Price points are critical for ingredient suppliers, particularly when coordinating customers and operations on a global scale. A Fortune 500 global supplier of food and beverage ingredients sought to standardize its price negotiation methods while gaining clarity on the factors that positively and negatively impact prices. The company also needed a system to calculate price and volume recommendations for each product and codify the impact of multiple variables (account relationships, capacity constraints, competitive pressure, and product differentiation) to generate what-if scenarios and recommend new prices.
Wipro collaborated with the company’s sales account managers (SAMs) to identify opportunities to standardize processes and alleviate pain points. By leveraging AI, the company could consider each account’s subjective relationship parameters (relationship quality, product availability, competitive pressures, etc.) to equip SAMs with a data-powered pricing engine that would provide price recommendations for contract negotiations.
The solution combined these insights with historic data pertaining to volumes sold, net sales, gross profit, and ship-to and sold-to-customer values for each SAM + account + product combination for the previous three years. This data-driven approach resulted in price and volume recommendations that were appropriate for each account and ensured impartial treatment for customers worldwide.
This analytics-based price elasticity solution generated price and volume recommendations for FY 2021 contracts and enabled SAMs to introduce products to 11 new accounts. It also provided actionable insights on account relationships and competition, helping the food-ingredient supplier increase product customization and grow its profit margins. And, by capturing new analytics, the company gained a unified view of each customer across markets, empowering the company to develop a consistent pricing strategy.