Executive Briefs

Promotion Forecasting

For executives involved with cross-functional planning who want to synchronize and leverage sales, marketing and supply chain data

Marketing teams are often sidelined from cross-organizational planning processes such as sales and operations planning (S&OP). In fact the “S” in S&OP was originally meant to stand for sales and marketing. That’s because it’s only by integrating marketing into cross-functional planning that supply chains become truly demand- or market-driven.

 

And yet in most companies this disconnect remains. Considering that fast-moving consumer goods companies invest 10-15% of of their gross revenues in promotions, advertising and other forms of “demand shaping” marketing activities, disconnecting these from operational reality is a waste. This makes it impossible to determine the impact or “lift” from promotions on the supply chain. It also becomes impossible to forecast how promotions will affect target service levels. In some cases the lost sales and reputational damage this causes negates the positive effect of promotions.