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WITS 2013 Pricing Panel- Final Final

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WITS 2013 Pricing Panel- Final Final

  1. 1. July 15-16, 2013 Napa Valley Marriott11 Pricing Systems for the Wine Industry: Best Practices, Models and Tools
  2. 2. Panelists • Chris Spear, Vice President, Business Solutions, TradePulse • Steven S. Cuellar, PhD., Professor and Chair, Department of Economics, Sonoma State • Mark Barichievich, Director Sales Admin., Trinchero Family Estates • Manoj Menon, Vice President, Product Management, Vistaar
  3. 3. What is Pricing? • What is Pricing to a • Supplier? • Wholesaler? • Retailer? • Cost-based Pricing (business driven) vs. Value Pricing (consumer driven)?
  4. 4. Why is Pricing important? • Executive: Strategic tool for both planning and execution • Marketing: Pricing is key to protecting brand equity • Sales: Direct connection to profitability and sales volumes • Change Management Key: a transparent model will create agreement (buy-in)
  5. 5. What is the Pricing Problem? • What is the best price for my product? • To meet corporate objectives • To enhance or maintain brand equity and value with the Consumer • How do I know what will happen if I change price? • Impact on our sales volume or profitability • Impact on trading partners • Impact on other products in our portfolio • Competitive response • Consumer response
  6. 6. What is the State of the Industry for Pricing? • Excel is generally our current solution and System of Record; often contained in hundreds or thousands of disparate spreadsheets • The pricing chain (create, edit, analyze, authorize, publish, execute) is intensely manual with many points of failure and potential error • Analysis is often limited by the Excel skills of the end user and is almost always limited to a local-market scope • Lack of accurate pricing models contributes to a perception of “margin winners vs. margin losers”
  7. 7. Pricing Best Practices • Centralize pricing data in a common repository or database • Maintain full traceability to all pricing changes • Model all pricing throughout the supply chain (supplier, wholesaler, retailer, consumer) • Price backwards from the Consumer (value pricing) • Price to each market (more complex in beverage alcohol) • Monitor Price Execution • Create a Pricing Roadmap to improve your pricing models over time
  8. 8. • Companies that have not yet implemented a formal price optimization initiative, or that have relied on ad hoc analysis tools or internal spreadsheets, should examine price optimization as one of the few investment areas that can impact revenue, margin and customer experience. Price Optimization Technology Impact & Trends • Increased revenue and profitability • Consistent customer experience • Market development * Beverage Alcohol across Beer, wine & spirits is identified as heavy impact industry vertical
  9. 9. Pricing Solutions Build vs. Buy* Pro Con In-House •Can be precisely customized to company needs •Can be built with unique competitive advantages •Can become a strategic corporate asset •Developing custom software can be a significant distraction from core business •You shoulder all costs to develop, maintain, support, and improve the system •Custom systems can be prone to errors and omissions Vendor •Benefit from best practices from across the customer base •Software development and support is a core competence •Often more feature-rich than custom solutions •Lower adoption risk; easier to use because of broader user base •May be difficult to find a solution that “fits” your business needs •Concerns about being “locked in” to a particular solution •You are one of many customers •Business Continuity risk *Change Management Key: Include Stakeholders in solution!
  10. 10. Pricing system benefits • Productivity • Reduces data entry and repeated manual inputs • Increases capability to add automation • More efficient Production planning • Data Integrity • Price Planning and Execution • Revenue and Profit management • Key component of Supply Chain Management (SCM)
  11. 11. Pricing Roadmap 1. Pricing Management a. Common interface and centralized pricing repository 2. Pricing Analytics a. Basic insights to margin impact of pricing changes based on volume and price inputs 3. Price Modeling and Optimization a. Predict pricing outcomes based on statistical models b. Optimize pricing for volume and/or profit to meet business objectives
  12. 12. Technology Roadmap 1. Centralize Data 2. Data Hygiene 3. Monitoring (basic analysis/insights) 4. Information distribution/access 5. Enhance data (third-party) 6. Modeling Tools Key question: Does your Resource Plan match your Roadmap?
  13. 13. Pricing manifesto for Beverage Alcohol • We will add Professional Development funding to our budgets for our Pricing staff • Our pricing will be fully integrated with other parts of the business (sales, marketing, finance, executive) • We will execute pricing with our trading partners in a manner that is compliant, consistent, accurate, timely and scalable • We will optimize pricing from models that: • Include the Economy • Take into account our competitors • Understand human behavior (consumer, retailer, wholesaler) • Support our strategic and tactical objectives • Deliver value to our customers • Our pricing models will allow us to predict sales with increasing accuracy
  14. 14. July 15-16, 2013 Napa Valley Marriott1414 Thank You
  15. 15. Appendix – Contact Info
  16. 16. Appendix – Speaker Bio • Name:  • Mark Barichievich • Company:  • Trinchero Family Estates • Title/Position:  • Director, Sales Administration • Mark has 14 years of Sales Administration experience in the Wine Industry. He joined R.H. Phillips Winery in 1999, and through many acquisitions, has worked for Vincor Int., and Constellation Brands in various Sales Administration and Finance roles. He has managed the Pricing Department at Trinchero Family Estates for 4 years, where he managed the development and implementation of an “In House” built pricing system. Mark holds a BS in Agricultural and Managerial Economics from UC Davis. In his free time, he runs ultra-marathons.
  17. 17. Appendix – Speaker Bio • Name:  • Steve Cuellar, PhD • Company:  • Sonoma State University • Title/Position:  • Professor of Economics • Dr. Steven Cuellar is Professor of Economics at Sonoma State University where he teaches courses in Microeconomic Theory, Labor Economics, Public Economics, Econometrics and Wine Economics. His research interests are in the fields of consumer behavior especially as it relates to pricing and marketing. Other research interests include issues relating to labor markets, public policy and wine. Dr. Cuellar has presented his research at local, national and international conferences and his research has been published in academic journals, trade publications and professional journals. He received his Ph.D. from Texas A&M University.
  18. 18. Appendix – Speaker Bio • Name:  • Manoj Menon • Company:  • Vistaar • Title/Position:  • VP, Product Management • Manoj is software professional with more than 13 years of experience in enterprise software development, sales & strategy. Manoj began his career in product development and has experience in deploying pricing solutions in a number of Fortune 500 companies across many industries like Hi-tech, manufacturing, etc. Over the last 5 years he has deployed pricing systems across spirits, wines and beverage alcohol distributors. He is a Certified pricing professional and as the vice president of beverage alcohol solutions, Manoj is responsible for the solution footprint and product roadmap for the industry vertical.
  19. 19. Appendix – Speaker Bio • Name:  • Chris Spear • Company:  • TradePulse • Title/Position:  • Vice President, Business Solutions • Mr. Spear manages the TradePulse product portfolio, works with Customers on custom solutions, and leads the creation of solutions that result from our Continuous Improvement processes. As the IT Manager for a growing national wine brand Chris led the development and implementation of leading edge solutions for a wine sales enterprise that considered its use of technology a competitive advantage. In addition, Chris was a partner in a wine industry software startup. He holds a BA in Psychology from the University of Washington with emphasis on Organizational Leadership.

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