDGESTONE TURANZA EL400-02 #G432 103 30% 0 0 8% 8 24% 1,9 50% 84% 0,5 51%
BRIDGESTONE TURANZA EL42 98 41% 0 0 8% 7 31% 1,1 58% 99% 0,6 57%
P235/45R17 BW W BRIDGESTONE TURANZA EL42 #C193 115 49% 0 0 8% 9 29% 1,0 60% 102% 0,6 60%
P235/50R18 BW V BRIDGESTONE TURANZA EL42 #E445 125 58% 0 0 8% 7 18% 0,8 60% 84% 0,6 58% Y
P235/60R18 BW H BRIDGESTONE TURANZA EL42 #C010 83 39% 0 0 8% 7 15% 0,9 58% 95% 0,6 59%
P245/45R19 BW V BRIDGESTONE TURANZA EL42 #G447 127 32% 0 0 10% 7 14% 1,0 59% 85% 0,6 60% X
BRIDGESTONE TURANZA EL42 RFT 96 25% 0 0 8% 9 18% 0,9 39% 101% 0,4 38%
205/55R16 BW H BRIDGESTONE TURANZA EL42 RFT #7334 100 21% 0 0 8% 7 10% 0,5 37% 102% 0,4 37%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E446 111 31% 0 0 8% 9 7% 0,4 46% 100% 0,5 47%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #7335 112 42% 0 0 8% 9 7% 0,4 51% 86% 0,5 51%
225/45R17 BW H BRIDGESTONE TURANZA EL42 RFT #E330 85 53% 0 0 8% 8 4% 0,4 59% 98% 0,6 58%
BRIDGESTONE TURANZA ER30 84 29% 0 0 8% 7 5% 0,5 59% 83% 0,6 58% Y
205/45R16 BW W BRIDGESTONE TURANZA ER30 #7271 101 26% 0 0 8% 7 6% 0,7 45% 98% 0,5 46%
225/45R17 BW W BRIDGESTONE TURANZA ER30 #7272 121 37% 0 0 8% 8 9% 0,9 43% 102% 0,4 44%
225/50R16 BW W BRIDGESTONE TURANZA ER30 #7270 77 34% 0 0 8% 9 7% 1,1 40% 101% 0,4 39%
245/50R18 BW W BRIDGESTONE TURANZA ER30 #7273 99 42% 0 0 8% 7 10% 1,4 37% 84% 0,4 37%
255/50R19 BW W BRIDGESTONE TURANZA ER30 #7275 107 25% 0 0 8% 8 14% 1,0 47% 93% 0,5 46% Y
255/55R18 BW W BRIDGESTONE TURANZA ER30 #C195 122 20% 0 0 8% 7 18% 1,5 59% 99% 0,6 60%
255/55R18XL BW Y BRIDGESTONE TURANZA ER30 #7269 120 18% 0 0 8% 8 23% 1,1 42% 99% 0,4 43% X
285/45R19 BW W BRIDGESTONE TURANZA ER30 #7274 77 19% 0 0 8% 9 34% 0,8 37% 84% 0,4 37%
BRIDGESTONE TURANZA ER300 88 20% 0 0 8% 7 20% 0,9 39% 100% 0,4 40% X
235/55R17 BW W BRIDGESTONE TURANZA ER300 #F355 126 23% 0 0 8% 9 21% 1,0 58% 102% 0,6 59%
BRIDGESTONE TURANZA ER33 83 13% 0 0 8% 7 16% 1,0 59% 101% 0,6 58% Y
Pricing
Tool 33: Pricing Objectives vs Realized(Illustrative)
Page 113
What it is: Detailed monitoring & control
of performance vs objectives Earlier identification &
resolution of potential issues / slippages
What it does: provide visibility and
anticipation of evolving performance & possible corrective actions required
Corrective actions it may lead to: Better anticipation / faster reaction to changes in performance Performance measurement & incentives management
The stakes: Key to achieving level 2 of performance More proactive management of performance
(All) Objective vs. Realized Top Invoice Sales Objectives Year (All)
Cust. Name Cust. Number Objective Realized1692 521650 0 1448641968 555379 0 1368221695 506527 0 1176991974 526000 0 1095701727 555376 0 980461946 521607 0 970071946 521607 0 970072076 553933 21000 1095931819 520119 0 857371995 500730 0 854961700 521606 0 831582007 523324 0 761901711 555377 0 707652160 506610 0 665311968 506711 0 657091968 506711 0 657091916 507987 0 629941700 520133 23000 831582009 525928 30000 880301830 521633 0 567271960 525894 0 545481670 521651 0 537911671 520134 0 532401726 523335 0 523662047 520136 0 51722
Year 2008Acct Mgr (All)Region (All)Segt (All)Size Seg (All)
-20 000
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
-20 000 0 20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000
Objective vs. Realized Performance Rebate by Customer
Realized (RUB)
Obje
ctive
s (R
UB)
Under Objective
Over Objective
Full ScreenNormal Pricing
Tool 34: Financial Performance reporting (Illustrative)
Page 114
Month (All)Region Code (All)Market Name (All)Industry Name (All)Custo Rev Segment Name (All)Product Family Code (All)Product Grp Code (All)Prod Rev Segment Name (All)
