Price Elasticity Modeling to Support Pricing Decisions

Success Story #

8

Consumer Packaged Goods

Supply chain & Manufacturing

Marketing

Finance & IT

Product development

Business Problem
A beverage marketer faced marginpressure due to tax-driven price increases and lacked a clear understanding ofcustomer price elasticity and substitution effects across brands.

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Actions Taken

· Built price elasticity models usingregression-based methods.

· Incorporated market mix variables,including media spend.

· Accounted for brand substitution effectswithin the product portfolio.

· Delivered analytical outputs via dashboardsto evaluate pricing scenarios.

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Outcomes Achieved

· Enabled evaluation of 5–10% price increasescenarios.

· Improved understanding of customer pricesensitivity across brands.

· Supported revenue optimization decisionsacross the brand portfolio.

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