The Anatomy of A Sale

Sales in consumer goods is tracked through many KPIs—share, penetration, price, mix, and promotional uplift. Yet in post-promotion reviews one number often dominates: the sales spike during the deal. That headline uplift shows how much was sold, not where the sales were sourced or what they did to profit. The Accuris Source of Business® Framework closes that gap.

1.1 The Anatomy of a Sale: Moving Beyond Gross Uplift

Traditional profit and loss (P&L) assessments are structurally ill-equipped to evaluate the nuanced reality of promotional performance. They inherently group all promotional sales under a single revenue umbrella, failing to distinguish between effective investments that drive genuine growth and counterproductive activities that erode margin and value.¹ A conventional P&L views all sales generated on promotion as a positive revenue boost, a perspective that dangerously ignores the corresponding sales dips that frequently occur elsewhere in the portfolio or in future periods. This oversight leads to an excessively positive and misleading assessment of promotions, where genuinely unprofitable campaigns are mistakenly celebrated as successes.¹

The SoB methodology rectifies this by dissecting the gross uplift into its fundamental components. It provides the analytical scalpel needed to perform a true financial evaluation of any commercial activity—be it a promotion, a price change, or an assortment adjustment.¹ By quantifying the various positive and negative sources that constitute a sales event, the framework allows for a surgical analysis of performance. This moves the evaluation from a simple volume calculation to a sophisticated assessment of value creation versus value destruction. A promotion with a modest gross uplift but a healthy SoB profile—characterized by high gains from competitors and low profit erosion from internal sources—is strategically and financially superior to a promotion with a massive uplift funded by cannibalizing higher-margin products and subsidizing existing customers. This deeper understanding transforms revenue management from a discipline of volume chasing into one of strategic portfolio architecture, where the objective is to optimize the

net financial outcome of the entire commercial plan.

1.2 Positive Revenue Drivers (The Growth Engine)

The positive drivers identified by the SoB framework represent the true engine of sustainable growth. These are the sources of revenue that add incremental value to the business and the category, either by taking volume from rivals, expanding the total market, or increasing the value of each transaction.

• Competitive Switching (Competitive Steal): For branded suppliers in mature CPG markets, the primary advantage of running promotions is the ability to gain sales directly from competitors. Most categories exhibit low to no organic volume growth, meaning that one brand's gain is typically another's loss.¹ The Accuris benchmark study from 2022 validates this, revealing that approximately 68% of the sales uplift generated by a promotion is attributable to "competitive steal".¹ This statistic is not merely an interesting data point; it is a strategic imperative. It underscores that the CPG landscape is largely a zero-sum game where market share is fought for and won at the direct expense of rivals. Consequently, the decision to be absent when competitors are promoting is a decision to voluntarily cede market share. Proactively securing a presence in every relevant category promotion is essential to both defend existing share and capitalize on opportunities to acquire new consumers.¹

• Category Expansion: This represents the most valuable form of growth, as it signifies an increase in the total consumption within a category. Unlike competitive switching, which merely reallocates existing demand, category expansion creates new demand, delivering a non-zero-sum gain for both the supplier and the retailer.¹ Promotions that encourage new uses, attract new buyers to the category, or increase the purchase frequency or weight of existing buyers are key drivers of this source. For example, analysis of the UK grocery market shows that promotions can be a powerful engine for this type of growth. The Sainsbury's Nectar Prices initiative, for instance, was found to contribute approximately 11% of its promotional impact to overall category growth.¹ The ability to quantify this contribution through the SoB framework provides a powerful proof point in retailer negotiations, positioning a brand as a strategic partner in growing the entire pie, not just its own slice.

• Shopper Upgrading: This metric tracks the financial impact of shoppers switching to higher-value products within a brand's portfolio or the broader category. It moves the focus from pure volume to value creation, measuring the net change in shopper spending.¹ A successful premiumisation strategy, for instance, is not simply about selling more premium units; it is about generating a positive net "Upgrading Value" by encouraging consumers to trade up from standard-tier products. The SoB methodology provides the tools to track this explicitly, comparing the value of upgrading against the value lost from downgrading.¹ This allows a company to precisely measure whether its commercial mix is accretive or dilutive to category value, providing an objective measure of its premiumisation efforts. For example, a comparative analysis showed one brand (Brand A) generating nearly three times the upgrading value of a competitor (Brand B), demonstrating its superior ability to attract higher spending and add value to the category.¹

1.3 Negative Financial Impacts (The Profit Drain)

Juxtaposed with the growth drivers are the negative financial impacts—the hidden costs and inefficiencies that silently drain profitability from promotional activities. These sources represent the misallocation of trade investment, where discounts fail to generate incremental behavior and instead erode margin on sales that would have occurred anyway.

