Case study: Optimized spend on marketing promotions

BRIDGEi2i helps a major consumer package goods company optimize trade and consumer promotional spends to increase ROI.

Business Challenge

The client is a one of the largest consumer packaged goods company in India. Client’s food division wanted to understand impact of spend in various trade & consumer promotions on incremental trade revenue with retailers, convenience stores and wholesellers. The challenge was to segregate the simultaneous impact of price change, promotion, competitive actions as well the cross SKU cannibalization & halo effects. The relative variation of the same across various types and sizes of channels were also strategically important for effective allocation of budget.

BRIDGEi2i Solution

BRIDGEi2i built a hierarchical panel regression model to relate historical sales with spends in various categories of promotions as well as internal, seasonal and competitive levers.

Channel segmentation and building indices

• Outlet segmentation based on promo responsiveness and product assortment
• Designed smart indices for price changes, competition moves and cross-interaction between products
• Treatment of data for trend, seasonality, spikes, natural business cycles, outlier etc.

Statistical model to decompose impacts of various factors

• Modeling of volume sold against price, promotion, competition and cross-category interaction indices
• Decomposition of volume realized into base volume, and impact from promo, cannibalization & competition

Spend optimization

• Analyzing RoI of promotion spends based on incremental value
• Identify optimal promotion & price for each channel & segments

Business Impact

The analysis not only revealed hidden patterns around true effectiveness of various promotions spend. This also provided enough insights for differentiated promotion strategy across segments.

About BRIDGEi2i

BRIDGEi2i is an analytics solutions company partnering with businesses globally, helping them achieve accelerated outcome harnessing the power of data. BRIDGEi2i helps companies to BRIDGE the gap between INFORMATION, INSIGHT and IMPACT in their journey to institutionalize data driven decisions across the enterprise.