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Assisted OTC consumer division of large pharmaceutical company in understanding the effectiveness of its trade promotions spending

Case Study Summary

An over the counter consumer division of a large pharmaceutical company sought Archstone's assistance in understanding the effectiveness of its trade promotions spending (10% net sales). The client had poor visibility as to whether the tactics being used across channels / customers were driving profitable sales. This lack of consistent analytic approach and good data quality limited the clients' ability to measure trade promotion effectiveness.

The Client

OTC consumer division of a large pharmaceutical company.

The Challenge

Assist client in understanding the effectiveness of its trade promotions spending and increase visibility as to whether the tactics being used were driving profitable sales.

The Solution

Archstone Consulting developed a set of Analytic Frameworks based on key trade promotion effectiveness questions (such as "what is the overall profitability of trade promotions to the Company?"). Archstone assessed process, organizational and systems capabilities and prioritized improvement opportunities for trade promotion planning and management. Archstone also assisted the Trade Planning and Promotions Team in measuring historic trade promotion effectiveness and in developing guidelines for future planning. Assessed gaps and quality issues to improve trade analytics. Finally, Archstone developed and implemented training program.

The Results

Archstone estimated that the trade spend profit improvement was approximately $8MM, and implemented a phased trade promotion effectiveness improvement roadmap. An ongoing promotion evaluation process was instituted, supported by a database used for historic event analysis as well as a set of analytic frameworks to address trade promotion effectiveness questions. Archstone completed an analysis of historic events, leading to recommendations for future planning. In addition, Archstone created a technology roadmap which provided advanced tools for trade promotion planning and management, and developed a comprehensive set of documents and communication materials to support trade planning, management and evaluation of planning process.

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