FMCG · Promotion optimisation
Promotions looked as if they performed randomly. Once we accounted for everything else affecting sales, a clear and profitable plan emerged.
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Challenge
The client judged promotions on simple volume uplifts per product. Cannibalisation, brought-forward sales, competitor activity, its own advertising and the weather weren't accounted for, so the same discount in the same position seemed to work differently every time, making planning unreliable.
What we did
Using promotional calendars, EPOS data and data on every other factor affecting sales, we built marketing mix models that measured the true impact and ROI of each promotion, by retailer and by product.
Result
A clearer view of the real revenue and profit of each promotion let the client cut cannibalisation and allow for brought-forward sales. The re-optimised plan added $10.3m in annual profit across one product range in one large European market.