PriceGain keeps profits flowing for European brewery. PriceGain helped this client maintain market share and increase profits in a key segment.
Situation: Price wars resulted in lower sales and profit losses.
Our client was facing tough competition in one segment of its beer market in its home country. Price wars led to price erosion and losses in both volume and profitability. Our client felt that further price reductions were needed. The question was, by how much?
Solution: Prices adjusted according to customers willingness to pay.
PriceGain established the true relationship between price and demand for all major brands in the market segment including the competition. Using this information, prices of all client products were optimized simultaneously to reach maximum profit levels while maintaining minimum market share constraints.
Result: 21% profit increase and pricing model for future use.
The study indicated that some product prices should be raised and others lowered. Upon implementing the recommendations, our client realized a gross profit increase in this segment of 21% while sustaining its market share. Since that time, this model has also been used with great success in future pricing decisions.