TCG Areas of Expertise:

Across industries, Pricing & Promotion optimization can be one of the most powerful levers for driving profitable growth. Even within seemingly commoditized categories, we have consistently identified numerous opportunities to increase pricing power. Too many companies leave money on the table by failing to fully align their Pricing & Promotion strategies to underlying customer demand.

The Cambridge Group helps clients drive profitable growth by ensuring that their business models, pricing approaches and promotion strategies are aligned to customer demand with unmatched precision. This enables clients to capitalize on significant variation in customer demand and willingness to pay across markets, channels, seasons, product segments and attributes.

Questions We Answer:

  • What are the market, customer and competitive dynamics that should shape pricing decisions?
  • How much would a change in price affect sales volume?
  • How should we tailor our pricing strategy by distribution channel to maximize profitability?
  • How can we modify our portfolio mix and pricing architecture to reduce cannibalization and expand margins?
  • How much are customers willing to pay for specific product features or claims?
  • How can we expand margin by deemphasizing product features that are overly costly relative to customer willingness to pay?
  • How can we expand margin by placing greater emphasis on features for which customer willingness to pay exceeds cost to deliver?
  • How can we adjust our promotion strategies and tactics to enhance margin without jeopardizing revenue/volume targets?

Pricing Strategy

We help our clients elevate their pricing power and enhance margins by aligning pricing strategy to underlying customer demand with an unmatched degree of precision. We synthesize purchase data with primary research to quantify how customer willingness to pay varies across relevant dimensions (e.g. brand, size, feature/attribute, and channel). Our robust fact base helps us uncover opportunities to improve profitability by tailoring pricing to distribution channel, optimizing the portfolio pricing architecture and increasing emphasis on the specific product features and attributes associated with significantly higher customer willingness to pay relative to cost of delivery.

Promotion Effectiveness

Customer promotions and trade spend are critical strategic levers for many of our clients, but promotional activity can be extremely costly and challenging to manage. Our clients are increasingly demanding greater accountability and returns on investment from their promotional expenditures, while seeking an overarching framework and playbook to guide decisions on an ongoing basis.

We help our clients maximize their return on investment by identifying the promotion vehicles and tactics (e.g., promotion depth, frequency, duration) that are most effective in accomplishing strategic and financial objectives. We also work closely with clients to embed best practices and tools within the organization to enable sustained high performance over the long term.