Column Labels 2009
Row Labels Product Family Name VolAvg Price 2008
Avg Price 2009 Rev 2009 Prod Hier Vol Gr Pr Gr
Apparent elast
Ac1 Access Control 15 852 34,15 34,31 542 959 Access Control 0% 0% 0,37Ac2 Access Control 15 563 59,34 59,18 945 212 Access Control 3% 0% 9,70Ac2 Supplies 10 66,24 SuppliesAc3 Access Control 15 425 83,30 82,10 1 253 386 Access Control -1% -1% -0,72Ac4 Access Control 7 005 91,72 92,00 578 539 Access Control -10% 0% 32,75Ac5 Access Control 1 518 13,17 13,14 15 395 Access Control -23% 0% -109,76Ac6 Access Control 1 430 15,78 15,75 23 648 Access Control 5% 0% 24,92Ac7 Access Control 1 337 18,37 18,42 23 146 Access Control -6% 0% 22,33Ac8 Access Control 1 371 21,00 20,96 32 079 Access Control 12% 0% 64,50Ac9 Access Control 1 573 23,68 23,65 34 561 Access Control -7% 0% -47,18Ba1 Barriers 144 443 3,60 3,68 517 506 Barriers -3% 2% 1,25Ba2 Barriers 145 489 6,05 6,12 879 665 Barriers -1% 1% 1,11Ba2 Security / Protection 171 7,16 Security / ProtectionBa3 Barriers 147 459 8,59 8,65 1 286 061 Barriers 1% 1% -1,28Ba4 Barriers 71 809 9,37 9,09 636 824 Barriers -2% -3% -0,80Ba5 Barriers 13 461 1,36 1,36 17 778 Barriers -3% 0% 19,89Ba6 Barriers 14 118 1,63 1,63 18 333 Barriers -21% 1% 38,38Ba7 Barriers 13 616 1,90 1,90 24 984 Barriers -4% 0% 24,57Ba8 Barriers 13 341 2,18 2,17 32 928 Barriers 14% 0% 35,46Ba9 Barriers 11 783 2,44 2,44 32 647 Barriers 14% 0% 57,90Co1 Consulting / Advice 564 4359,80 4282,87 2 428 385 Consulting / Advice 1% -2% 0,30Co2 Consulting / Advice 595 7624,84 7302,13 4 556 528 Consulting / Advice 5% -4% 1,15
Co3 Consulting / Advice 597 10555,82 10586,90 6 235 685 Consulting / Advice -1% 0% 4,55-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
-60% -40% -20% 0% 20% 40%
Price change (y) vs Volume Change (x) (2008-2009 - by Product )
Pricing
Full ScreenNormal Screen
Go to Financial Pivot
Go to Product Pivot
Go to Price Evolution
Go to SKU Elasticity
Go to Product Elasticity
Go to Customer Elasticity
Go to Financial Pivot
Go to Product Pivot
Go to Price Evolution
Go to SKU Elasticity
Go to Product Elasticity
Go to Customer Elasticity
What it is: Detailed monitoring & control
of financial performance & impact of price changes
Earlier identification & resolution of potential issues / slippages
What it does: provide visibility and
anticipation of impact of policy changes & possible corrective actions required
Corrective actions it may lead to: Better monitoring / faster feedback to impact of new policies Improved planning & faster readjustments when required
The stakes: Key to achieving level 2 of performance More proactive management of performance
Tool 35: Pricing Corridors Management (Illustrative)
Page 115
European Price Corridor Market AA (€/Litre)
Prod A
Prod BProd C
Prod DProd E
Prod F Prod GProd H
Prod I
Prod J
Prod A
Prod B Prod C
Prod DProd E
Prod F Prod G Prod H
Prod I
Prod J
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
0 2 4 6 8 10 12
Product Range
Sel
l-In
Pri
ce Haut corridor
Prix Mini Validés 2007
What it is: Implementation of maximum
price differences to ensure pricing coherence across neighboring countries of client segments
Prevention of parallel trade
What it does: provide visibility to relative
price levels to ensure coherence & avoid risk of disruption to distribution channels
Corrective actions it may lead to: Better coherence / fairness of pricingFacilitates channel management
The stakes: Key to achieving level 2 of performance More proactive management of performance
Tool 36: Pricing Exceptions Management (Illustrative)
Page 116
What it is: Detailed monitoring & control
