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Large-Scale Price Optimization

YEAR

2022

CATEGORY

Management

Pricing Challenges

The commercial division of the company faced difficulties in adjusting prices across over 20,000 SKUs. This complexity often led to contract losses due to price discrepancies with competitors, or inability to align prices with value delivery. Additionally, the logistics price surge due to the container crisis exacerbated these challenges. The urgent need for dynamic pricing adjustments aligned with market values and customer expectations became clear to prevent contract losses and competitive disadvantages.

Key commercial team needs included:

  • Individually and dynamically setting prices considering the technical characteristics of each product, customer profiles worldwide, sales regions, and forex rates.
  • Providing comparative information on potential products to increase net revenue.
  • Supplying historical average prices and the Volume Weighted Average Price (VWAP) of products.
  • Providing an efficient tool for sales negotiation to maximize profit margins.

Strategic Solution by Dojo

Using the CRISP-DM methodology and AI technology, Dojo crafted a robust solution that automates dynamic pricing. The project involved integrating multiple data sources to ensure data quality and accuracy through an automated process that analyzes both historical and current data adjusted for variables such as exchange rates and regional characteristics.

Key aspects of the solution included:

  • Developing an AI-driven product pricing model applicable across all markets, with capabilities for local analysis.
  • Enhancing the analysis with technical details of hybrid products and comprehensive customer data to tailor pricing strategies to specific operational areas.
  • Monitoring average ticket size developments to prevent market disruptions.
  • Aiming to consistently maximize net revenue across numerous scenarios comfortably.

Transformative Impact

01

Pricing Strategy

The implemented solution enabled the company to adopt a data-driven pricing strategy, resulting in quicker and more accurate price adjustments.

02

Analytical Capacity

Enhanced analytical capabilities provided a predictive view of market trends, leading to strategic decisions that significantly improved profit margins and market competitiveness. 

03

Revenue Growth

The implementation led to up to a 4% increase in revenue, validating the effectiveness of the AI solution in overcoming pricing challenges.

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