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Zero Based Promotion Planning 2025

Are you relying on last year's promotion plan as a template for your 2025 strategy, simply adjusting up or down based on previous outcomes? This common approach often leads to:

  • stagnant promotion effectiveness,

  • diluted profits, and

  • a gradual erosion of brand equity.


It is time to break free from traditional constraints with Zero-Based Promotion Planning (ZBP).

Promotion Justification

A first question - often overlooked - is about the role of promotions. Are promotions the right tool to develop demand in a sustainable way? And when it comes to planning of individual promotions, each time the question needs to be asked whether a slot merits to be taken. What is the objective of this particular promotion? The added value of each slot has to be specified and agreed upon, and support the overall company and category strategy. That is the core of ZBP. 

Examples of promotion-level objectives (not limitative):


Obtain key promotional slots and prevent competitors from taking them

Promotions to encourage shoppers to switch to a higher value-per-unit offer

+ short term share gain

- not sustainable


Promotions to attract new or infrequent shoppers or increase weight of purchase of existing shoppers

+ can give long term gains

- costly to achieve


Promotions to encourage shoppers to switch to a higher value-per-unit offer

+ adds to premiumization

- lower volume uplifts


Accept margin dilution in return for a sales volume increase

+ quick volume gain

- erodes base, margins

Traditional promotion planning, often based on last year's plans, may not align with the need for substantially improving (financial) performance. Zero-Based Promotion Planning offers an alternative, compelling organisations to justify every promotion anew in each budgeting cycle.

Strategic goal setting

Effective promotional planning begins with a comprehensive understanding of the role of promotions for brand, category, and customer development. This knowledge, coupled with the general category strategy, serves as the foundation for crafting a robust promotion strategy. While overarching objectives like market share, profitability, or sales growth are set at the strategic level, it is crucial to define granular objectives for individual promotion slots. These objectives extend beyond simply "increasing sales" and may include goals such as brand expansion, penetration growth, enhancing loyalty among existing customers, category expansion, driving retail switching to preferred, more profitable customers, and more.

Source of Business® 

Integrating ZBP with the Accuris Source of Business methodology transforms the promotion planning process. Companies can now evaluate each promotional activity not just for the quality of its sales uplift but also for its strategic alignment with identified growth sources. This dual approach ensures that promotional budgets are not only spent efficiently but are also directed towards activities with the highest potential for sustainable growth.

Overview of Zero-Based Budgeting

Zero-Based Budgeting is a financial strategy that starts from the premise that no costs are pre-authorized. Instead, every expense in the upcoming period must be justified from scratch or from a "zero base." This approach contrasts sharply with traditional budgeting methods, which often extend past budgets into the future with incremental adjustments. ZBP's power lies in its relentless focus on cost justification and efficiency, making it an invaluable tool for companies looking to optimize their promotional spending in alignment with strategic growth opportunities.


Example: Consider a scenario where a FMCG company traditionally allocates £5,000,000 annually towards promotional activities based purely on historical spending patterns. Under ZBP, each proposed promotional activity for the new fiscal year must justify its existence and cost, leading to a more strategic allocation of the budget. This might result in identifying that only £4,000,000 of the traditional budget actively contributes to strategic growth targets, allowing for £1,000,000 to be reallocated towards more impactful initiatives.

In-Depth Exploration of the Accuris Source of Business® Methodology

The Accuris Source of Business® methodology offers a comprehensive framework for analyzing and understanding the drivers behind sales growth. This analysis breaks down growth into five distinct sources: Cannibalisation, Competitive Brand Switching, Stock Piling, Retail-Level Switching, and Category Expansion. By applying mathematical modeling to each campaign and product, this methodology provides a nuanced understanding of how different factors contribute to sales growth, enabling targeted promotional strategies that leverage the most positive growth sources.


Example: A beverage company might use the Source of Business® methodology to analyze a recent promotional campaign. The analysis could reveal that a significant portion of the campaign's success was due to Competitive Brand Switching, with a smaller contribution from Retail Switching. This insight would suggest future promotions focus on strategies that encourage switching from competitors, rather than solely on swapping sales between retailers.

Overview of ZBP
In depth exploration of Accuris Source of Business(R)

Here’s an overview of how ZBP can be applied:

1. Justification of Promotional Activities:

Every promotional activity, whether it’s a price-off, a multibuy or a temporary introduction, must be justified from scratch. The historical performance of similar promotions is considered, but there’s no automatic rollover of past plans. What can be achieved with no promotions? Which promotions are must-win-battles? 

2. Cost-Benefit Analysis:

Each proposed promotional activity is subjected to a rigorous cost-benefit analysis. This involves estimating the expected increase in sales volume and comparing it with the cost of the promotion to ensure profitability.

3. Prioritization of Promotions:

Not all promotions are created equal. ZBP requires that promotions be ranked according to their expected return on investment (ROI). This ensures that the company’s limited marketing budget is allocated to the most effective promotions.

4. Flexibility and Responsiveness:

The FMCG industry is dynamic, with consumer trends and competitive actions changing rapidly. ZBP allows companies to be more flexible and responsive, as they can shift promo slots to where they’re needed most without being constrained by historical spending patterns.

5. Elimination of Waste:

By starting from zero, companies can identify and eliminate wasteful spending on ineffective promotions. This lean approach to promotion planning ensures that every promo slot is contributing to the company’s goals.

6. Encouragement of Innovation:

Since ZBP does not rely on historical allocations, it encourages marketers to think creatively and propose innovative promotional strategies that could potentially deliver better results than traditional methods.

In conclusion, zero-based budgeting can be a powerful tool for FMCG companies looking to optimize their promotional planning. It promotes efficiency, accountability, and strategic allocation of resources, which are essential for staying competitive in a fast-paced industry.

More information

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