Getting To Grips With Promotions

For CPG companies, promotions represent a major investment, and one which has risen in recent years. While many are keen to cut back on promotional activity to improve financial performance, they fear the sales and volume losses that would result.

Manufacturers can leverage and unblock the power of brands by optimizing promotional effectiveness, thereby driving revenue and profit growth simultaneously. For each $1bn of annual sales, a typical large multinational company might reasonably expect to generate a sustained $10m of annual profit improvement and $15m of annual revenue growth.

Yet most players' attempts to capture this large prize have had mixed results: Better use of data, systems re-platforming, and the introduction of promotional calculators have provided only partial solutions to this complex problem. This article is the first in a series that offers an overview of the four most common hurdles that must be cleared to transform promotional effectiveness. The forthcoming articles will demonstrate how to overcome them.

Getting To Grips With Promotions