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How SPENDO helps to boost Trade Promotion Performance

By February 9, 2024No Comments
Astraa Trade Promotion Performance blog header

Top 5 critical business questions that bother every promotional planner!

1. Am I measuring the Trade Promotion outcomes correctly?

The most important part of success is to measure it correctly! CPG promotion outcomes are very sensitive to even slight calculation mistakes in base or incremental fields. A small measurement error can turn the ROI upside down.

Astraa, Spendo, Consumer Goods, Trade Promotion

Incremental Sales
SPENDO estimates the true incremental sales driven by the promotion event that accounts for a true statistical baseline and post-event pull forward of sales. This helps to provide “why” insights into whether the event was successful or failed (e.g. was executed during the same time as a competitor, impact of seasonality, and/or weather, and/or online consumer sentiment).

Baseline Sales
Establishing a credible statistical baseline for non-promoted sales + periods is very critical because this metric can generate a snowball effect in KPIs like ROI or gross profit since baselines are used to calculate incremental sales.
SPENDO eliminates any outliers that are caused by either special events (e.g. stock ups) or seasonality trends to provide accurate baselines.

2. Managing cannibalization during promotions.

Sometimes it is inevitable but it’s best to avoid this! It is unreasonable to expect that a promotion planner will remember all the products that get affected by the product at hand being promoted.
Business + AI-based solution from SPENDO brings the best of both worlds to alert the promotional planner of any cannibalization which should be kept in mind with every promotion if applicable.
SPENDO accounts for cannibalization driven by the promotion event that impacts the variants, sizes, brand, Manufacturer’s category, and the retailers’ category to show impact across retailers and channels.

3. Are my Trade Promotions optimized to achieve the desired goal?

Every promotion has a pre-defined objective. Either to improve brand image, get back good ROI, or cut down the competition.
SPENDO Recommends promotion plans that serve specific business objectives based on constraints (e.g. budgets, number of available events). SPENDO AI helps optimize the spending used for each of the events to maximize gains. (E.g. Spend $12K instead of $15K for promotions if you want to increase ROI from 30% to 45 %)

4. What if!

“Had I planned this promotion with lower spend, It would have resulted in better returns.” This is a common sentence once the promotional event is finished. SPENDO provides the ability to change Promotion plan conditions and simulate outcomes using AI based on historical event patterns based on observed events.

5. How to Boost existing expertise with the latest AI/ML tools?

Most of the predictive and prescriptive pilot projects for the CPG industry do not see the light of the day. There are multiple reasons why a promotional planner may resist the implementation. The most common observation is the “replace vs. assist” misunderstanding.

“AI will take away jobs!” this line is enough to scare the human workforce! The fact is, “AI boosts efficiency” like any other tool/software that a planner may already be using to enhance his/her productivity.

SPENDO has AI solutions ranging from pre-event analysis to post-event analysis. So while you are planning for a promotion you can run a what-if analysis by letting AI models alert you if there is an overspending or underspending scenario.
OR let AI generate a promotion plan based on the specific requirement of budget/ frequency of promotions to optimize a KPI like Gross Profit/ ROI or cut down the competition at the right time by optimizing incremental Turnover.

Costly infrastructure for implementation is another demotivating factor that results in a no-go!

SPENDO boasts of a unique cloud-based architecture that delivers insights without investing much in infrastructure or integration.

About Spendo

Spendo is the one-stop solution for all your “Trade Promotions” needs. Deployed in all geographies across the world with powerful features like:

  • Precise evaluation of trade spending effectiveness
  • Flexible views of data to support multiple business roles for any CPG Manufacturer
  • Accurate harmonization of data from multiple sources is needed to fuel insights
  • Effective and flexible visualization of business results through graphical and tabular dashboards
  • Secure Data & Cloud Application and a Modern IT Architecture
  • AI-based trade promotion optimization to spend right and get more outcomes from each Promotion

Spendo is the CPG brand of “Astraa, a Saama brand” based in Campbell, California, and has offices all around the world.

Farukh Hashmi

Being a Senior Data scientist, Farukh is responsible for designing the AI/ML solutions to provide maximum gains for the clients. As a thought leader, his focus is on solving the key business problems of the CPG Industry.

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