October 6, 2016

6 Key Benefits of Intelligence Sharing in Pricing and Network Planning

Fuel Prices, Network Planning

When pricing competition heats up — as it tends to do — what's your solution? If you have a one-dimensional view of your fuel and retail success, you'd simply lower prices. But we don't live in a one-dimensional world, and neither does your business. Lowering prices isn't the answer.

As the market squeezes fuel volume and margin, convenience retail provides new opportunities for driving profit. Every aspect of your business, from forecourt to store, can influence consumer decision making. Consider how much you miss if these seemingly disparate elements of success don't communicate or interact. Your best solution for total site profitability is to share intelligence — especially between pricing and retail network planning factions of your business, which have traditionally been treated as distinctly separate entities.

Discover the Benefits of Intelligence Sharing

Why would there be any overlap between retail network planning and pricing?

It's easy to see pricing as tactical and network planning as strategic. That's an accurate perspective — each faction holds down one end of the tactical-to-strategic spectrum. But that doesn't mean they should never meet.

Consider that your pricing teams depend (at least in part) on location intelligence to inform their decisions. And your retail network planning team creates models for capital investments that depend (at least in part) on data generated by the performance of your pricing analyst teams.

When phrased that way, the intersection of these factions' models and practices seems clear. But in most organizations, cross-pollination of the two perspectives is rare. As a result, opportunities for intelligence sharing aren't taken seriously.

Both pricing and planning systems can be improved through intelligence sharing across these two areas, leading to greater total site profitability. Such synergy has been a driving force behind Kalibrate Cloud, an end-to-end platform that facilitates cross-pollination.

Start to recognize the value of bringing your planning and pricing teams, systems and processes together by considering the following benefits:

1. More informed target volume pricing rules

The ability to review volume potential vs. actual volume performance — the results planners expected compared to your actual results — can help you create more sturdy pricing rules for volume targets.

2. Streamlined competitor analysis

Finding connections between location, pricing and market can help you better identify which competitors are most important to survey and which you don't need to address.

3. Enhanced benchmarking capabilities

Considering key fuel and retail elements like pricing, location, market intelligence, merchandising, facility, operations and brand with reference to trade area can better inform strategy.

4. Better min/max volume potential forecasts

The ability to test pricing position can help you detect minimum and maximum volume potential and therefore make better investment decisions.

5. Increased in-store sales performance

Using pricing position tests, you can optimize the relationship between pricing strategy and your retail sales.

6. Improved volume efficiency

By creating changes in price position and measuring resulting changes in volume, you can better calculate and benchmark the volume efficiency for each site.

Bottom Line?

Synergy between your pricing and network planning teams actually matters, and will produce actual benefits. The value of intelligence sharing within your organization can't be overstated.

 

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