Understanding the financial, operational, and logistical impact of a promotion is one of the biggest challenges faced by many of our clients. Connecting the expected promotional volume to the monetary forecast, and the production and logistics plan can be critical to the smooth running of the operation. Accurate planning ensures reduced price, increased volume, increased variable cost and fixed costs are all considered and evaluated before committing to decisions.
By connecting demand and promotional planning with the financial planning module, your organisation can model its promotions before putting them into practice. This allows you to test volume, pricing, and product margin, including the impact of fixed costs to ensure the promotions you run are guaranteed to bring in a positive return on investment. The actual performance of promotions can then be tracked against the plan in a timely manner, to enable your business to respond. Analysis of previous promotional performance can be used to improve the accuracy of future promotions.
Scenario planning is often incorporated as part of the solution. The ability to model and compare variations, in price, product, or volume, allows your management team to understand the impact of these changes. Scenario planning may be in the form of sensitivity analysis, or specific known scenarios that require modelling. The application will allow for the scenarios to be captured and compared, and the potential responses to be evaluated.