• Subsidisation: Arguably the most insidious profit drain, subsidisation occurs when a promotion is given to a loyal shopper who would have purchased the product at full price. It is a direct and unnecessary margin giveaway, rewarding existing behavior rather than incentivizing new behavior. The scale of this problem is staggering; the Accuris UK benchmark study indicates that, on average, 35% of all sales on promotion are subsidized.¹ The root cause is the prevalence of "unconditional" promotions, where any shopper, regardless of loyalty or intent, receives the same discount without any required effort or commitment.¹ This inefficiency is invisible in a standard P&L statement, which cannot distinguish between an incremental sale and a subsidized one. The SoB framework brings this cost into the open, quantifying the exact amount of margin squandered on rewarding loyalists for their existing purchase habits.

• Cannibalisation: This refers to the negative impact of a promotion on other products within the same supplier's portfolio. It is the cost of "robbing Peter to pay Paul." A brand manager might celebrate a successful promotion on one SKU, oblivious to the fact that the sales uplift was achieved by stealing volume from another, potentially higher-margin, SKU in their own portfolio. The UK benchmark data suggests that cannibalisation typically offsets 12% of the promotional uplift.¹ The SoB analytics platform makes this transparent, providing visibility into which specific products are being negatively impacted by a given promotion.¹ Without measuring this effect, companies risk optimizing for individual SKU performance at the expense of total portfolio profitability.

• Stock-piling (Time-Shifting): This occurs when shoppers take advantage of a promotion to buy more of a product than they immediately need, leading to a dip in their purchases after the promotional period ends. It essentially mortgages future sales, pulling demand forward rather than creating new, incremental demand.¹ This behavior complicates demand forecasting and can create a volatile cycle of sales peaks and troughs. According to benchmark data, stock-piling accounts for approximately 2% of promotional sales volume.¹ While it can be used strategically as a defensive measure to block competitors from a household's pantry for an extended period, it must be a conscious, measured choice, not an unintended and unquantified side effect of a poorly designed promotion.

Table 1: The Source of Business® Ledger
Source of Business	Definition	Typical Driver	Impact on P&L
Positive Sources
Competitive Switching	Sales gained from competing brands.	Head-to-head promotions; "Mini Price" offers.	Positive (Market Share Gain)
Category Expansion	New sales from increased category consumption.	Large quantity offers; promotions on new uses/occasions.	Positive (Incremental Revenue)
Shopper Upgrading	Shoppers switch to higher-priced/margin products.	Promotions on premium tiers; multi-buy on premium.	Positive (Margin Accretion)
Retail Switching	Sales gained from shoppers switching stores for a deal.	Retailer-exclusive promotions; loyalty card offers.	Positive (Channel Share Gain)
Negative Sources
Subsidisation	Sales to loyal shoppers who would have bought at full price.	Unconditional single-pack discounts on hero SKUs.	Negative (Direct Margin Erosion)
Cannibalisation	Sales stolen from other products in your own portfolio.	Deep discounts on a core product that has close substitutes.	Negative (Portfolio Margin Dilution)
Shopper Downgrading	Shoppers switch to lower-priced/margin products.	Deep discounts on value tiers, pulling from premium.	Negative (Margin Dilution)
Stock-piling	Shoppers buy for future needs, depressing future sales.	Deep discounts encouraging pantry-loading.	Negative (Future Baseline Sales Loss)

Section 2: Strategic Application of SoB for Proactive Revenue Growth Management

A granular understanding of revenue sources is not merely an academic exercise; it is the foundation for designing and executing a more intelligent, flexible, and profitable commercial plan. By moving beyond a monolithic view of promotions, a CPG company can transition from reactive, volume-driven tactics to a proactive strategy of shaping shopper behavior to achieve specific financial outcomes. This involves architecting a balanced portfolio of commercial activities, each with a clearly defined strategic role and a corresponding SoB objective. The tactical recommendations found across price-conscious and inflationary markets can be synthesized into a cohesive strategic playbook for both offensive growth and defensive profit protection.

