Improving Profitability Using Predictive Analytics

Authors

  •   Bhaskar Roy Research Scholar, Department of Statistics, Banaras Hindu University, Varanasi - 221 005, Uttar Pradesh & Vice President - Genpact
  •   Debabrata Bera MPhil, International Institute for Population Science, Mumbai - 400 088, Maharashtra & Senior Manager - Genpact
  •   Praveen Kumar Tripathi Assistant Professor, Department of Mathematics and Statistics, Banasthali Vidyapith, Banasthali - 304 022, Rajasthan
  •   S. K. Upadhyay Professor, Department of Statistics, Banaras Hindu University, Varanasi - 221 005, Uttar Pradesh

DOI:

https://doi.org/10.17010/ijom/2021/v51/i8/165759

Keywords:

Regression

, Predictive Modeling, Contribution Margin, Multicollinearity, Value-Based Pricing, Customer Value, Pricing Strategy, Business-to-Business, Decision Tree, Strategic Pricing.

Paper Submission Date

, January 10, 2021, Paper Sent Back for Revision, March 10, Paper Acceptance Date, May 7, Paper Published Online, August 30, 2021.

Abstract

The objective of this paper was to explore a better pricing strategy by predicting contribution margin (CM) to drive wins at higher prices. This paper focused on the services industry, where macroeconomic factors play a key decisive role in arriving at contribution margin to win more deals in this competitive market. The paper incorporated prior research findings to develop a multidimensional and multifaceted framework depicting the methodology of formulating customer value for value-based pricing. The empirical portion of this paper contained a case study based on masked industry data from an industrial manufacturing company dealing with products and services. We discussed and highlighted the criticality of identifying and capturing the right features while creating the right pricing strategy using multiple linear regression and decision tree techniques. Applying the predictive analytics approach helped us estimate the contribution margin with a higher winning probability during contract negotiation. This paper would aid organizations to develop and implement an enterprise-wide strategic pricing discipline designed to bolster the value and impact of their products and service pricing.

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Author Biography

Bhaskar Roy, Research Scholar, Department of Statistics, Banaras Hindu University, Varanasi - 221 005, Uttar Pradesh & Vice President - Genpact

ORCID iD : https://orcid.org/0000-0003-3922-1583

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Published

2021-08-31

How to Cite

Roy, B., Bera, D., Tripathi, P. K., & Upadhyay, S. K. (2021). Improving Profitability Using Predictive Analytics. Indian Journal of Marketing, 51(8), 8–25. https://doi.org/10.17010/ijom/2021/v51/i8/165759

Issue

Volume 51, Issue 8, August 2021

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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