Pricing Optimization with Van Westendorp Model
Manufacturing Sector
Reducing Price Discrepancies >50% vs. Competitors + Maximizing Profitability in a Price-Sensitive Market
Price Variations Reduced from >50% to Market-Aligned Levels
Increased Closed Deals & Profitability
Real-Time Pricing Tool for Sales Team
Introduction
As part of the strategic evolution from DataSphere to Simov Labs, this case showcases a data-driven pricing intervention using the Van Westendorp methodology that helped a leading manufacturing company in a highly competitive, price-sensitive local market regain competitiveness and boost profitability through optimized, market-perceived pricing.
Business Challenge
A prominent manufacturing company in a commodity-driven market noticed significant lost opportunities due to inconsistent and non-competitive pricing. Product prices fluctuated widely, with variations exceeding 50% compared to local competitors for commodity items. This led to reduced market share, lower profitability, and challenges in maintaining competitiveness amid aggressive local pricing pressures. There was no systematic methodology to determine optimal prices that balanced profitability and customer acceptance.
Implemented Solution
- 1Applied the Van Westendorp Price Sensitivity Meter methodology through targeted surveys and data capture to understand market perceptions of price points (too cheap, bargain, expensive, too expensive).
- 2Developed a pricing model that identified optimal price ranges and key thresholds for each product/SKU based on collected market data.
- 3Built an integrated ecosystem: databases to store survey and pricing data, combined with Business Intelligence tools to process inputs and visualize recommended price ranges per SKU.
- 4Delivered a user-friendly, accessible BI tool for the sales team, enabling real-time price adjustments, informed negotiations, and quick responses to market changes.
Obtained Results
Optimized pricing alignment: Reduced significant price discrepancies with competitors, bringing prices in line with market expectations.
Increased profitability: More deals closed by capturing previously lost opportunities, leading to higher overall margins.
Enhanced decision-making speed: Sales team gained the ability to make quick, data-backed pricing decisions in response to market dynamics.
Boosted sales team confidence: Clear, accessible model improved negotiation effectiveness, customer satisfaction, and team morale in pricing discussions.
Evolution in Simov Labs
This pricing analytics project is now fully integrated into our portfolio at Simov Labs. We evolve the Van Westendorp methodology into advanced, cloud-native implementations (Snowflake, Databricks, BigQuery) with production-ready AI/ML for dynamic pricing models, real-time sensitivity analysis, automated recommendations, predictive elasticity forecasting, and explicit ROI tracking.
Aligned with DAMA and TDWI governance frameworks, our current solutions emphasize business-first analysis, radical honesty in assessing pricing opportunities, and long-term partnership—ensuring pricing strategies deliver sustainable competitiveness, margin protection, and market advantage in price-sensitive industries. No promises. Just results.
Ready to implement data-driven pricing that maximizes profitability and market share?
Book a free 30-minute consultation. We'll discuss your pricing challenges and where a structured methodology can deliver the most impact.