Apply strategies
  • 20 Dec 2023
  • 3 Minutes to read
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Apply strategies

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Article summary

Price IQ supports the creation of high-level pricing strategies that help you achieve the best possible outcomes across various slices of your business. These strategies can include maximizing profit, controlling price spreads, or other performance-related metrics.

When setting up Price IQ with your Zilliant representative, you define your business goals and needs. The configuration team then creates multiple pricing strategies tailored to those goals. After that, you can adjust strategy values to optimize your prices accordingly.

In this topic, learn about:

Strategies

A pricing strategy is a collection of parameters that help you achieve the most favorable results to satisfy a specific business need. Such strategies can be implemented as a formula, or as input to a mathematical solver.

You can define multiple strategies tailored to specific goals or slices of your business. By using scenarios, you can apply these strategies to your products and customers, experiment with different strategy values, compare them, and select the optimal results.

The following table highlights common pricing strategies.

StrategyDescription
Profit / RevenueIncrease or decrease prices to achieve your stated financial objective. This strategy uses a price elasticity model to predict the volume impact of a price change.
Minimum MarginSpecify a lower bound limit for a price needed to achieve a margin level.
Customer Spend SpreadSpecify a minimum or maximum price spread between customers of different sizes. For example, you might specify that large customers receive a minimum 10% discount compared to small customers.
Good / Better / BestSpecify the minimum or maximum price spreads between similar products.
Example

You use the Profit / Revenue strategy to set your overall goal. For example, you may want to maximize profit in the majority of your business while focusing on revenue for a specific product category. With that set, you can use the Customer Spend Spread to ensure that your most valuable customers receive better pricing than lower-value customers.

Manage strategies

To start working with strategies, open a scenario. Each strategy is represented on a separate worksheet in your scenario workbook. The following image shows an example of a strategy worksheet:

Strategy worksheet in PIQ scenario

Each strategy worksheet consists of multiple strategy lines. A strategy line is a combination of specific strategy values you want to apply to a particular business segment. A strategy line includes the following elements:

  • Scope—Collection of drop-down and type-ahead columns that define the business segment the strategy line applies to. For example, you can select a product group, region, or customer to apply your strategy line to. On the image above, the Prod Lvl 1 and Prod Lvl 2 columns are scopes.
  • Parameters—Values to be set by the strategy line. For example, you can specify the minimal product price the optimization solver can generate, or the minimal profit margin you want to secure for a specific product group. On the image above, the Min Margin column is a parameter.
  • Priority—Priority order of the strategy line when there are overlapping scopes. A strategy line with a lower priority number takes precedence over lines with a higher number.
    Example

    You want to attain a minimum margin of 25% for all products you sell across the European region. However, there's a specific product within the same European region for which you aim to secure a minimum margin of 30%. To accomplish this, assign a higher priority to the strategy line with the 30% margin and a lower priority to the strategy line with the 25% margin.

Add a strategy line

  1. From the Price IQ Manager Dashboard, expand the Scenarios folder.
  2. Select a scenario name to go to its workbook.
  3. On the strategy worksheet, select Insert Row.
  4. Select or enter scope, parameter, and priority information for the strategy line.
  5. Select Save.

Delete a strategy line

To delete one or more strategy lines, highlight them on the worksheet, and then select Delete Row.


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