Price and Promotion Optimization

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

Business Rationale.

Retailers are able to define and enforce their regular and promotional price strategies by creating price 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. AMP2 price optimization obeys and supports the price positioning of the format whilst seeking to improve sales, volume and profit in each area of the business for categories within markets and the format overall. AMP2 price optimization reacts automatically to competitors and customers changing their behavior whilst continuing to maximize your stated financial objectives

AMP2 price 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 benefit his business and obtain improved sales and profits from using these techniques. AMP2 price optimization 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 gain the benefits of full revenue 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 price optimization 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 revenue management modules
• Price extract for POS transmission
  

Profit Improvement Potential for Optimization – 15% to 25%