Pareto Frontier & Multi-Parameter Based Pricing and Revenue Management Methodology

Pricing is the most important element of all the marketing-mix and yet is the least understood. With the evolution of the current marketplace towards increased customization, the predicament of pricing becomes more complex and acute. Our invention helps businesses formulate pricing strategies. The methodology empowers corporate and private business owners alike, to achieve price advantages critical to business performance and profitability, by intelligently bringing together customer preference data (front office) and supply chain data (back office). The methodology is perfectly adapted for the pricing of complex products and services (i.e., those comprising of complex features such as aircrafts, medical equipment and complex IT products). The algorithm can also be augmented to provide pricing solutions for simple products.This approach uses optimization algorithms to separately analyze customer perceptions of value and supply chain information (i.e. production capacity, inventory levels, holding costs) on a feature by feature basis, leading to prices that maximize the cost-benefit tradeoff.