The impact of promotions on sales is usually short term and is assessed through analysis of baseline sales and sales gains, and metrics such as discount elasticity of demand, and discount cross elasticity of demand (cannibalization).
Baseline sales or base volume is the expected sales volume in the absence of short term causal influences such as promotions. It is a function of manufacturers’ marketing actions such as regular price, advertising and distribution, and other factors including competitor activities. Also as mentioned earlier, the baseline is influenced by the historical levels of promotions. If a brand has a history of recurring promotional activity, consumers lie in wait for the deals, leading to the lowering of the baseline.
Sales gain/loss or incremental volume is the sales volume above the baseline. It is the gain or loss in volume on account of short term causal factors, including temporary price reductions (discounts), displays, features, distribution fluctuations (stock outs for instance), seasonal factors and competitor activities, during that time period.
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In an analytics-driven business environment, this analytics-centred consumer marketing workshop is tailored to the needs of consumer analysts, marketing researchers, brand managers, category managers and seasoned marketing and retailing professionals.
Automated online solution for analysis of promotions.
Is marketing education fluffy too?
Marketing simulators impart much needed combat experiences, equipping practitioners with the skills to succeed in the consumer market battleground. They combine theory with practice, linking the classroom with the consumer marketplace.
The Plannogrammer is an experiential learning facility for category managers, trade marketers, and retailers in consumer markets. Ideally suited for hybrid learning programmes, Plannogrammer imparts hands-on training in the planning and evaluation of promotions and merchandising.
It supports a collection of simulation and analysis platforms such as Promotions and Space Planner for optimizing space and promotions, Plannogram for populating shelves and merchandising, a Due To Analysis dashboard that decomposes brand sales into the factors driving sales, and a Promotion Evaluator to evaluate the volume, value and profit impact of promotion plans.