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Promotion excellence in China – start with data centralization

| min Lesedauer
promotion excellence in China

Competition in the Chinese consumer market is fierce, making promotion activities the most common marketing lever. However, when it is run continuously, promotions start to lose their impact. The dilemma? Competitors are in full swing with their promotions and there is pressure to follow. Our experience with the Chinese market shows: to unlock revenue growth and generate flywheel effect you need a digital promotion system. 

To establish a sales analysis system, you need data. But as more and more Chinese companies turn their attention toward data, they are faced with three major challenges: 

• Key data is missing 

• Data granularity is too large 

• Data cannot be matched 

The result? They are unable to effectively track and analyze the input and output of their promotions.  

The main reason for this lack of data is that companies don’t have a clear management strategy or reasonable methods to evaluate the effectiveness of promotions. Instead, promotional data is fragmented and scattered in various departments or regional markets. 

What kind of promotion data is needed? 

Without a data system, you always look at the flowers in the fog. You rely too heavily on intuitive judgment and experience, continuously accepting a low level of output. This makes it difficult to conduct an objective evaluation based on conclusive and comprehensive data so that you can optimize the promotion guidance system. 

So, what promotion data is necessary? Although different industries will have more specific requirements, the following are key:  

  • SKU item details (daily non-promotion price, lowest promotion price limit, cost, etc.) 
  • Annual retail promotion plan: start and end time, specific promotion mechanism, etc. 
  • Year-round sales data: single-store sales data in various channels and corresponding price fluctuations (sell-in and sell out data) 
  • Promotion tracking: planned and actual dealer and retailer marketing expenses, actual price tracking, summary of consumer vouchers, etc. 
  • Market performance: competitors’ promotion price and market share change, etc. 

Data granularity should also be gradually refined from three dimensions: 

  • Time granularity: consistent with or smaller than the minimum cycle of promotional activities 
  • Product granularity: it is better to refine to an SKU level 
  • Sales outlets: try to select several representative retail outlets in every important channel to obtain key data. 

This allows you to accurately review the details of sales promotions and identify core problems. 

How to flexibly obtain key data?

It’s not easy and can even be impossible for companies to obtain high-quality but low-cost data. While sharing the best practices of various industries, we encourage companies to collect key data through cross-functional collaboration, including market insights, front-line sales, finance, supply chain, and even after-sales service departments. Then, the core department that analyzes the data will conduct data mutual verification and integration, forming a high-quality promotion database convenient for daily, rapid decision-making. 

Establishing digital capabilities around promotions is a process of creatively integrating the business information flow of all departments. It requires a strategy, rules, and the joint efforts of Sales, Marketing and Finance.  

Get it right, and you will significantly boost your profits. 

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