Subject: Marketing Analytics and
Data Analysis
Module Number: Module No. 2
Module Name: Price and Promotion Analytics
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Subject (Marketing Analytics and Data Analysis)
Syllabus
Module 1
Introduction
Module 2
Price and Promotion Analytics
Module 3
Marketing Mix Analytics
Module 4
Customer Analytics
Module 5
Data Analysis
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Subject (Marketing Analytics and Data Analysis)
AIM:
To gain more knowledge about marketing analytics to support corporate decision-making, boost
your self-assurance while utilizing customer data, comprehend the effects of data-driven
technologies, etc.
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Subject (Marketing Analytics and Data Analysis)
Course Objectives:
• To learn the fundamentals of Data analytics.
• To know the promotion and pricing analytics measures..
• To understand the media mix strategies.
• To explain the customer analytics metrics.
• To discuss the data analysis tools.
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Subject (Marketing Analytics and Data Analysis)
Course
At the end of Outcomes :
the course students will be able to:
• Explain the data management process for decision making.
• After successfully
Analyse completing
the pricing this techniques.
optimization course students will:
• Apply marketing mix models for successful marketing of products..
• Demonstrate customer analytics algorithm for boosting the sales score.
• Evaluate data using various statistical tools for effective decision making.
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Subject (Marketing Analytics and Data Analysis)
Table of Content:
•Price and Promotion Analytics
•Introduction
•Pricing analytics – Optimizing price using regression
•Price optimizing models – Pricing algorithm
•Promotion analytics – Types of Promotion analytics
•Business challenge
•Optimized Promotions
•Predictive Analytics for promotion
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Subject (Marketing Analytics and Data Analysis)
• Topic (Introduction-Pricing analytics )
Pricing analytics involves the collection, aggregation, and analysis of
pricing data from various sources.
It allows businesses to identify opportunities for revenue optimization,
understand the demand for their products and services, and visualize
how customers respond to different pricing strategies, and anticipate
competitors’ moves.
By analyzing historical data, companies can also identify which products
are more profitable over time and adjust their prices accordingly.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Introduction-Pricing analytics )
Depending on the industry, businesses use pricing analytics in different
ways.
For subscription-based businesses, pricing analytics can help them
understand the customer lifetime value and how to set prices for
different tiers of customers.
For retail businesses, on the other hand, pricing analytics can be used to
identify seasonality trends in sales and make dynamic pricing
adjustments accordingly.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Pricing Analytics Metrics)
To understand customer behavior and determine the right pricing plans
companies need to follow the right data. Following are key business
metrics for pricing analytics:
Price Elasticity of Demand: High elasticity indicates that alterations to
prices can dramatically affect demand.
Price Sensitivity: High sensitivity demonstrates that customers are
either looking for better deals or actively avoiding certain prices.
Revenue per Customer: Measures how much each customer
contributes to overall revenue for the company.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Pricing Analytics Metrics)
Quote-to-Cash Conversion Rate: A high conversion rate indicates the
effectiveness of a pricing model.
Average Order Value (AOV): The average amount a customer spends
per order.
Customer Lifetime Value (CLV): The total amount of money a
customer is expected to spend with the company over their lifetime
(closely related to customer loyalty.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Pricing Analytics Metrics)
Gross Margin: Low margins can be offset by high sales volumes and
vice versa.
Profitability by Product or Customer Segment: The amount of
income a business brings in from a specific product, service, or customer
segment compared to the amount of resources used to generate that
income.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Price Optimization Models can help businesses achieve their financial goals
by recommending prices that maximize profits.
By using these mathematical programs with the use of a quality price
optimization software, companies can gain a better understanding of how
demand for their products or services varies at different price points, as well as
the impact of costs and inventory levels.
Without them, finding the right price for the right customer at the right time
could be mere guesswork.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Pure Price Optimization Algorithms
Pricing optimization algorithms are computer programs that use mathematical
models to optimize pricing strategies.
These algorithms use market data, consumer behavior, and product demand to
identify the optimal price point for a given product or service.
Two commonly used pricing optimization algorithms are dynamic pricing
algorithms and price elasticity algorithms:
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Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Pure Price Optimization Algorithms
Pricing optimization algorithms are computer programs that use mathematical
models to optimize pricing strategies.
These algorithms use market data, consumer behavior, and product
demand to identify the optimal price point for a given product or service.
Two commonly used pricing optimization algorithms are dynamic pricing
algorithms and price elasticity algorithms:
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Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Dynamic Pricing Algorithms
Dynamic pricing algorithms are pricing optimization algorithms that adjust
prices sometimes in real-time, (but also adjusting prices at a high frequency)
based on market data and consumer behavior.
Dynamic pricing algorithms are most used in e-commerce, travel, hotel, and
entertainment industries.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Price elasticity algorithms:
Price elasticity algorithms are pricing optimization algorithms that analyze the
relationship between product price and product demand.
These algorithms use statistical methods to predict the effect of price changes
on product demand.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Uber’s Use of Price Optimization Models
Depending on demand and seasonality, Uber on occasion uses an in-house price
optimization model that prioritizes increasing the number of rides, rather than
maximizing profits.
