Price reduction is a tool for companies to encourage the sale of their products. However, to generate greater effectiveness from promotional campaigns, there are several key questions that must be answered when designing and implementing promotional campaigns, as the author explains.
Many consumer-packaged-goods companies are stymied because they do not know how (or think it will be too hard) to make the leap toward much greater transparency on the true impact of promotions. The reality is that getting quick results is feasible. CPG companies are learning that the insights derived from advanced analytics capabilities enhance promotion performance—and the bottom line, as the authors explain.
For some organizations, the COVID-19 pandemic has created a crisis, while for others, it has created market opportunities. For all, it has forced quick and difficult pricing decisions. Price gouging, price promotions and discounts, and dramatic price increases and decreases have all occurred within the first months of COVID-19 reaching the European and American continents. Which tactic to execute, if any, can be revealed through thoughtfulness and analysis.
Trade promotions are a huge part of the consumer goods industry, despite the fact that the return on investment is often slim to none (if there is any profit at all). In this article, the author presents simple questions and analyses anyone can ask and execute to make better promotional decisions. Michael Stanisz is a Principal at Revenue Management Labs, where they help companies develop and execute practical solutions to maximize long-term revenue and profitability.