A Fortune 100 healthcare company struggled in launching an innovative products with a better profile in a market dominated by an entrenched player. Most key customers had established long term relationship and financial contracts with the incumbent. To break the barrier, sales team was going to provide counter offers to all customers based on field intelligence. In a duopoly situation, this will start a classic pricing war and tank the value of the market. How to selectively provide individualized offer to each customer without negatively impacting the total market value?
By interviewed field personnel, the team learned that the individual customer contract from the incumbent was volume based. There were very limited knowledge at that time on purchasing volume and discount rate for each individual customer. The first step of the analytical project was to identify the purchase volume and frequency from third party sales audits. At the time of this analysis, there was no information available at individual customer level. However, there were other data sources at regional, class of trade, and market basket level. We developed an innovative data fusion process to build very reliable individual customer level weekly purchasing projection based on aggregated data.
A simulator was built and deployed to individual account executives who will provide real time contract negotiation with the customer. National level simulations were also conduct to estimate the product uptake with different level of offers.
The innovative brand captured close to 50% market share in 24 months after adopting this new strategy.