2.1 Designing a Balanced Promotional Portfolio

The modern retail environment, characterized by diverse consumer needs and powerful retailer strategies, renders a one-size-fits-all promotional approach obsolete. There is no single "magic bullet" promotion that can simultaneously drive trial, reward loyalty, grow the category, and maximize profit. A successful commercial strategy is therefore a portfolio approach, where different promotional mechanics are deployed to achieve different objectives.¹ The SoB framework provides the critical missing link, allowing a company to assign a specific strategic role and a set of key performance indicators to each promotional type.

For example, a "Mini Price" offer on a small, entry-level pack size is not designed to be a profit engine. Its SoB objective is to maximize Competitive Switching and block share loss to private label or hard discounters, even if it operates at a low or negative margin.¹ Its success is measured by its ability to attract new users and defend against price-led competitors. Conversely, a "Large Quantity Offer," such as a multi-buy on a premium product, has a completely different SoB objective. It is designed to drive

Shopper Upgrading and Category Expansion by increasing both the value of the transaction and the amount of product in the consumer's home, thereby encouraging greater consumption.¹ Its success is measured by its contribution to net revenue and its ability to lock out competitors. By consciously designing a mix of such activities, a revenue manager can balance the need for short-term market share defense with the long-term goal of profitable category growth.

2.2 Maximizing Positive Sources: An Offensive Playbook

An offensive RGM strategy focuses on actively pursuing growth by maximizing the positive sources of business. This involves strategically placing bets to steal share, expand the market, and align with powerful channel trends.

• Capitalizing on Competitor Promotions: Given that 68% of promotional uplift is derived from competitive steal, the most significant offensive opportunity lies in direct confrontation.¹ The data is unequivocal: failing to be present when competitors are actively promoting is the fastest way to lose market share.¹ This principle dictates that securing participation in key category-wide promotional events is not optional but essential. A sophisticated execution of this strategy is exemplified by Coca-Cola's approach at Tesco. The company ensures it participates in the main category promotion with a highly competitive offer on a core product (e.g., Diet Coke) to secure its "rightful" share of the available switching volume. Simultaneously, it leverages its broad portfolio to run its own multi-brand promotion, featuring different pack sizes or brands to capture different shopper missions and occasions that may be missed by the main event.¹ This two-pronged approach maximizes its share of voice and share of basket during peak promotional periods.

• Aligning with Retailer Strategy: The balance of power in the CPG ecosystem has increasingly shifted toward retailers, who now often dictate preferred promotional mechanics, such as loyalty card-based pricing.¹ Rather than resisting these programs, savvy suppliers leverage them as a powerful offensive tool. Aligning with a retailer's flagship program, like Sainsbury's Nectar Prices or Tesco's Clubcard Prices, allows a brand to tap into a massive, pre-existing communication platform, effectively receiving significant media amplification for its offers.¹ The dramatic success of the Nectar Prices scheme, which drove promotional uplifts of over 400-500% for participating brands, demonstrates the immense power of this alignment.¹ Critically, SoB analysis of this success revealed that the growth was primarily driven by Sainsbury'sloyal shoppers increasing their purchases, rather than by attracting new shoppers from rival stores.¹ This indicates that such programs are exceptionally powerful tools for deepening engagement and maximizing share of wallet with an existing, high-value shopper base.

• Leveraging Large Quantity Offers: In an environment of heightened price sensitivity, large quantity offers—such as "2+2 free" or "buy 2 for £20"—provide a compelling value proposition that goes beyond simple low prices.¹ These promotions require shoppers to increase their immediate cash outlay but deliver an exceptional per-unit price, appealing to consumers looking to manage their budgets over the long term. Strategically, these offers serve a powerful dual purpose. Offensively, they driveCategory Expansion by significantly increasing the inventory of a product in a household, which often leads to increased consumption. Defensively, they create a formidable competitive moat. By loading a consumer's pantry, a large quantity offer effectively "blocks sales from your competitors for months," taking that household out of the market for the category and rendering them immune to rival promotions.¹ This tactic turns the potentially negative effect of stock-piling into a potent competitive advantage.

2.3 Minimizing Negative Sources: A Defensive Playbook

A robust RGM strategy is as much about protecting profit as it is about chasing growth. A defensive playbook focuses on systematically identifying and minimizing the negative sources of business that erode margins and destroy value.

