Sentrana Releases New Price Optimization Toolkit

Washington, DC, April 03, 2009 --(PR.com)-- Sentrana Inc., a Washington DC-based leader in solutions for excellence in scientific micromarket management, announced today the release of a price optimization toolkit using a novel approach to modeling the effect of price on demand. Typically, price optimization models assume that the effect of price change on demand variation for a product is more or less symmetric, i.e. a 1% increase (decrease) in price will produce, say, a 1.5% decrease (increase) in demand. This assumption, however, can be invalid if we start to build demand models at the individual customer level, a hallmark of Sentrana micromarketing solutions. What happens in fact is that often the effect of price changes is asymmetric – and sellers who don’t understand this risk leaving money on the table that could bolster their operating profits.

Sentrana Modeling Manager Alireza Mahani explains, “In a B2B environment where a large fraction of customers are return customers with established relationships, lowering the price on recurring sales of the same product is unlikely to lead to increased volume. On the other hand, raising the price selectively in cases where customer has been paying at levels that are out of line with market levels will have only a small chance of reducing the sales volume or losing the customer.” Mahani continues, “This is a fundamentally different way of looking at price elasticity than a standard textbook approach.”

Mahani adds that by disentangling the factors that contribute to demand conditions at the micromarket level, Sentrana’s solutions have the ability to pinpoint areas for profit gain. By taking elasticity asymmetries and other anomalies into full account, Sentrana’s new optimization toolkit provides price recommendations that show significant improvement over other quantitative-based solutions in their compatibility with business judgment, thereby reducing the human supervisory effort needed and creating higher organizational buy-in compared to conventional paradigms.

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Sentrana Inc., based in Washington, DC, is a pioneer in providing scientific micromarket management solutions to industry leaders in highly competitive markets. We provide end-to-end revenue optimization solutions by combining advanced quantitative methodologies with qualitative managerial inputs into our patented MarketMover™ platform. Our technology facilitates optimization of the marketing decisions at the individual transaction level that drive financial performance, allowing organizations to actively shape their demand environments. Our solutions enable our clients to make better pricing decisions, increase profitability, and unify disparate business units under a single revenue strategy.