On March 29th, EyeOn hosted an expert session on Promotion Planning for Belgian FMCG and Food companies near Antwerp

Luc van Wouwe   |   April 25, 2012   |   FMCG   |  

Industry experts and participants discussed challenges and best practices. Experiences and trends were shared and the maturity of promotion forecasting processes were explored. Some of the tendencies and  key insights :

  • Promotion pressure is increasing and becoming harder to manage. Promotion lead-times are getting shorter and there is a tendency towards more price-offs compared to other promotions types ( such as multi packs, displays, premiums, etc..) 
  • Retailers are more and more in the driver’s seat. Sales windows for most promotions last no longer than 1 to 2 weeks and due to retail competition the number of promotions is increasing. Supply chain co-ordination between  retailers and manufacturers is improving but still at an  early stage.
  • Forecast accuracy for promotions was acknowledged  to be significantly lower than for regular business except for manufacturers that have a push in strategy for promotions.
  • Most manufacturers consider multiple elements such as price reduction, type of campaign, visibility in the shop, seasonality and others in the promotion planning process, but in general only in a qualitative way.  Preloading effects, cannibalization impact on regular products and weather influences were recognized as the hardest elements to predict and forecast.
  • Manufacturers evaluated that their supply chains are better fitted today to forecast promotions but the approach mainly remains judgmental. Statistical models are commonly used for preparing the base forecast for all mature products. Product segmentation is not commonly used and tailored tooling for promotion planning is in most cases non-existing.

The importance of  statistical forecasting and tooling for promotion planning were highlighted. Ideas were shared on consumer forecasting, statistical forecasting, cross chain optimization and the use of event casting processes for forecast enrichments in promotion planning.

Luc van Wouwe

Luc van Wouwe

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