SITUATION
A $1B CPG manufacturer was losing market share to niche and global competitors despite elevating its trade promotions from 15% to 20% of gross revenue. Instead of driving the anticipated volume lift, these added promotions eroded margins and exposed the lack of net price realization tracking or driver-based gross profit analysis. Unable to quantify which promotions truly generated incremental value, leadership sought a unified, enterprise-ready solution to integrate scattered data sources and guide smarter pricing and promotional investments.
OBSTACLES
- Fragmented Data & Limited Visibility: Multiple ERP and syndicated data feeds were not consolidated, forcing manual processes and incomplete performance snapshots.
- Unexplained Margin Variances: No framework existed to break down profit swings by price, volume, mix, or cost, leaving finance teams in the dark on root causes.
- No Scenario Analysis: The company lacked the tools to test hypothetical pricing or promo changes—or to anticipate competitor moves—and see the projected KPI impact.
- Weak Net Price Realization: With few guardrails on trade discounts and promotional depth, actual prices often undercut planned levels, resulting in chronic margin leakage.
ACTION
Partnering with Revify Analytics, the manufacturer built a holistic RGM Analytics platform that unified ERP, syndicated POS, and promotional planning data. A Net Price Realization module tracked planned vs. realized price, surfacing discount outliers. Driver-Based GP Decomposition revealed which levers (price, volume, mix, cost) impacted margins most. Critically, Scenario Analysis enabled teams to simulate revenue, margin, and share changes under different pricing or promotional moves – including own pricing and promotional investment scenarios, competitor price cuts or new product launches. Revify’s Promotional Effectiveness Module identified each event’s true ROI, guiding the reallocation of trade spend toward higher-impact promotions.
RESULTS
Within a year, the manufacturer increased gross profit by 8% and improved trade ROI by 15%. Enhanced visibility into margin drivers, tighter discount controls, and proactive scenario modeling also led to a 6% gain in market share. Equipped with real-time insights, the company established a pricing-focused culture that systematically maximizes promotional efficiency and empowers insights-driven responses to competitor actions vs. knee-jerk, tactical pricing reactions.
