Pricing  is not an art! It is a science.  The impact of pricing on unit sales is the measure of  a product’s price elasticity.  It is measured as 

%D Units ÷ %D Price,

or, in other words, a ratio that estimates the increase or decrease in unit sales based on the increase or decrease in price.  With this basic piece of knowledge, business managers can estimate volume based on the pricing activity being contemplated.  As is illustrated above, pricing may be in-elastic through certain price ranges and highly elastic through others.  The result of this calculation is usually negative, and if >1 would be considered elastic.  As a rule of thumb, if the elasticity is <2, the resultant increase in units does NOT provide a positive return on investment.

The value of having this data and modeling it is to predict the impact of pricing, and once you can predict it, to prescribe the pricing to achieve the desired outcome whether it is driving units, dollars, profit or share.

Use internal information on costing to determine whether or not pricing decisions are providing a return on the investment, or as illustrated to the right, providing more or less contribution margin to the business.  

CategoryMaster can work with you to develop models to predict the impact on pricing decisions , but more usefully develop a way for you to prescribe the desired outcome.  These models will be built using existing tools in your office, i.e., MS Excel, so there is no need to invest in new software and user education.