First-Principles Problem Solving: the December Pricing Model (12 Factors, 3 That Matter) and a Jan-Mar Marketing Plan

Break the problem to its most fundamental truths ('like an atom') and rebuild. Musk: why are rockets expensive, what do the parts cost, why not reuse them. Business uses: category sales and root cause, customer and channel growth (narrow 'reach every Indian' to buyers of similar categories who have not bought yours), supply-chain forecasting, finance alerts, strategy.

Case: head of planning, 500+ SKUs, 11 subcategories, maximise revenue while hitting the bottom-line plan. Twelve factors: historical sales, seasonality, discount sensitivity (does +1% discount lift sales 1% or 5%), competitor pricing, SKU margins, planned profit, price thresholds (never sell moisturizer below Rs 1,500), marketing spend, other income (brand-placement income redirected into discounts), inventory, brand value (Nike avoids 60-70% off), annual plan. His tested shortcut: seasonality + SKU-level margin + overall profit give 75-80% accuracy - seasonality gives upside, margin stops negative-margin SKUs, profit sets the floor, then maximise revenue. Do not build the all-inclusive model.

Case: head of marketing, lip and eye makeup strong, launching lip gloss and nail paint, plan Jan-Mar. Online: geography split (Bangalore, Hyderabad, Chennai are 55-60% of revenue; check saturation and move budget to headroom cities), pin-code targeting (the pin codes behind most searches), affinity targeting (related-category search volumes - fashion jewellery, premium fashion), channel investment and ROAS (Google, YouTube, Meta), audience size, budget, reach x frequency = impressions. Offline: map stores and counters on a city map and place outdoor ads or short-term pop-ups in dense shopper clusters. The lesson is the approach, not the numbers.