Abstract:
The performance of a product line by a major
non-foods Manufacturer had recently been driven by increased trade spending at
the cost of lower consumer equity. This marketing approach had weakened the
core franchises from a pricing and quality perspective relative to competition.
Management desired to find a way to permanently remove 15%-20% of trade
spending to shift back into consumer investment for the long-term health of the
business. A comprehensive revised trade approach was necessary to realizing
this long-term objective while at the same time minimizing the volume and
profit risk. As such, Cannondale Associates provided assistance to the
Manufacturer's management team in development of a roadmap and specific action
steps to permanently shift $XMM from trade promotion to equity-building
consumer initiatives and to bottom line profit.
Recommendation:
Cannondale proposed a number of targeted
action steps to reverse the Manufacturer's slide into promotional dependence.
These recommendations were based on a forecasting model developed by Cannondale
specifically for this project. While the tool allowed for a number of options,
Cannondale highlighted a roadmap with three major pricing changes and logistics
alterations to meet the goal of a $XMM reduction in the trade budget.