• Combating Subsidisation: The 35% of promotional sales that are subsidized represent a massive, untapped source of profit recovery.¹ The antidote to this inefficiency is to move away from "unconditional" discounts and re-engineer the value exchange with the shopper. Instead of a simple, passive discount, effective promotions should require an action or commitment. Mechanics like "Buy two, get one free" or ladder promotions (where the discount increases with the number of units purchased) fundamentally change the dynamic.¹ They create a contract with the shopper: in exchange for a better price, the shopper must buy more than they originally planned (driving incremental volume) or upgrade their purchase (driving incremental value). This simple shift in mechanics ensures that the trade investment is funding desirable changes in behavior, rather than simply rewarding pre-existing intent, thereby drastically reducing the "free rider" problem of subsidisation. Single-unit price reductions, by contrast, are identified as the cause of maximum subsidisation costs.¹

• Mitigating Cannibalisation: The common practice of promoting a brand's biggest-selling "hero" SKU is often a strategic error. While it may seem like the easiest way to generate a large sales uplift, SoB analysis frequently reveals that this approach comes at a high cost.¹ It disproportionately rewards existing customers (contributing to subsidisation) and often cannibalizes sales from other, potentially higher-margin, SKUs within the brand's own portfolio. A more sophisticated, defensive strategy is to "de-escalate your main pack".¹ Instead of placing the deepest discount on the core offering, the promotional focus should shift to alternatives. This could be an entry-level pack to encourage trial, a flanker brand to capture a different consumer segment, a new flavor to generate excitement, or a different pack format suited to a specific occasion. This approach protects the full-margin sales of the core product while using promotional funding to achieve more strategic goals, such as attracting new buyers or growing incremental occasions, leading to healthier total portfolio performance.

• Avoiding Predictability: A highly predictable promotional calendar is a significant driver of subsidisation and promo fatigue. When shoppers know that their favorite product will be on a "half price" offer every four weeks, they become conditioned to never buy at the full price.¹ This behavior decimates baseline sales and turns full-price periods into sales deserts. The defensive countermeasure is to deliberately introduce variability and unpredictability into the promotional plan.¹ By alternating the timing of promotions, the specific packs on offer, and the mechanics used, a company can disrupt this "wait for the deal" mentality. This keeps the category dynamic and interesting for shoppers while protecting the integrity of the baseline price. Furthermore, tailoring offers to specific shopping occasions or evolving consumer needs makes the promotions feel more relevant and less like a routine discount, further enhancing their effectiveness and reducing the risk of conditioning.¹

Section 3: Architecting a Premiumisation Strategy with SoB Analytics

In any CPG category, a successful premiumisation strategy is the ultimate driver of long-term value creation for both suppliers and retailers. It involves systematically encouraging shoppers to move up the value ladder, increasing the average price paid per unit and enhancing overall category profitability. However, premiumisation is often pursued as a vague ambition rather than a precise, measurable strategy. The SoB framework provides the central nervous system for this endeavor, transforming the goal of "selling more premium products" into a data-driven, segment-specific plan of action. It provides the language and the metrics to build a compelling, evidence-based narrative that wins with consumers and, crucially, with retail partners.

3.1 The Premise: Proving Premiumisation Creates Category Value

A common misconception, particularly during periods of economic uncertainty, is that the majority of consumers will inevitably trade down to value-oriented options. While a segment of shoppers certainly faces financial constraints, data indicates this is not a universal behavior. Research suggests that approximately 74% of shoppers in the UK maintained the same purchasing power they had before the recent inflationary period.¹ This large cohort remains a prime target for premium offerings and can be encouraged to elevate their spending for superior products, especially when presented with a compelling offer.¹

The strategic challenge, therefore, is not a lack of consumer willingness to pay a premium, but the need to provide a tangible reason and a low-risk opportunity to do so. This is where targeted promotions on premium products play a critical role. They act as a bridge, allowing mainstream shoppers to experience a higher-value product at a reduced risk. The role of SoB analytics is to move beyond assumption and quantify the success of these bridging offers. By meticulously tracking the net financial impact of Shopper Upgrading versus Downgrading, the framework provides objective proof of whether a premiumisation strategy is successfully converting consumer willingness into actual, higher spending, thereby creating tangible value for the entire category.¹

3.2 A Segment-Based Strategy: The Coffee Playbook

A sophisticated premiumisation strategy recognizes that different products within a portfolio play different roles. The approach must be tailored by segment, with distinct objectives and measurement criteria for each tier. The coffee category serves as an excellent blueprint for this segmented approach, demonstrating how SoB analytics can be used to manage a portfolio for total value growth.¹

• Standard Segment (e.g., Mainstream Instant Coffee):

• Objective: The primary role of the standard segment is to defend the brand's base and consolidate its leadership position in the market. Profit maximization on these SKUs is a secondary concern.

