ABSTRACT
This chapter introduces an approach to pricing analytics: econometric modeling using sales or transactions data in a pricing data mart. It first presents a pricing scenario as a choice situation for pricing strategies. The chapter discusses a modeling process designed to make working with Big Data easier. The process is divided into three blocks: data block; modeling block; and analysis block. These three blocks, working together to accomplish the modeling task, have a logical flow: data modeling Analysis. The chapter also discusses the three blocks in detail. The Data Block consists of three levels: management input; data collection; data engine. The chapter provides information on win–loss modeling, an often-overlooked aspect of pricing analysis with Big Data. Panel models can be estimated by most econometric software packages. The three commercial packages Eviews, LimDep, and Stata will handle panels. The freeware econometric software package Gretl is also very good for panel models, especially for the price.
