A leading CPG client was looking to improve its margins by appropriately pricing its products or changing pack sizes for individual SKUs.
Merilytics partnered with the client to develop econometric models for identifying the key competitors and estimating the optimal price point and pack size for its products that can maximize profits.
Merilytics leveraged third-party syndicated data at SKU level, and applied regression techniques to understand the relationship between pricing, pack sizes and sales volumes. We estimated measures of self and cross elasticities and set up optimization engines to identify the optimal price points and pack sizes at a SKU level. These models were set up to enable regular tracking of products and prices in the market, and identify opportunities for price changes.
Our dynamic pricing solutions enabled the client to make the appropriate pricing and pack size decisions for their products and generate incremental annual profit of $5M.