What-if Analysis — Market Response Modelling


Exhibit 27.18   What-if analysis for price discounting. (Disguised data, click to download workbook)

The output of a market model is a set of equations that spell out the relationship between sales and the variables of the market mix. With these equations one can predict what will happen if changes are made to the mix variables. Exhibit 27.18, for instance, provides an example of a "What-if" analysis tool to simulate the impact of price discounting. By changing the discounts in "%Price Off" column the user is able to see how those discounts will affect the sales volume and sales value, for the items in the category. 

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