Promotions are activation changes intended to be temporary during the planning cycle.
Promotions can be used to trigger desired changes in shopper behavior (e.g., trial) or address other challenges, e.g., competitive threat, factory utilization.
To create a Promotion, you first need to click on '+Add Component', 'Promotion', and add a 'Name' and 'Description'. What you add is up to you e.g. 'Fizzy Pop BOGO / Summer BOGO across all 12 packs', but bear in mind this will be visible to the retailer.
Once you click 'Save' some new tabs will appear, and you need to click on the 'Calculations' tab and proceed to 'Add Calculation' to financially value your Promotion.
A new Calculator will appear, and it's here that you can choose the Type from the drop-down. The following Promotion Types are available:
TPR - A temporary reduction in the selling price of the supplier’s products to the retailer's customers on every individual unit purchased, e.g. 25% off, 50 cents off item
BOGO - A temporary offer to buy one of the supplier’s products and get another one free
BXGX - A temporary offer, other than a BOGO, to buy one or more of the supplier’s products and get another one or more free
BUY X FOR $Y - A temporary reduction in the selling price of the supplier’s products to the retailer's customers redeemed by purchasing multiple items, e.g. 2 for $2.50
Value Pack - A temporary increase in the content volume of the supplier’s product for the same cost price and intended retail price, normally delivered through a temporary SKU, e.g., 30% extra free
Cross Promotion - A temporary offer to buy one or more of the supplier’s brands’ products and get a discount on other brands’ products
Special Pack - A temporary SKU that includes a gift or a perk, which could include an additional SKU banded to the original SKU
Post-Purchase - A promotion where the shopper may receive a benefit - such as a gift, rebate, or prize - after or outside the purchase transaction, often through an entry, chance-based mechanic, or redemption process.
Feature Without Incentive - A temporary marketing effort to highlight or communicate a supplier’s product without offering any direct, tangible reward, e.g., store radio announcement for where to find a new product
LTO - A temporary SKU typically associated with a season or event, e.g., for Halloween, NFL, Olympics
Custom Promotion - Any type of promotion that you do not feel is adequately described by the other types offered.
Once you've chosen the Calculator Type, you need to select the SKU(s) this Promotion applies to. An SKU is the stock-keeping unit that denotes the exact product a retailer sells to its customers. You can either pick the individual SKU one by one or choose a defined group of your SKUs by picking the Sub-Category they all sit in.
With the SKU(s) selected, you now need to define the Weeks when the Promotion will start and end. You can select multiple groups of Weeks throughout the year for a Promotion that you run multiple times during the year.
You now need to capture any Fixed Investments associated with the Promotions. These are payments you make to the retailer so they provide support to increase the visibility of your products to the retailer's customers. Click on '+Fixed Investment' to add a new Fixed Investment, choose a Type from the drop-down menu (these are pre-loaded by the retailer), and select the weeks the Fixed Investment needs to run for, e.g., flyers for the first week to announce the Promotion and then an end-cap for the remaining 3 weeks.
You should then confirm the Store Volume Coverage %. This is the proportion of the SKU(s) base volume that this Promotion applies to. If the SKU(s) is in all stores, the Store Volume Coverage is 100%. If the retailer has 1,000 stores, all with similar ACVs (All Commodities Volumes), and the SKU(s) is only in 500 of them, then the Store Volume Coverage is 50%. But if 100 (i.e., 20%) of the retailer's stores deliver 40% of the combined ACV and the Promotion only applies to these 100 stores, then the Store Volume Coverage is 40%.
You can now start to complete the rest of the input fields to your chosen Calculator. These fields will vary according to the Promotion Calculator Type you chose.
Volume
Increase or Decrease % - The uplift or decline in volume of the SKU(S) involved relative to the base volume.
New Volume - The estimated annual new volume associated with the retailer stocking a new SKU(s) where there is no base volume history to derive the calculation from.
Redemption Rate % - The proportion of the retailer's customers that take advantage of the Promotion on the supplier's SKU(s) rather than buy at full selling price (for Promotions where that's possible), e.g., 75% of people purchase the BOGO but 25% just bought a single item at full price
Cost
Increase or Decrease % / $ - An increase or decrease in the supplier’s cost price to the retailer. It can be a percentage of the current cost price or an absolute amount and needs to be entered for a supplier cost price at the consumer unit level rather than for a shipping case.
New Cost $ - The supplier’s New Cost price to the retailer for the SKU(s) involved. This is the actual new cost, rather than a variance to the current cost inputted as a Cost Increase or Decrease % / $.
Selling Price
Increase or Decrease % / $ - An increase or decrease in the retailer’s selling price to their customer, in percentage terms or by an absolute amount, for the SKU(s) involved.
New Selling Price $ - The retailer’s New Selling Price to their customer for the SKU(s) involved.
Once you have completed the required input fields and clicked 'Save' the new Promotion will be created and valued.