This document outlines a pricing profitability model that analyzes several key factors to determine optimal pricing strategies. The model examines advance order analysis, economic analysis on macroeconomic and microeconomic trends as well as industry trends, customer segmentation analysis and ranking, historical time series data on seasonal supply and demand trends, cost and break-even analysis, competitive analysis on capacity, pricing, and substitutes, and collects management estimates from various levels to inform pricing decisions. The ultimate goal is to answer questions around current pricing, discounting, price increases, and margins based on the comprehensive analysis.

1. A Pricing Profitability Model
The Price is Right?
What is
our price
saying?
Should I
discount?
Where’s the
market going?
Am I
charging
too much?
Are our
margins
good?
Advance Order Analysis
Actual Advance Orders
Forecasted Orders
Event (Internal/External)
Economic Analysis
Macroeconomic
Microeconomic
Industry Trends
Other Variables
Known
TBD via Testing
Customer Analysis/Ranking
Segment A
Segment B
Other
Historical Time Series Analysis
Seasonal Supply/Demand Trends
Actual v. Projected Results
Statistical Price Analysis
Cost/Expense & B-E Analysis
Fixed Costs
Variable Costs
Break-Even Point
Competitive Analysis
Capacity (Current or Planned)
Pricing
Substitutes
Management Estimates
Senior Management
Operating Managers
Department managers
Can I
raise my
price?