Spar InfoTech, Inc.
Impact of Trade Classes
Background: A national Health and Beauty Aids Product had a mix of successful and unsuccessful promotions. Over time it was determined which promotions generated the best results and which the worse, and the better ones were repeated which appeared logical.
Analysis: One trade class accounting for only 20% of overall volume bought most of the incremental volume during certain types of promotions.
Recommendation: The promotion program be redesigned so that certain promotions could be offered to the one trade class and other types of promotions offered to the other classes of trade.
Net results: Promotion Profitability was greatly increased since the promotional monies spent outside of the one class of trade was no longer wasted and the specific trade class promotions yielded greater increased sales and profits.
Learning: Just looking at aggregate totals often hides critical information. This applies to market level promotions where certain retailers in the market drive the promotion success and national promotions where certain markets or class of trade drive the promotion success.