Trade Promotion Settlement Data
Settlement Data When a manufacturer plans a promotion, key pieces of information are recorded. Among this dataset are timing, volume and pricing data for the transaction between the parties. With Promax PX this data is comprehensive and records a range of dates which define the timing supply chain impact, the profile across the buy period, the dates when the promotion will be valid for the consumer and their profile of the consumption pattern during the promotion. Promax PX is also aware of the anticipated baseline either side of the promotion. When planning a promotion in Promax PX there is a choice of manually defining the uplift or using the predictive analytics to estimate the sales and volume as a result of the price point and other causals for the event.
When the promotion is completed there is a phase in the workflow for the settlement of the transaction. At this point the parties agree on an amount, related to the volume/sales on which the transaction is to be settled. This is a point in time where the quality of the information that is recorded is most pristine. The business is signing off to pay money! It surely would not be paying money if it did not agree with the parameters of the transaction.
During this settlement phase of the workflow, Promax PX provides the opportunity to capture and confirm key statistics about the promotion that then can be used in deriving or fine tuning to predictive models within the system. This is embedded in the “Evaluation” phase of the Promax TPM workflow
Creating Pseudo-scan Data
Where scan (POS) data is not available we can use the capabilities of Promax PX’s data capture during the Evaluation phase of the closed loop Trade Promotions Management cycle. This creates data that is aligned with the timing of the promotion, an accurate reflection of uplift, and a statistically sound method for deriving baseline sales. To the Promax PX database, this data conversion looks to the modelling environment, like scan data. In addition Promax PX also records any characteristic that the user may wish to capture that may have a causal effect on the promotion’s performance. As the process in Promax PX requires the Account Manager to focus on confirming the characteristics of the promotion in the “Evaluation” phase of the promotion management workflow, this causal information is of exceptionally high quality. Typically, they would confirm the supporting characteristics such as display or advertising support. Did the retailer adopt a promotion as it was planned? If the original transaction was based on an agreement to provide an aisle end, then did we get that? The Account Manager should know this information. This information is of far higher quality than survey data as it is verified from within your organization. Other data confirmations such as percentages of stores participating in the activity or competitor activity can also be recorded at this point, enriching the repository of data on which future multi-causal models can be created.
The scan data and pseudo-scan data can be embellished through this additional causal information providing a rich source for predictive analytics of Promax PX. The results are an impressive improvement in forecast accuracy achieving a better application of trade funds and a much more efficient supply chain.
Dealing with Indirect Customers
With Indirect Customers we have a need to forecast the demand and accruals for trade spend for each retailer even though we, as the manufacturer, do not have direct involvement with the supply transaction to the retailer. It passes through another party. In Promax PX we call this retailer and indirect customer. The challenge is to translate the demand from being wholesaler centric to a retailer level, while recognizing that the retailer can purchase form multiple sources. The manufacturer needs to resolve which proportion of the demand is being generated from the direct relationship and how much comes from the indirect relationship (s). Ultimately, we want to understand the value of our relationship with this indirect customer, considering the multiple sources on which it obtains the manufacturer’s products.
Through an analysis of the historical data we are able to define parameters in Promax PX that define the split between the wholesalers and the direct suppliers.