How This Workflow Works
This workflow analyzes historical sales and product data, integrates competitor pricing, and applies both value-based and regression-based pricing strategies. The aim is to identify optimal prices that can increase overall turnover for an e-commerce business.
Key Features:
- Identify key drivers of product performance and sales
- Integrate competitor pricing to assess market positioning
- Apply value-based and regression-based pricing strategies to optimize prices
- Compare and visualize the impact of different pricing approaches on turnover
Step-by-step:
1. Analyze Product Performance and Market Position:
The workflow aggregates sales and product data to identify which factors drive turnover and sales development. It incorporates competitor pricing to evaluate how each product is positioned in the market, assigning scores for sales trends, competitive pressure, and product value.
2. Apply Value-Based Pricing Strategy:
Using the performance scores and competitive analysis, the workflow calculates recommended price adjustments for each product. It assigns new prices based on the perceived value and market context, aiming to improve turnover while maintaining competitiveness.
3. Build and Apply Regression-Based Pricing Model:
As an automated method, the workflow trains a linear regression model using historical sales data and selected features to predict optimal prices. It applies this model to generate alternative price recommendations, focusing on minimizing prediction error and maximizing expected turnover.
4. Compare and Visualize Pricing Outcomes:
The workflow calculates and compares the turnover and contribution margin resulting from both pricing strategies. It presents these results through visualizations, allowing users to assess which approach yields better financial outcomes and to communicate insights effectively.