Price and Promotion Optimization

AMP2 delivers optimization profits today and is fully integrated with the everyday pricing and promotional management solution resolving conflicts and constraints within a single system/process. The AMP2 optimization module enables you to maximize the overall profit, margin or contribution of a portfolio of products. Unlike other optimization modules we can optimize regular and promotional prices, separately or concurrently, taking the effects of each other into account.

Business Rationale.

Retailers are able to define and enforce their regular and promotional pricing strategies by creating pricing rules. AMP2 Price Optimization uses those rules and constraints with advanced mathematics to analyze consumer demand. It calculates the elasticity of each item identifying cannibalizations, halo effects, seasonality and trends as well as cross category impacts and finds the optimal regular and promotional prices to meet the goals and objectives of the scenario requested. The AMP2 optimizer obeys and supports the price positioning of the format whilst seeking to improve sales, volumes and profits in each area of the business for categories within markets and the format overall. AMP2 reacts automatically to competitors and customers changing their behaviour whilst continuing to maximize your stated financial objectives

AMP2 Optimization uses smart science and advanced mathematics to work through millions of calculations to determine the optimum solution for a set of prices and promotions. The retailer is now able to enhance that power to benefit his business and obtain improved sales and profits from using these techniques. AMP2 uses non-linear algorithms with dynamic models that contain both regular and promotional prices in the same model. This is brought about by an essential advance in modeling and optimization programming to fully gain the benefits of optimization in your business. Why accept less when you can have more? Ask us to explain. Like dynamic models, this advance is crucial to the understanding of this subject and the application of the science to real life retail.

AMP2 brings the application of science to the benefit of your bottom line – more sales – more profits – improved margins.

Module Capabilities

Price managers today operate pricing strategies with many conflicting rules and spend considerable manual effort in keeping prices in compliance. The AMP2 optimization solution allows an extensive set of parameters to ensure compliance with the desired pricing strategies:-

• Dynamic models
• Non-linear mathematics
• Constraints management
• Business parameters –
  • Competition/size/brand rules,
  • Category price index,
  • Regular price-setting boundaries,
  • Promotional price-setting boundaries,
  • “do not optimize” regular price locks
  • “do not optimize promotional price locks
  • Max price changes,
  • Psychological rounding
• Set goals for optimization- sales, units, profit and margin ranges
• Optimization of either regular or promotional prices, or regular and promotional prices
• Review and adjust optimized results
• Integrated with pricing and promotion modules
• Price extract for POS transmission
  

Profit Improvement Potential for Optimization – 15% to 25%