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Promotion Analysis and Planning Tools |
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Question
Is it better to promote my product or service frequently with little discount or infrequently with deep discounts?
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Challenge
Several clients requested assistance in improving the efficiency of their trade promotions. All of them had extensive experience in executing trade promotions, but were looking for the best balance between frequency and discount. A typical question was "Is it better to promote frequently with little discount, or to promote infrequently using deep discounts?" Although each client had a different goal (e.g., drive volume, maximize profitability, reduce spending but maintain volume, etc.), all of them were looking for the least expensive way to achieve their goal.
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Solution
For each task, we took tools from our portfolio of promotion planning and analysis and adapted it to the project at hand. In some cases we provided the model parameters (e.g., base price elasticities, promotion lifts, etc.), in other cases we incorporated the models and their respective coefficients provided by third parties. The findings and recommendations were presented in workshops for marketing personnel as well as sales and promotion planners. The users were trained in utilizing this new type of information for quarterly or annual plans.
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Outcome
Values delivered to the clients included:
- cost savings (e.g., they were able to avoid the "bad" deals)
- improved profitability (e.g., repeat "good" deals)
- better preparedness for negotiations (e.g., improved knowledge about trade promotion effectiveness and efficiency)
- improved productivity (e.g., reduced planning cycle by running simulations)
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| Decision Support, Inc. • P.O. Box 44706 • Madison, WI 53744 |  | | Phone: 608.833.1940 • Fax: 608.833.1943 • DSI@AnalysisSupport.com |
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