of ‘pricing exceptions’ granted & of the fair process of exceptions management
Improves pricing fairness & coherence
Saves time in management of exceptions
What it does: provide visibility and
accountability for exceptions é ensures that they are used effectively
Corrective actions it may lead to: Better / fairer / more effective management of prices & client conditions Performance measurement & incentives management
The stakes: Key to achieving level 2 of performance More proactive management of performance
Revenue Management Tools
117
PriValEdge Revenue Management Process Map
Page 118
• Develop reservations scripts and protocols
• Plan long-term park/ hotel development
• Select key TO partners• Determine oversale cost
• Develop macro-economic forecasts of demand
• Define market positioning and overall pricing policy
• Create global advertising plan
• Analyse & define strategic market segments
• Define and analyse customer segments
• Track costs by segment
• Revise reservation agent scripts and up-sell/cross-sell approaches
• Negotiate TO and other dedicated allocations
• Arrange for transport. capacity
• Revise and maintain forecasting models and parameters
• Develop initial time-series forecasts
• Create seasonal pricing calendars by country
• Define price tiers• Determine segment
“strategic values”
• Negotiate group and convention sales
• Monitor TO realization• Determine individual
availabilities
• Project impact of promotions
• Track booking/cancellation curves
• Adjust forecasts
• Establish targeted promotional pricing programs
• Sell/Up-sell/Cross-sell• Monitor conversion rate
• Determine individual availabilities
• Proactively manage overbooking
• Walk-in response
• Revise reservation agent scripts
• Sell/Up-sell/Cross-sell• Monitor conversion rate
• Track booking/cancellation curves
• Adjust forecasts
Strategic Tactical Operational Real-time
MarketSegmentation
DemandForecasting
OfferManagement
Capacity / Availability
Management
Booking Mmgmt
PriValEdge Revenue Management Tools & DSS
• Develop reservations scripts and protocols
• Plan long-term park/ hotel development
• Select key TO partners• Determine oversale cost
• Develop macro-economic forecasts of demand
• Define market positioning and overall pricing policy
• Create global advertising plan
• Analyze & define strategic market segments
• Track costs by segment
• Revise reservation agent scripts and up-sell/cross-sell approaches
• Negotiate TO and other dedicated allocations
• Arrange for transport. capacity
• Revise and maintain forecasting models and parameters
• Develop initial time-series forecasts
• Create seasonal pricing calendars by country
• Define price tiers• Determine segment
“strategic values”
• Negotiate group and convention sales
• Monitor TO realization• Determine individual
availabilities
• Project impact of promotions
• Track booking/cancellation curves
• Adjust forecasts
• Establish targeted promotional pricing programs
• Sell/Up-sell/Cross-sell• Monitor conversion rate
• Determine individual availabilities
• Proactively manage overbooking
• Walk-in response
• Revise reservation agent scripts
• Sell/Up-sell/Cross-sell• Monitor conversion rate
• Track booking/cancellation curves
• Adjust forecasts
Strategic Value AuditTool
Up-sell /Cross-sell
Scripting Tools
TO Allocation
Tool
Price Elasticity Model
Group/Conv.Acceptance
Tool
Forecasting System
AvailabilityOptimizer
Strategic Tactical Operational Real-time
MarketSegmentation
DemandForecasting
OfferManagement
CapacityManagement
Booking Mngmt
Page 120
Page 121
Page 122
Page 123
Page 124
Page 125
Page 126
Page 127