Pricing Strategy: Machine Learning & Market Dynamics

27 September 2016 | ZilliantThis post was contributed by Zilliant Pricing Scientist Amir Meimand, who will be presenting at INFORMS in Nashville, Tennessee. In this post, Amir gives a primer on pricing science and explains how machine learning empowers organizations to respond swiftly with price after a change in market dynamics. Let’s Start at the Beginning: A Primer on Pricing Science Pricing science started in the early 1980s with the airline industry. These models were mostly based on descriptive and predictive analytics to set price according to forecasted demand and available number of seats. Since about 2000, the application of pricing science has taken off in B2B. Instead of optimizing the offers available in response to very dynamic capacity, these B2B pricing applications enabled optimization based on a particular set of…

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