Baseline Planning, Promotional Planning, Volume Planning

Baseline Sales Model

Promax factors baseline selling expectations into its planning calculations to allow for non-promoted baseline sales per customer per SKU.

The Promax Baseline Sales Factor allows planners to:

• incorporate efficient, accurate forecasting of base-line sales
• set growth factors by Brand, SKU, Chain, etc.
• determine the Promotional Gap and manage exceptions
• gather feedback on trends of the underlying demand
• determine expected lift on future promotions

Green Light Evaluation

Promax can be configured to evaluate a range of parameters that must be satisfied in order to confirm that a promotion is acceptable. Only then does the promotion receive the ‘green light’ to move from planning to implementation. A range of parameters can be combined, so that all criteria must be met for the promotion to be considered acceptable. Promax will highlight any unacceptable parameters, allowing the user to simulate the ROI on a multi-dimensional format to determine the optimal mix.

Examples of inputs used to assess ROI include maximum cost %, weeks cover, ratio of contribution to support, retailer gross profit %, and retailer gross profit % including fixed costs (co-op).

The Promax Green Light Evaluation process offers important safeguards in determining the optimum Promotions Plan:

• provides a view into promotion effectiveness before the promotion is run
• allows individual promotion and customer profitability analysis
• incorporates ‘BEST’ profit model to objectively report promotional effectiveness and efficiency
• establishes critical input to promotional planning and trade spend strategy
• encourages promotions with highest return and avoids re-running of inefficient promotions
• identifies which products to promote, which geographies need more aggressive campaigns, and the expected lift from each

Promax also uses a 4-box ‘BEST’ model to classify promotions into Hi and Lo Effectiveness and Hi and Lo Efficiency. This caters for the situation where efficiency and effectiveness may be mutually exclusive (where effectiveness is a measure of the additional sales achieved and efficiency measures the total cost of the trade spend on this promotion).  Learn more about the BEST model by downloading the “Whats a Good Promotion” White Paper.

Clash Alerts

The Promax Clash Alert facility runs in the background during planning sessions to notify planners when promotions they are modelling clash with those planned for particular customers or banners. Clash Prevention can also be set up to detect specified Promotional Types to avoid running conflicting activities at the same time.

Channel Partners

Promax facilitates collaboration with Clients or customers including communication of the promotional plan to retailers for review and approval. Once the promotional plans are prepared, Promax can present the information in the format required by all internal and external customers. Retailers, for example, are provided with industry standard ‘Deal Sheets’ for use in communicating promotional plans to Buyers.

The right promotional plan will increase store sales and increase basket size – a win/win for the Retailer and the Manufacturer. Promax provides visibility for the manufacturer to identify the promotions which are effective and efficient from both stakeholders’ perspectives.

One-number forecasting

Promax takes a collaborative enterprise approach to promotion planning. It provides a ‘one number’ forecast for the organisation  with a consistent data point to factor into operational plans for budgeting and resource allocation.

Promotion uplift derived from Promax forecasting models takes into account causal factors such as discounting, competitor activity, display, and advertising to deliver the most accurate predictions.

Company-wide planning visibility strengthens all links in the supply and demand chain (from sales and marketing to production, finance and customer service) driving continual process improvement. This leads to better inventory control, higher revenue and increased profitability.

The forecasting capabilities of Promax have been a core part of the application’s functionality for many years. A detailed description of best practice for the combination of activity based forecasting, statistical modelling and market intelligence to give a holistic approach to total volume planning for CPG companies is available by downloading the “Total Volume Planning with Promax PX” White Paper.  Also, please refer to the Volume Planning category under our Solutions menu.

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