Balance Mix

Mix Management Pricing Strategies

Mix management is the process to drive customers’ decisions to encourage them to stay longer, purchase higher transaction sizes and buy more profitable offers.

Mix Drivers

1.      Targeted Pricing: Identify and adjust price gaps between tiers/groups of offers
2.      Innovation: New offerings based on whitespace in the portfolio
3.      Pack Price: Capture increased market share by reshaping the product or services packages offered
4.      Capacity Management: Managing what offers are presented to each customer segment

Often companies solely focus on price increases as the only way to drive revenue. This is short-sighted as it fails to leverage all your revenue management tools. Mix Management allows you to shift product/service volume to drive incremental revenue and profit sustainably.

Impact of Mix Drivers

Change in volume weight (%) of Item with Portfolio
Net Price of Item relative to Portfolio
Above
Below
Declining
Growing

Negative mix effect

(Ex. Very high net price SKU loses Brand Volume)

Favorable mix effect

(Ex. Ultra Premium Brand gains share of Mix; Profitable Channel gains share of Volume)

Negative mix effect

(Ex. Value (low price) Brands losing share of Volume)

Favorable mix
effect

(Ex. Low net price customer gains share of Volume)

Mix drivers shown above can be visualized as follows (customized to your business’s KPIs)

Revenue Management Labs helps your company balance portfolio mix by optimizing price, innovations, pack price, and capacity management to unlock revenue uplift opportunities. Our revenue management capabilities allow us to understand the influence of mix drivers across your company portfolio, ensuring that the offerings are positioned to maximize profits and retain/acquire customers.

Insights

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Recessions are inevitable and difficult diagnose, let alone predict. It’s best to prepare for a recession when you are not in the midst of it. We provide a guide to how to prepare your pricing strategy for a recession.

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