We have been approached by a big International soft drinks company (APAC regional management team). The promo budget grew a few times in the past few years, reaching 25% of revenue. At the same time, Market Share dropped by 7%.
There needs to be more understanding of the ROI of price promo. The price/promo strategy needs to be clearly defined and executed. There is only a link with what competition is doing on the market other than overpromoting them.
Revenue.ai came on board, and this is what we did.
Platform was tailored for the customer, and our RGM consultants supported deploying the price/promo strategy.
A digital module was installed, ensuring daily scrapping of e-data from e-comm and matching those data with monthly reports from ACNielsen.
We installed an Alerting system to inform the customer immediately once the competition starts the promo.
We installed precision pricing and profitable mix modules to support and augment new price strategy development and fast execution.
Price/Promo simulation was embedded to optimize the promo budget and improve ROI
COE was installed to support RGM/Category management team in fast and precise decision making
Revenue.ai solution connected all the elements of price/promo activities on one eco-system, augmenting the decision-making process at every step. Price/pack analysis has been done with sensitivity analysis, allowing us to deploy new price/pack architecture and revise the SKU mix. The Promo strategy has been significantly optimized and has become more agile and proactive. The transformation resulted in a promo budget reduction from 57% to 43% in the first year of implementation and a market share turnaround from decline to growth (by 2%). Also, more efficient pricing resulted in Gross Margin improvement by 3ppts