Trade spends forms ~15% of top-line of Consumer and Packaged Goods (CPG) companies and is a key lever to drive volume growth. SKU Sales volume for a CPG company is dependent on several factors including brand strength, MRPs, Channel type, weather, special occasions, promo type (Fixed/variable, price/volume) etc.
In the absence of well-established sales volume elasticities to these factors, trade spend allocation is mainly done through heuristics, often leading to under/over allocation in a lot of scenarios, resulting in missed opportunities both in terms of sales top line and trade costs.
Using advanced modelling techniques and leveraging 3rd party data sources on weather, special events etc., we have been able to quantify the sales elasticities to factors like MRP, discount type, retailer margin, weather etc. which can the be used for Territory SKU level trade spend planning and deployment. e.g. which SKU’s to increase trade spends, where to decrease etc. This approach has the potential to generate 5-10% savings in deployment of trade spends, while targeting the same sales volumes.
Our trade spend optimization solution suite has the following key features
- SKU Sales Forecast – Territory/ store cluster level sales forecast
- Elasticity – Sales elasticity with trade spends, MRP, discount type, retailer margin, weather forecast
- Optimization – Trade Spend Optimization for revenue maximization/ trade spend minimization
- Promo Planning – Fixed Vs Variable, Price Vs Volume benefits
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Sagacito® software consistently creates optimal recommendations, so your team always sells the right product at the right price to the right customer. We give your team a framework and guidance informed by data to help them become their most effective at the point of sale. We provide measurable customer insights that put you back in control of your pipeline, ultimately leading to improved sales margins and profit.
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Sagacito® Technologies Private Limited
5th Floor, WeWork Forum, DLF Cybercity
Phase III Sector 24, Gurugram