Spar InfoTech, Inc.
DATA REQUIREMENTS FOR TRADE PROMOTION ANALYSIS
Certain data is required to generate an accurate baseline; with additional data being helpful to add to the quality of the analysis. The following is a summary of the types of data recommended.
The data falls into 5 groupings:
Sales data requirement is obvious. Less clear is the period of data. Only weekly data makes sense since promotions are run weekly. Weekly data is also essential for determining such numbers as how much of sales was trade/pantry loading.
Promotion data is used to determine when a promotion was being offered. Sometimes that is all a user has and can be used as a minimum level of data. Some of the more sophisticated models calculate the promotion dates from the sales data. Very often those models are more accurate in determining when promotions are run because historical data can have errors. The promotion data is the most complex data file since it can be expanded to include numerous measures of costs (e.g. discount, free goods, coupons, trade payments), type of promotion (e.g. off-invoice, free goods, on pack promotions, IRC’s), and marketing factors to evaluate why some promotions are more successful than others (e.g. level of discount, length of promotion. This file may also contain the results from evaluating the promotion.
Marketing Variables. Many types of initial analysis do not use this data. It is usually not necessary for the unsophisticated user as it requires an understanding of the factors that impact sales beyond seasonality, trend, and promotions. It also requires the collection of data and using that in a model. For example, if weather is a factor (e.g. soda, water, beer) then the historical weather data must be collected and built into a data file. This is often not something an unsophisticated user will do particularly if the value of the decisions arising from the analysis is not high.