Case Study: Price and Promotion Strategic Plan for an $600 million+ Consumer Products Organization

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Client Description

Multi Category, $8 Billion + in annual sales

Background

  • Retail price and promotion set by individual sales rep.
  • No fact based decision making or strategic direction
  • Promotion investment rising
  • Local decisions creating price gap issues across brand sizes confusing consumers and retailers

Objective

Utilize analytical modeling to develop P&P strategies based on region and customer (EDLP –Hi-Lo) competitive frames and train Sales on P&P tactics that maximize volume and ROI

TPG Approach

  • Price-promotion models measuring impact on volume, of distribution, base price, depth of discount, frequency of trade tactics, and price competition
  • “Due-tos” providing a quantitative understanding of the impact of changes in distribution, price, and trade activity vs. year ago
  • Lift charts showing relative changes in volume by changes in price or promoted conditions
  • Account-specific simulations allow for “what if” scenarios to optimize everyday price, depth of discount, and frequency of trade tactics to maximize volume and control
  • Costs Analysis of volume response to competitive price changes allows for a determination of volume gained and lost to competition

Impact/Results

  • Identified a $10 million improvement opportunity in Trade spending while growing volume 5%

 

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