My answer highlights how TPO Planner uniquely enables what-if analyses regarding the variance of variables and constraints impacting and governing the productivity of trade promotion investments.
Trade Promotion Optimization considers the following variables:
- Non-promoted Retail Price (by product and customer with ability to specify seasonal variations)
- Non-promoted Demand Volume (by product and customer with ability to specify seasonal variations)
- Cost of Goods Sold (by product with ability to import from existing standard costing systems and/or River Logic’s Integrated Business Planning solution)
- Promotion Cost (fixed and variable costs including lump sum payments and off-invoice, bill-back and scan-down amounts, as well as promoted retail price)
- Promotion Performance (deal length, time frame for increased volume impact, time frame for forward-buy impact, volume lift index)
TPO Planner considers the following constraints:
- Promotion Budget (by customer and brand with ability to request incremental funds)
- Volume/Revenue Targets (by customer and brand with ability to specify minimum targets as ‘soft’ constraints while optimizing for profit)
- Promotion Rules (minimum and maximum frequency for all deal types, pre- and post-gap restrictions, seasonal validity, always/never promote together)
- Preferred/Blackout Time Periods (by customer, brand and product)
In the future, TPO Planner will also consider the following variables and constraints:
- Cross-promotion Elasticity (impact on base volume and lift indexes across multiple events, products, and customers)
- Capacity/Inventory Constraints (by product with ability to explore alternative sourcing options through River Logic’s Integrated Business Planner solution)
