Our client, a global leader in the beauty industry, faced multiple challenges with its promotion strategy.
The market was characterized by intense promotional activities, particularly during peak periods
Our client operated within a diverse landscape of categories, brands, and products, each requiring unique promotional strategies. The evolving legal environment added an additional layer of complexity, requiring our client to adapt to new requirements.
To address these challenges and seize opportunities in the market, our client aimed to establish a robust promotional strategic framework.
The key objectives included:
- Assessing the current promotional strategies employed by both the client and its competitors
- Defining a methodology for calculating the Return on Investment (ROI) of promotions
- Evaluating the effectiveness of past promotional events
- Deriving actionable promotional strategies and guidelines for the coming year
Additionally, our client sought to enhance the capabilities of its Revenue Growth Management (RGM) function and equip it with the right tools for successful implementation.
Developing a sustainable solution for ongoing promotional activities
Our task was to ensure that promotional efforts were aligned with overarching business objectives, contributing to a more cohesive and impactful promotional strategy.
We began with an assessment of our client’s current promotional strategy through targeted workshops. Here we engaged category leads, Revenue Growth Management (RGM), and commercial teams to understand our client’s existing promotional strategy. These collaborative sessions were instrumental in clarifying promotion objectives for each category, aligning them with overarching business goals.
To gain a detailed understanding of the competitive landscape, we used advanced analytics to study our client’s sell-in and sell-out data. This enabled us to benchmark and evaluate the promotional practices of both our client and their competitors, identifying areas for improvement and competitive advantages.
Integral to our strategy was the development of a robust methodology for calculating Return on Investment (ROI). This involved defining baseline settings and uplift calculations, accounting for various volume responses such as cannibalization, stock-up, and halo effects.
In workshops with Key Account Managers (KAMs), we collaboratively designed a tailored promotional plan for each category and customer. The emphasis was on ensuring alignment with the clarified promotion objectives and the overarching strategic goals of the business.
Along with the new promotional framework, our change management strategies ensured a seamless adoption process. We conducted targeted training sessions and initiatives to enhance the capabilities of the RGM function and other relevant teams. This comprehensive approach not only addressed immediate challenges but also equipped our client with a strategic, data-driven, and sustainable promotional framework, positioning them for success.
A data-driven approach to promotions
Our customized PowerBI tool empowered teams with real-time, data-driven insights, offering visibility into promotional performance and facilitating informed decision-making.
To facilitate seamless implementation and ongoing use of the new promotional framework, we introduced user-friendly tools, including a fully customized PowerBI tool. By incorporating advanced analytics and a robust ROI calculation methodology, our client now possesses the insights needed to make informed trade-offs and strategic decisions in the future, steering promotional efforts toward maximum impact. The final result: impact ranges from +€5m to +€6m incremental gross margin, representing 5% to 6% of the total promo spend, without loosing valuablee market share.
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