Slice and Price: Automotive Parts Distributor Uses Big Data to Optimize Product Pricing
Navistar Gains Actionable Market Insights with Analytics Solution Powered by PROS and Microsoft Technologies
Automotive manufacturers and distributors have faced challenges in recent years finding the optimal price structure for their markets. Navistar, one of the world’s largest truck manufacturers and service parts suppliers, needed the ability to analyze high volumes of data to assign pricing across channels and market segments in a timely way. It sells more than one million product SKUs and serves more than 700 dealer locations in North America.
“Given the size and dynamic nature of that footprint, we couldn’t handle all the data with manual processes and our existing infrastructure,” says Joel Larsen, Vice President of Parts Sales at Navistar International. “We needed an analytics tool that could grow with the complexity of our business and our geographic presence.”
Navistar adopted the PROS pricing solution powered by Microsoft SQL Server. PROS, a leading big data software company, worked with the manufacturer’s IT team to use existing transaction data. Navistar now publishes pricing six times per year—three times more frequently than it did in the past.
“We previously operated in the world of averages,” says Larsen. “What PROS does for us is drill up, down, and sideways to get to a level of granularity and segmentation in data analysis that we had difficulty getting to before.”
Navistar employees find the PROS solution to be easy to use, and it interoperates well with the company’s other technologies. In a time-constrained environment, Navistar uses the solution to help prioritize and focus resources as efficiently as possible. “It comes down to tangibles,” says Larsen. “You’re getting the business or you aren’t. Before we started doing data analysis, we could never get to the true on–off binary quality of our products, dealers, and ustomers.”
By using scientific analytics and Microsoft products, Navistar can react more nimbly to regional and local competitors, and better serve dealers and customers. “The only rational plan is to utilize data,” says Larsen. “Whether we’re looking at SKUs, dealers, or customers, we have to know where to aim.”
With PROS, the company can identify targets of sales and margin opportunity, and the pricing team can then adjust prices for individual parts and bring them in line with competitive prices. This approach drives transparency and gives Navistar employs the tools to provide benefits for dealers and grow sales. “I want everyone on our teams to act as the CEOs of their area of business,” says Larsen. “With data analysis, sales and pricing employees can analyze performance, which empowers them to act as CEOs.”
By adopting this big data solution—in which PROS functions as an enabler of profitable growth—Navistar gains a powerful tool for capturing price premiums and driving revenue. “We put a lot of resources into using data to profitably grow,” says Larsen. “I’m very proud of the progress we’ve made.”