• SoB Application: Promotions in this segment are strategic tools for driving foot traffic and defending against competitors and private label. The key SoB metrics to leverage in retailer conversations are Retail Switching and Competitive Switching. The analysis is used to demonstrate to the retail partner that this brand is an essential category anchor. The data-driven narrative is not about the promotion's profit, but about its ability to bring shoppers into the retailer's store specifically for this product, and to steal those shoppers away from rival retailers. This positions the standard-tier brand as a critical component of the retailer's own traffic-driving strategy.¹

• Premium Segment (e.g., Premium Ground Coffee or Beans):

• Objective: In the middle of the category, the goal is twofold: protect the existing value of the segment and actively drive upgrading from the standard tier.

• SoB Application: Here, the analytical focus shifts from traffic to value accretion. The core SoB metrics are Product Switching and, most importantly, the net Upgrading/Downgrading Value. The strategy involves designing promotions that encourage desirable switching behaviors. For example, promoting a larger pack of premium beans at a better per-kilo price encourages an existing premium buyer to spend more per trip. Alternatively, a carefully calibrated discount can serve as the perfect incentive for a standard instant coffee drinker to make the leap to the premium segment. SoB analytics precisely measure the net financial gain from these trade-up movements, providing a clear ROI on the promotional investment aimed at elevating shopper spending.¹

• Super-Premium Segment (e.g., Single-Serve Pods or Specialty Blends):

• Objective: This top-tier segment serves as the category's primary profit engine. The objective is to grow the total value of the category by attracting and converting mainstream shoppers to higher price points and new consumption habits.

• SoB Application: Promotions in this segment are surgical strikes designed to act as a low-risk entry point for the uninitiated. The SoB metrics used to build the retailer case are Category Expansion Value and Net Incremental Profit. The narrative presented to the retailer is powerful and strategic: "My super-premium brand doesn't just shuffle existing market share; it makes the entire coffee category more valuable for you. It does this by attracting higher spending per trip and creating new consumption occasions that expand the total market.".¹ Metrics likeDiscount Efficiency can be used to further prove that even when on promotion, these high-margin SKUs deliver a superior financial return to the retailer compared to promotions on lower-tier products. This transforms the conversation with the retailer from a transactional negotiation over margin to a strategic partnership focused on mutual category growth, with the supplier positioned as an indispensable category advisor armed with objective data.

Table 2: The Premiumisation Strategy Matrix
Segment	Commercial Objective	Primary Promotion Strategy	Key SoB Metrics to Measure	Retailer Narrative
Standard	Defend base; consolidate leadership; drive traffic.	Price-match hard discounters; "Mini Price" offers; participate in category-wide events.	Competitive Switching; Retail Switching; Incremental Volume.	"Our brand is a category anchor that drives traffic to your stores and defends the category against value players."
Premium	Protect value; drive upgrading from Standard tier.	Promote higher-value formats; multi-buys that increase purchase weight; "ladder" promotions.	Upgrading vs. Downgrading Value; Product Switching; Net Revenue Growth.	"Our promotions are designed to trade shoppers up, increasing the average basket value in your category."
Super-Premium	Grow total category value; act as profit engine.	Targeted discounts to attract mainstream shoppers; trial-driving mechanics on new innovations.	Category Expansion Value; Net Incremental Profit; Discount Efficiency.	"Our super-premium line expands the entire category, generating the highest net profit for you and attracting high-value shoppers."

Section 4: Case Studies in Strategic Revenue Sourcing

The true power of the Source of Business® framework is realized when its principles are applied to solve real-world commercial challenges. The following theoretical case studies provide a step-by-step illustration of how a CPG company would use SoB analytics to diagnose a problem, design a targeted strategic intervention, and measure the resulting impact on market share and profitability. These scenarios synthesize the concepts of portfolio design, offensive and defensive playbooks, and premiumisation into practical, actionable business plans.