This approach can help Uber attract more riders and increase market share, while
still maintaining profitability.
Apple’s Value-Based Pricing
Value-based pricing is a pricing strategy that sets prices based on the perceived
value of a product or service to the customer.
For example, Apple is a company that uses value-based pricing. Apple’s products
are known for their high quality, innovative features, and premium price points. 17
Subject (Marketing Analytics and Data Analysis)
• Topic (Price Optimization Models & Techniques)
Hotels and Airlines Demand-Based Pricing
This pricing strategy considers factors such as seasonality, market trends, and
consumer behavior to determine the optimal price point.
For example, hotels and airlines use demand-based pricing to adjust prices based
on factors such as occupancy rates, time of year, and market demand.
During peak travel seasons or holidays, prices are typically higher due to
increased demand, while prices are lower during off-peak periods.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Promotion Analytics)
Promotional analysis is a technique of evaluating success or failure of a
promotion using past time series data.
It can be understood as discovering a correlation between sales patterns and
marketing efforts which includes promotions offered and advertising.
The objective of promotional analysis is to help a retailer understand the
impact of past promotions and hence formulate future strategies which could
be applied and adapted to produce profitable results.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Digital marketing analytics
Helps businesses make data-driven decisions by improving marketing strategies,
anticipating market trends, and enhancing customer behavior
Predictive marketing analytics
Uses algorithms and predictive models to forecast future trends and outcomes,
identify potential customers, and optimize marketing campaigns
Web analytics
Involves collecting, measuring, and analyzing web data to understand how users
interact with a website
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Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Competitor analysis
Involves analyzing where competitors' traffic and customers are coming from to
gain information about what a company might want to incorporate into its own
marketing efforts
Customer perception
Uses analytics software to predict and determine what consumers want based on
their profiles, purchase histories, and browsing behaviors
Descriptive analytics
Explains what happened in the past, often serving as a foundation by surfacing
historical performance data
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Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Predictive analytics can help businesses optimize promotions by using historical
data to predict future demand and trends. This can help businesses:
Improve timing: Understand when demand is likely to increase for a product and
optimize the timing of promotions
Identify trends: Spot emerging trends and capitalize on new opportunities
Create effective pricing strategies: Identify demand patterns and price elasticity
Improve promotional spending: Optimize promotional spending across the
portfolio and customer base
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Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Align with marketing strategies: Ensure that promotions are aligned with
overall marketing strategies
Identify ineffective promotions: Eliminate ineffective promotions and optimize
promotional budgets
Improve decision-making: Gain insights into consumer behavior, market trends,
and promotion effectiveness
Collaborate with suppliers: Retailers with automated access to analytics can
better collaborate with suppliers
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Subject (Marketing Analytics and Data Analysis)
• Topic (Predictive Analysis for Promotion)
Predictive analytics can help businesses optimize promotions by using historical
data, statistical models, and algorithms to forecast future demand.
This can help businesses improve the effectiveness of their promotions, increase
sales, and maximize their return on investment (ROI).
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Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Here are some ways predictive analytics can help with promotions:
Demand forecasting
Predictive analytics can help businesses understand when demand for a product is
likely to increase. This can help businesses optimize the timing of promotional
offers.
Identifying trends
Predictive analytics can help businesses spot emerging trends and capitalize on
new opportunities.
Personalized offers
Businesses can use predictive analytics to target the right consumers with
personalized offers. 25
Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Optimizing budgets
Businesses can use predictive analytics to identify and eliminate ineffective
promotions, and optimize promotional budgets.
Aligning with marketing strategies
Businesses can use predictive analytics to align their promotions with their
broader marketing strategies.
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Subject (Marketing Analytics and Data Analysis)
• Topic (Types of Promotion Analytics)
Some other ways to optimize promotions include:
Scenario planning: Businesses can use scenario planning to simulate future
promotions and identify the best parameters.
Post-event analysis: Businesses can use post-event analysis to develop
promotional guidelines.
Flash sales: Businesses can use flash sales to create a sense of urgency and
scarcity, encouraging consumers to purchase before the promotion ends.
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Subject (Marketing Analytics and Data Analysis)
Interesting facts
The global marketing analytics market is
projected to reach $4.4 billion by 2027,
Interesting Facts according to a report by Research And
Markets..
57% of marketers say that analytics is the most important skill for their job, according to a survey by Salesforce.
A study by Forrester Research found that companies that excel at data-driven marketing are 3 times more likely
to report significant improvements in their decision-making processes.
93% of CMOs believe that data is essential for making marketing decisions, according to a survey by Gartner.
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Subject (Marketing Analytics and Data Analysis)
• Reference books
• 1. Pedro Sostre, Jennifer LeClaire; Web Analytics For Dummies; John Wiley & Sons,
• 2. Julien Harty, Antoine Aymer; The Mobile Analytics.
• 3. Michael R Solomon, Tracy Tuten, Social Media Marketing, Pearson, 1e.
• 4. Judy Strauss & Raymond Frost, E-Marketing, Pearson.
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