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New Product Recommendation

The document outlines a product pricing algorithm developed by the Data Science Team to identify new bicycle models and their prices based on existing products. It highlights two product gaps in the aluminum category for Over Mountain and Triathalon bikes, with predicted prices of $2,985 and $2,438 respectively. The next step involves integrating the pricing model into a proof-of-concept web application for the R&D department.

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27 views3 pages

New Product Recommendation

The document outlines a product pricing algorithm developed by the Data Science Team to identify new bicycle models and their prices based on existing products. It highlights two product gaps in the aluminum category for Over Mountain and Triathalon bikes, with predicted prices of $2,985 and $2,438 respectively. The next step involves integrating the pricing model into a proof-of-concept web application for the R&D department.

Uploaded by

irsad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Product Pricing Algorithm

Business Science
3/19/2019

Problem Statement
Research and Development wants help to determine new product ideas and pricing using existing product
line as a benchmark.

Solution Summary
We’ve identified several product gaps in the existing product line including:

1. Aluminum Over Mountain


2. Aluminum Triathalon

The Data Science Team has developed a pricing model that uses predictive analytics to estimate the price of
the new bicycle models based on the existing fleet. This ensures that new models are priced comparatively
to other similar bicycles.
New product prediction for 2 new models:

1. Trigger, Over Mountain with Aluminum Frame: $2,985


2. Slice, Triathalon with Aluminum Frame: $2,438

Next Steps: Integrate the model into a proof-of-concept web application that can be deployed to the R&D
department.

Gap Analysis
Bike List

Our current product portfolio consists of 97 bike models that were analyzed.

## # A tibble: 97 x 15
## id price model category_1 category_2 frame_material model_base
## <int> <dbl> <chr> <chr> <chr> <chr> <chr>
## 1 1 6070 Jeky~ Mountain Over Moun~ Carbon Jekyll
## 2 2 5970 Trig~ Mountain Over Moun~ Carbon Trigger
## 3 3 2770 Beas~ Mountain Trail Aluminum Beast of ~
## 4 4 10660 Supe~ Road Elite Road Carbon Supersix ~
## 5 5 3200 Jeky~ Mountain Over Moun~ Carbon Jekyll
## 6 6 12790 Supe~ Road Elite Road Carbon Supersix ~
## 7 7 5330 Supe~ Road Elite Road Carbon Supersix ~
## 8 8 1570 Syna~ Road Endurance~ Aluminum Synapse
## 9 9 4800 Syna~ Road Endurance~ Carbon Synapse
## 10 10 480 Cata~ Mountain Sport Aluminum Catalyst
## # ... with 87 more rows, and 8 more variables: model_tier <chr>,
## # black <dbl>, hi_mod <dbl>, team <dbl>, red <dbl>, ultegra <dbl>,
## # dura_ace <dbl>, disc <dbl>

1
Gaps

The visualization segments the full bicycle product line by category and frame material. This exposes two
product gaps:

1. New Aluminum line of bikes in the Over Mountain Category


2. New Aluminum line of bikes in the Triathalon

Product Gap Analysis


Aluminum Carbon

Cross Country Race

Over Mountain

Triathalon

Fat Bike

Trail

Endurance Road

Elite Road

Cyclocross

Sport

$0 $5,000 $10,000 $0 $5,000 $10,000

2
Price Prediction

New product prediction for 2 new models:

1. Trigger, Over Mountain with Aluminum Frame: $2,985


2. Slice, Triathalon with Aluminum Frame: $2,438

New Model Attribute Slice Al 1 Trigger Al 1


.pred $2,438 $2,985
frame_material Aluminum Aluminum
category_2 Triathalon Over Mountain
model_base Slice Trigger
model_tier Ultegra Aluminum 1
black 0 0
hi_mod 0 0
team 0 0
red 0 0
ultegra 0 0
dura_ace 0 0
disc 0 0

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