4.1 Case Study 1: "Project Defiance" - Recapturing Market Share in the Hyper-Competitive Soft Drinks Category

• The Scenario: "FizzCo," a historic national cola brand, is facing a severe market share crisis. A key competitor, "PopCola," is executing an aggressive promotional strategy, while inflationary pressures are driving a growing number of consumers toward lower-priced private label alternatives. FizzCo's long-standing response has been a predictable "half price" promotion on its flagship 2-liter bottle. While internal reports show this promotion generates a high sales uplift, the company's market share continues to decline, and commercial teams are at a loss to explain the disconnect.

• The SoB Diagnosis: FizzCo engages Accuris to conduct a full SoB analysis of its promotional performance. The results are immediate and illuminating. The data reveals that the "half price" promotion, despite its impressive gross uplift, has a disastrous SoB profile that is actively contributing to the market share problem.

• Subsidisation is measured at 45%, significantly higher than the 35% industry benchmark.¹ The analysis shows that the primary beneficiaries of the deal are loyal family shoppers who would have purchased the 2L bottle anyway; the promotion simply allows them to stock up on their regular purchase at a deep discount, eroding FizzCo's margin without changing behavior.

• Competitive Switching is a mere 20%, a figure drastically below the 68% benchmark for effective promotions.¹ This proves the offer is failing in its primary offensive objective: it is not compelling enough to persuade PopCola drinkers to switch brands.

• Cannibalisation is alarmingly high. The deep discount on the low-margin 2L bottle is decimating sales of FizzCo's own higher-margin formats, particularly its 6-pack and 12-pack of cans, as shoppers substitute their planned multi-pack purchase for multiple discounted 2L bottles.

• The SoB-Informed Strategic Response: Armed with this granular diagnosis, FizzCo's revenue management team designs a new, multi-faceted promotional strategy aimed at correcting each identified weakness.

• Tackle Subsidisation & Cannibalisation: The team immediately de-escalates the promotion on the core 2L bottle.¹ The "half price" offer is replaced with a less deep "2 for £3.50" multi-buy mechanic. This forces shoppers to commit to a higher cash outlay to receive a discount, which inherently reduces subsidisation and makes it a less attractive substitute for the can multi-packs.

• Drive Competitive Switching: To directly counter PopCola and appeal to price-sensitive shoppers, FizzCo launches a new "Mini Price" offer: an aggressive 80p price point on a new 500ml single-serve bottle.¹ This product is strategically placed in high-traffic impulse locations like front-of-store coolers to maximize visibility, encourage trial among competitor loyalists, and defend against private label on a key price threshold.

• Block Private Label & Lock in Loyalists: To secure its high-value family shopper base, FizzCo introduces a "Large Quantity Offer" on its 24-can multipack: a "Buy 2, Get 1 Free" deal.¹ This mechanic delivers a highly competitive per-can price to effectively combat private label value propositions, while simultaneously loading the pantries of its most loyal consumers, taking them out of the market for over a month and insulating them from competitor offers.

• The Measured Outcome: A post-implementation SoB analysis confirms the success of the new strategy. The revised plan dramatically improves the quality of FizzCo's revenue sources. Subsidisation on the core pack is reduced by over 15 percentage points. The new single-serve bottle generates a competitive switching rate of over 60%. The multipack offer drives a measurable increase in category expansion and locks in loyalty. The net result is a halt to the market share decline and a sustained gain of 1.5 share points over the following six months.

4.2 Case Study 2: "Project Elevate" - Improving Profitability in the Snacking Category

• The Scenario: "Munchies Inc." is the undisputed volume leader in the potato chip category, but its financial performance is a growing concern. The company's promotional ROI is consistently negative, dragging down overall profitability. The root of the problem lies in its overly simplistic and highly predictable promotional plan: the flagship "Classic Salted" family bag is on a deep "50% Off" promotion every four weeks, without fail, across all major retail partners. The sales team defends the strategy, pointing to the massive volume spikes it generates.

• The SoB Diagnosis: An SoB analysis paints a starkly different picture. It reveals that while the promotion is successful at moving units, it is a financial disaster that is actively eroding the value of the entire snacking category.

• Subsidisation is rampant. The analysis confirms that shoppers have been perfectly conditioned by the predictable promotional calendar.¹ Sales data shows deep troughs in the weeks leading up to the promotion, as consumers simply wait for the inevitable deal. The promotion is not driving incremental consumption; it is merely concentrating existing demand into discounted periods.

