Shelley Fow Presenting

1. POST-PROMOTION ANALYSIS
AND PROMOTION OPTIMIZATION

2. SHELLEY FOW
SOLUTION ENGINEER – AFS TPM RETAIL/TPO
• 25+ years experience in consumer packaged goods,
holding positions in brand/product management;
promotional management; and pricing management,
with the last five years of experience on the software
side working with consumer packaged goods
companies on trade promotion management and
optimization/predictive analytics.
• Earned the Certification in Pricing through the
Professional Pricing Society in 2006.

3. Many companies are tasked with figuring out what they are
getting from their Trade Investment and how to improve it.
We continue to expect old practices
to take us to new places.
Over $200 Billion is spent annually on Trade Investment
representing over 23% of revenue for the average CPG company.
Disparate
Data
Silos
Excel
Spreadsheet
Dependency
Time
Consuming
Processes
Uninformed
Decision
Making

4. Why? Our business continues to change.
We must change if we want to continue to do business.

5. Copyright©2015TheNielsenCompany.Confidentialandproprietary.
5
LIVING IN A GROWTH-CHALLENGED ENVIRONMENT
Sources: Nielsen Strategic Planner & Nielsen Convenience Planner, Total U.S. – All Outlets Combined (plus Convenience), 52 W/E 12/25/10 (% change vs. year ago); Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52
W/E 12/31/11, 12/29/12, 12/28/13, 12/27/14, and YTD 21 W/E 05/23/15 (% change vs. year ago);
US DOLLAR SALES
FLAT OR DECLINING
45% of categories are
representing 40% of total revenue ($’s)
US UNIT SALES
-0.1 -0.2

6. Copyright©2015TheNielsenCompany.Confidentialandproprietary.
6
TRADITIONAL APPROACHES ARE FALLING SHORT
Source: Nielsen Promotion Benchmark Analysis: 2013 Q1 - 2015 Q4, Nielsen Scantrack: xAOC 2013 vs. 2010
MORE FREQUENT PROMOTIONS,
BUT TRADE EFFICIENCY IS ERODING
ADDING ITEMS TO THE SHELF
ISN’T WORKING
EXISTING ITEMS
($17.4B)
$18.7BNEW ITEMS
$ 1.3BNET GAIN

7. 7
Sales Volume
$
THE RESULT IS INCREASED PRESSURE
AROUND TRADE SPEND
Regular Price
• Own
• Own vs. Competitors
Trade Activity
(Own and
Competitors)
• Features
• Displays
• Price Reductions
$
Seasonality,
Store
Effects,
Others

8. Quantified Return on Trade
Investment
Harmonization of disparate data silos
(POS, Spend, COGs, Pricing, &
Shipment)
Post-Event Analytics to foster
data-driven decision making
Predictive What-If Scenario
Planning providing both
manufacturer and retailer KPIs
Event and Calendar Optimization
using constraint-based modeling
Trade Promotion Optimization
combines Post-Event Analysis with
Predictive Planning to maximize
the performance and
effectiveness of your trade
strategy.
Integrates with TPM Solution

9. POST PROMOTIONAL EVENT ANALYSIS – WHAT TO LOOK FOR?
 Base Volume
 Is it stable or has it gone up or down? Why?
 What is regular retail price? Has there been a change in price?
 Promotional Volume/Activities
 Was agreed upon promotional price executed? Do any promotional price thresholds exist?
 Was display activity executed and how well?
 Was feature activity executed and how well?
 Which activity(ies) drove the most volume for the cost associated?
 Are there any marketing activities taking place at same time that could have driven volume?
 Did these promotional activities cause cannibalization to other products in our portfolio?
 Are you promoting in the right accounts?
 What were your competitors doing during your promotional event?
 What have I learned from this analysis for future strategy planning/optimization?

10. BASE VOLUME – WHAT TO LOOK FOR/CONSIDER
 How are you looking at base volume? Using internal or syndicated data?
 Is it stable or has it gone up or down? Why?
 What is regular retail price? Has there been a change in price?
 When is the last time you analyzed your competition’s base volume and
regular retail price?

11. It’s starts with Base Volume!
Syndicated baselines models can
overstate baseline volume,
leading understated incremental
Revenue, Profit and ROI’s.
An accurate baseline is crucial to
determine promotional lift and
calculate the ROI and
effectiveness of a promotion.
Syndicated
Baselines

12. BASE VOLUME VS BASE PRICE

13. PROMOTIONAL VOLUME/ACTIVITIES – WHAT TO LOOK FOR?
 Was agreed upon promotional price executed? Do any promotional price
thresholds exist?
 Was display activity executed and how well?
 Was feature activity executed and how well?
 Which activity(ies) drove the most volume for the cost associated?
 Are there any marketing activities taking place at same time that could have
driven volume?
 Did these promotional activities cause cannibalization to other products in
our portfolio?
 Are you promoting in the right accounts?

