Trade Promotion Optimization Strategy Leads to Three-fold Increase in ROI for CPG Manufacturers in the US

May 23, 2017

Quantzig’s latest study on trade promotion optimization engagement for a consumer packaged goods (CPG) manufacturer improved their cross-selling and up-selling based on target promotions and pricing by 12%.

Promoting Effectiveness Through Trade Promotions Optimization

Trade promotion optimization (TPO) strategy is adopted by various companies to improve the sales revenue and increase the efficacy of the trade management process. TPO utilizes integrated goals, factoring in promotion and supply constraints, and predictive analytics for precise promotion planning and increasing client loyalty. With meticulous planning and data analytics, many businesses are leveraging TPO to increase their short-term sales. The TPO solutions offered by Quantzig helps businesses generate better forecasts to analyze promotion efficiency of their products. The data for analysis is collected from various sources such as promotion analysis, price point optimization, and sales forecasts. This market study helps manufacturers in the CPG industries to understand consumer buying behavior and taste preferences, giving them a giant leap ahead of their competitors.

Customization in various TPO strategies is gaining immense popularity in the global market. Vendors are focusing on personalizing marketing to attract more consumers and reach a varied group of end-users. These custom plans help boost sales and increase brand loyalty among consumers. The new approach aids organizations to design flexible and scalable TPO plans that suit niche markets and meet the requirements of current demand trends.

Speak with our analytics experts to understand the benefits of trade promotion optimization strategy, and how to leverage it in the best way for your business.

Seasonal Promotions and Sales

Promotion and execution of seasonal products is a challenge for different manufacturers in the market. By designing trade promotion optimization plans that help in improving inventory management and increase consumer loyalty will fuel the growth in sales and profit. Developing strategic solutions will help companies to improve ROI and overall cost savings. Additionally, the implementation of a pricing simulation that could model sales volumes based on different market scenarios replaces the instinct-based approach of the category management department.

Predictive Analysis for TPO

Predictive analysis is the method of using various historical sales data, category and product data, pricing data, and shipment data to develop solutions that improve a company’s promotional executions. The use of simulated sales based on different scenarios will result in effective pricing and promotion strategies. Moreover, predictive analysis focus on discounted retail prices, different forms of merchandising, seasonality, and other retail conditions to propel the sales revenue of businesses.

Outcomes, Insights, and Solutions Offered

Quantzig’s trade promotion optimization engagement for a leading CPG manufacturer analyzed promotion efficiencies, based on time of day/month, retailer segments, and region to improve promotion reach and effectiveness. Some of the solutions offered are as follows:

  • Created a promotion plan option based on levers such as cost, timing, and depth of promotional activities, resulting in increase in ROI by three times
  • Offered solutions that improved the client’s trade promotions planning process based on accurate volume forecasts and promotional efficiency
  • Provided insights about the promotional impact on consumer buying behavior and helped improve cost savings by 15%
  • Improved trade promotions planning process based on accurate volume forecasts and promotional efficiency
  • Projected forecast to analyze promotional efficiency, helping the client achieve time savings for more than three months in the promotion planning process
  • Developed accurate baselines and lift coefficients, and the ability to deliver one-off promotion predictions based on numerous pricing scenarios

The complete case study on trade promotion optimization engagement for a leading CPG manufacturer is now available.

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