1. Business Economics
Promotional Analytics
Overview Trade spend pass-through
Promotional activity forms a key strand in many
companies’ strategy for success, and in the current Save 75p
Save 25%
tough trading environment, maximising the return on
2 for £1.50
trade promotion spend is of prime importance.
2 for £1
Therefore we have launched an interactive business Half Price
planning tool that is designed to help companies Bogoff
decide when they are doing the right thing in terms of 0% 20% 40% 60% 80% 100%
category, brand, product, channel, customer and
promotional mechanic. The above chart highlights the importance of bringing together data
from both the manufacturer and the retailer. The extent to which the
retailer passes on the discount in the case of a price promotion is
Incremental ROI critical to the success or failure of a promotion.
30%
25%
20%
15%
How is PromoPro used?
10%
5% There are two main options for using the system:
0%
-5%
-10%  We can carry out a one-off consultancy project to
-15%
-20% analyse data for specified periods, SKUs and retail
outlets, and report back to you on the results
achieved by the promotions;
 We can carry out a small project to configure the
The above chart, taken from a typical case study, shows how the
incremental rate of return on investment for the manufacturer from
system for your data, and then provide a business-
promotional spend varies according to the type of promotional wide licence (together with training and
mechanic in a specific channel. documentation) for you to use the system yourself.
What does PromoPro do? In either case, a typical configuration of the PromoPro
PromoPro helps answer a range of questions about system requires the following data:
promotional activity including:
 External data: Retailer sales data on value and
 Are promotions driving both shipments and retail volume, typically by SKU, retail outlet and week;
volumes?  Internal data: Shipment data on value and volume
 Which promotional mechanics work for which (together with any discounts) by SKU, retail outlet
product and channel? and week; promotional event data by SKU, start
 Do promotions drive long-term profitability for the date and end date, and trade rebates;
brand as a whole?
 How long and how frequent should promotions be Summary
run for which product and which channel? PromoPro is a fact-based decision-making system
 Are retailers passing on promotional discounts to designed to inform strategy on what promotions to run,
the consumer? when, and for how long, based on the historical
 Are promotions profitable for both manufacturers evidence of what they can achieve and deliver. The
and retailers? essence of PromoPro is to learn what works in what
circumstances in order to replicate it in the future to
 How much should I be spending on promotions for
maximise rate of return on promotional spend.
which brands and in which regions?
 If I plan to use a different promotional mechanic for For ease of maintenance and updating, the system
a SKU or retail outlet, what is the best estimate of automates the processing of data from various sources
the outcome? and then makes the results available in user-friendly
reporting and forecasting spreadsheet tools or slide
decks.
To find out more contact David Merrick at Business Economics Limited on 07714 456068 or david@BizEcon.com