14. You can’t analyze what you can’t see
TPM Data
with KPI’s
Key
Competitive
Promotions &
Merchandising
Promotion Price
and
Merchandising
Support
Consumer
Promotion
Events &
Impact

15. Promotional Pricing Strategy - Elasticity
EDLP
Divert trade investment away
from promotions to keep base
price low on an everyday basis
Options
Ability to leverage both base and
promotion, depending on
objectives and retailer’s category
strategy
High-Shallow
Reduce depth of promotional
discounts or increase everyday
price to recapture margin and
drive additional GP
High-Low
Invest in promotion to drive
volume and protect share by
increasing base price to fund
additional promotion
depth/frequency
Decision Framework for Price Changes & Promotional Discounts
Low HighPromotional Price Elasticity/Intensity
Low
High
BasePriceElasticity

16. Promotion Price Thresholds

17. Understanding What Trade Spend Drives the Most Volume
31
25
36
82 77 75
60
48
60
125
92
SEGMENT 1 SEGMENT 2 SEGMENT 3
TPR Only
Display
Feature
F&D
Total Weeks 11.9 13.9 11.7
TPR Only 9.1 9.8 10.5
Display & TPR 0.7 1.2 0.8
Feature & TPR 1.8 2.6 0.4
F&D & TPR 0.4 0.4 0.0
Ave. Weekly Base
Units
11,121,500 1,827,274 926,099
Base Support Weeks (L52 Weeks)
Comparison of Brand X at an 15% Promoted Price Discount
Feature outperforms Display in both lift and cost to run.

18. Are there any marketing activities taking place at same time?

19. Did promotional activities create cannibalization to your other
products or the competition?

20. What Accounts Are Most Responsive?
30 24 29 33
23
32 25
35 39 37 33 31 31
23
21
28
33
21
21
24
20
40 45
40
35 28
54
45
57
66
43
53
49
55
79 82
72
66
59
0
20
40
60
80
100
120
AHOLD
ALB/SFYSHAWS
ALB/SFYTOTAL
BIGY
DEMOULAS
FREDMEYER
HANNAFORD
KROGER
MEIJER
PRICECHOPPER
SHOPRITE
WEGMANS
WINCO
TPR Lift Additional Feature Lift
 Promotional Lifts @ 15% Discount – Brand X Segment 1
Total Weeks 21.5 35.1 16.4 32.8 16.2 6.7 3.1 10.2 12.4 11.1 11.0 2.5 10.7
TPR Only 15.6 6.9 12.2 23.0 7.6 5.7 2.3 9.9 12.3 3.7 9.5 0.8 6.6
Ad Only 3.99 14.36 2.77 7.47 4.67 1.00 0.00 0.31 0.00 4.72 1.27 0.00 0.00
Base Support Weeks (L52 Weeks)
Shift promotional funds to highly responsive accounts

21. WHAT WERE YOUR COMPETITORS DOING DURING YOUR
PROMOTIONAL EVENT?
Promotional Activity Own Product Competitor A Competitor B Competitor C
Total Unit Volume 63,408 12,019 6,577 38,251
Base Unit Volume 19,910 3,342 6,577 12,590
Incremental Unit Volume 43,498 8,677 25,661
Regular Price $3.99 $3.74 $4.99 $3.60
Promoted Price $2.99 $2.99 $2.99
Discount 25% 20% 17%
ACV Dist % 100% 100% 97% 100%
ACV Any Ad % 100% 99% 100%
ACV Any Display % 36% 3% 12%

22. INSIGHTS INTO THE COMPETITION

23. FUTURE STRATEGY PLANNING/OPTIMIZATION OF PROMOTIONS
 What is the most effective promoted price point?
 Is the money I am spending for display activity worth the investment and
being executed?
 How much volume is the money I spend on an ad driving?
 Which week is the best week to promote during the month?

24. WHICH PROMOTED PRICE IS BEST?

25. WILL A DISPLAY AND/OR AD GIVE ME A GOOD RETURN?

26. WHICH WEEK IN THE MONTH IS BEST TO PROMOTE?

27. Taking the steps we just discussed will ensure that
your organization is slowly, but surely working
towards better understanding and optimizing your
trade spend dollars to ensure maximum profitability
and ROI.

28. THANK YOU!
Q&A