• The promotion is causing massive Downgrading. The SoB data shows a strong negative correlation: when the "Classic Salted" bag is on promotion, sales of Munchies Inc.'s own premium "Kettle Cooked" line plummet. Shoppers who might have otherwise purchased the higher-margin premium product are defaulting to the cheap and easy "Classic Salted" offer. The net effect is a significant reduction in the average revenue-per-kilo for both Munchies Inc. and its retail partners.

• The SoB-Informed Strategic Response: The RGM team uses the SoB analysis to build a case for a radical overhaul of the promotional strategy, focusing on profitability and category health over raw volume.

• Break Predictability & Reduce Subsidisation: The first and most critical step is to make the promotional calendar unpredictable.¹ The rigid four-week cycle is abandoned. The deep "50% Off" deal is eliminated and replaced with a less aggressive and less frequent "Save 75p" offer, immediately improving the baseline margin.

• Incentivize Upgrading: To reverse the trend of downgrading, the team introduces a new promotion focused exclusively on the premium "Kettle Cooked" line: "Buy any 2 bags, Save £1.50".¹ This mechanic is strategically designed to encourage shoppers to explore the different flavors within the premium range and requires a higher total spend to unlock the discount. It directly rewards the desired behavior of upgrading, shifting the promotional investment from funding downgrading to funding upgrading.

• Align with Retailer Objectives: Munchies Inc. proactively presents the SoB diagnosis to its key retail partners. They use the data to show how the old strategy was eroding the retailer's own category value. They position the new strategy as a joint business plan to "re-premiumise" the snacking aisle, using the Upgrading Value and Net Incremental Profit metrics from the SoB dashboard to provide a quantifiable forecast of the mutual financial benefits of the proposed changes.¹

• The Measured Outcome: The strategic shift yields remarkable results. Over the next quarter, Munchies Inc. sees a 5% decrease in total promotional volume but achieves a 10% increase in net promotional profit. The Upgrading Value metric shows a net positive swing of €2M across its key accounts, providing concrete evidence to retailers that the new strategy successfully encouraged shoppers to spend more in the category, validating the joint plan and strengthening the strategic partnership.

Section 5: Conclusion: A Blueprint for Sustainable, Profitable Growth

The pursuit of revenue growth in the consumer goods sector is at a critical inflection point. The traditional methods of measuring success, anchored by the deceptive simplicity of gross promotional uplift, have been exposed as insufficient and often misleading. They encourage a relentless chase for volume that can mask deep profitability issues, reward inefficient spending, and ultimately erode brand and category value. The detailed analysis presented in this report demonstrates that a more sophisticated approach is not only possible but essential for navigating the complexities of the modern market.

The Accuris Source of Business® framework provides this new blueprint. It fundamentally reframes the objective of Revenue Growth Management from simply selling more to a strategic imperative of selling smarter. By deconstructing every sale into its constituent sources, the framework provides the critical intelligence needed to understand the true quality and profitability of revenue. It makes the invisible costs of subsidisation, cannibalisation, and downgrading visible and quantifiable, allowing them to be managed and minimized. Simultaneously, it highlights the true engines of value creation—competitive switching, category expansion, and shopper upgrading—enabling businesses to focus their investments on activities that generate sustainable, profitable growth.

This transition requires a significant shift in mindset and methodology:

• From Tactical to Strategic: It necessitates moving away from a reactive posture of matching competitor deals and fulfilling retailer requests, toward a proactive approach where every commercial decision is a deliberate choice designed to shape shopper behavior and achieve a specific financial outcome. The promotional plan becomes a portfolio of strategic tools, not a list of recurring discounts.

• From Volume-Centric to Value-Centric: Success is no longer defined by the height of the sales peak during a promotion, but by the net incremental profit generated across the entire portfolio and the positive impact on long-term category health. The focus shifts from revenue-per-week to revenue-per-consumer.

• From Adversarial to Collaborative: Armed with objective, granular data, suppliers can transform their relationships with retailers. Conversations evolve from transactional negotiations over margin to strategic partnerships focused on mutual growth, with the supplier acting as a data-driven category advisor.

Mastering revenue growth in the 21st century is an architectural challenge. It requires the careful design of a commercial structure built on a solid foundation of data, with every component—every price, every promotion, every product on the shelf—serving a deliberate purpose. The Source of Business® framework is the architect's essential toolkit, providing the diagnostics, the metrics, and the strategic guidance to build an engine of growth that is not only powerful but also profitable and sustainable for the long term.

Works cited

1. NamNews - Accuris - Five Promotion Strategies To Win Back Share In 2024.pdf