How Price Sensitivity Impacts Your Business
Author: Kyle Rish
Data is more important than ever, so to maintain a competitive edge, companies are looking for innovative ways to leverage information. In the food and beverage industry, price and seasonality are key drivers in volume and revenue, but insight into pricing sensitivity and demand impact can be limited due to capabilities, disconnected platforms, and insufficient historical data and analytics. As prices fluctuate, it’s imperative to consider the effects on your supply chain, as pricing variability can affect your bottom line as well as operations. A strong connected planning platform can help you maintain visibility into the downstream impact by providing real time analysis of your data.
There are three core areas where having a connected planning platform like Anaplan benefits a seasonal or price-driven business:
1. Strategic Trade Spend and Account Planning
Allocating an annual trade spend budget is time-consuming, especially when analysis is done manually. Leveraging a platform like Anaplan, you can let the system do the heavy lifting. Based on your data and goals Anaplan can recommend the best placement for trade spend and track campaign spend. The system provides real time updates on where the trade spend is compared to the overall budget. When Account Managers submit campaign requests, Anaplan can forecast out based on time and discounted price, allowing approval or denial of campaigns in real time. Create the building blocks for the greatest ROI while saving your team time and effort. Win/Win.
2. Effective Supply Chain Planning
When analyzing pricing discounts, the downstream effect can get lost in the decision-making process, but when price is a major factor in driving a company’s volume, it’s vital to understand the influence of price fluctuations on supply chain. A connected planning platform gives decision makers this visibility and, conversely, provides the operations team real time visibility into campaign results. With the ability to anticipate shortages in inventory, capacity, transportation etc. earlier, your team has more time to remedy and support the changes, becoming more proactive.
3. “What-If” Scenario Planning
But finances are only one component of your business. You need analysis of the financial results of a campaign as well as insight into the effects on the business operationally. Having a platform with strong scenario planning capabilities allows decision makers to execute more strategic product discounts and support promotions from an inventory standpoint.
The only constant in business is change. Now more than ever, time and visibility are key in effective decision-making. Leveraging a connected planning platform like Anaplan not only significantly reduces the length of these processes but allows you to make better decisions, bettering your business.