Total volume sales

Aggregation of incremental volume and base sales. It may be decomposed into non promotional volume and promotional volume or into total baseline volume and gross incremental volume.

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Non promotional volume

Any units, litres, Kg, cases sold without a promotion.

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Promotional volume

Any units, litres, Kg, cases sold with a promotion.

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Total baseline volume

Volume that would have been sold without a promotion anyway.

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Gross incremental volume

Volume (units, litres, kg) that would not have been sold without a promotion and is therefore incremental

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Incremental volume

Additional sales as a result of a promotion (additional for the promoted product(s)).

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Baseline sales

Sales level that would have been obtained without the promotion.

Accuris models are designed to analyse sales impact of “events”. They decompose sales volumes into portions that are explained either through marketing activities, environmental changes or by the general market position of a brand. This means that we in effect simulates sales data in such a way, that sales are decomposed into a part reflecting sales that would have been realised without marketing campaigns (events), and other parts that reflect sales generated by those campaigns. The sales level that reflects the long-term market position is referred to as “baseline”. “Baseline sales volume” is defined as the level of sales a brand would achieve, if no sales-enhancing activities (advertising campaigns, trade promotions, or any other marketing mix events) took place. The Accuris models distinguish between the impact of a marketing/promotional event and other factors influencing sales. Variables controlled by a marketer are separated from variables that are beyond his control. The latter are called “environmental variables” and can include weather effects, generic growth of a retail channel, lifecycle effects, seasonality, etc. The Accuris models simulate baseline sales volume at the brand / channel / period level. Unlike other solutions, Accuris calculates a dynamic baseline. Each baseline value is calculated separately for each time period, brand and channel and reflects the specific environmental circumstances specific to these parameters.

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Non promoted baseline volume

The part of the base that is sold without promotional support.

 

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Promoted baseline volume

This is the portion of the baseline volume that was sold with a promotion, representing shoppers that bought the product on promotion but who would have bought it anyway.

 

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Total volume sales

Aggregation of incremental volume and base sales. It may be decomposed into non promotional volume and promotional volume or into total baseline volume and gross incremental volume.

 

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Non promotional volume

Any units, litres, Kg, cases sold without a promotion.

 

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Promotional volume

Any units, litres, Kg, cases sold with a promotion.

 

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Total baseline volume

Volume that would have been sold without a promotion anyway.

 

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Gross incremental volume

Volume (units, litres, kg) that would not have been sold without a promotion and is therefore incremental also simply referred to as “Incremental volume”.

Additional sales as a result of a promotion (additional for the promoted product(s)).

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Source of business ®

The Accuris Source of Business ® provides a complete insight in the origin, or “source” of sales volumes. It is a full decomposition of sales volumes, explaining how volume is attracted through marketing campaigns, and how it is lost because of competitive campaigns. It allows a user to manage campaigns in terms of their ability to steal volume from competitors and their ability to add net sales to a brand and to its category. Source of Business ® decomposes incremental volumes from a marketing event into five sources: cannibalisation, competitive switching, retailer switching, stock piling and short term category expansion.

Source of Business ® is registered Accuris trade mark that refers both to our sales decomposition concept and to our model. It is integrated in the Accuris AEP/System (Promotion effectiveness) and MME/System (marketing mix effectiveness) applications as well as being used in consulting and analytical projects. It helps to identify category growth levers, elasticity of marketing mix elements and the impact of any marketing event on a brand’s position and on the category. It allows a better allocation of marketing resources to generate net growth and minimise negative side-effects such as cannibalisation.

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Cannibalisation

Switching of sales as a result of an event, between products from the same Supplier/Manufacturer.

 

 

Competitive switching

Switching of sales as a result of an event, between products from different Suppliers/Manufacturers.

 

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Retailer switching

Switching of sales as a result of an event, between competitive retailers/channels/stores

 

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Stock piling

Sales that would have been realised after the event, pulled forward because of the promotion (forward buying) (also referred to as “time switching” or “time shifting”).

 

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Category expansion

Net (short term) growth of the category, as a result of an event, during the promotional period, not compensated by any of the switching (cannibalisation, competitive switching, chain switching, stock piling).

Unless otherwise stated, the following colour scheme is used to denote the Source of Business® components across the application.

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Financial concepts

Net Incremental Promo Revenue, or Gross Promo Profit = (Promotional Volume x Promo GP) + (Non Promotional Volume x Standard GP)

 

Do Nothing Profit = Total Baseline Volume x Standard GP

 

Fixed Promo Costs = Fixed Costs during the promotion. Also known as Gate fees, Lump Sums

 

Variable Promo Costs = Variable costs attributed to a promotion. Also known as Trigger Funding, Promo Accrual.

 

Gross Incremental Promo Profit = Gross Promo Profit - Do Nothing Profit - Fixed Promo Costs

 

Opportunity Costs = Cannibalisation Margin + Stockpiling Margin + Channel Switching Margin

 

Cannibalisation Margin = Average standard GP x Cannibalisation Volume

 

Stockpiling Margin = Average SKU GP x Stockpiling Volume

 

Channel Switching Margin = Average standard GP x Channel Switching Volume

 

Net Incremental Promo Profit = Gross Promo Profit - Do Nothing Profit - Fixed Promo Costs - Opportunity Costs

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Ratios

Gross Uplift % = Incremental sales / Base sales, expressed as %.

It is an Indicator of gross effectiveness of a promotion.

Note: Base sales volume used in formula above is the Base Sales calculated during promotions only.

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Net Uplift % = Net Incremental sales [i.e... total incremental volume minus cannibalisation, stock piling and retailer switching] / Base Sales, expressed as %.

It is an Indicator of net effectiveness of a promotion – i.e. the net impact of the promotion compensated for negative side effects, like cannibalisation, stock piling and retail switching

Note: Base sales calculated during promotions only

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Promotional Pressure = Percentage of total sales sold with a promotional support

This indicates the importance of promotion in a company’s sales.

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© Accuris 2021. Please reference this document 

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