Determining A&P investment levels in the 'next normal'

CPG - Gourmet Foods

 

 

The challenge

Determine ideal A&P investment to drive different levels of penetration, share and value growth for the Brand and sub-brands in the USA.  

Action

Both increasing consumer demand and distribution has led to significant growth for this brand in the US. The brand was keen to investigate ideal investment scenarios to continue the growth trajectory, especially in light of the Covid 19 crisis, which triggered significant changes in consumer demand, some short term, and others that will fundamentally change the opportunity for the brand (and category) moving ahead.

We applied machine learning and predictive analytics approaches to:

  • Size the opportunity for the Brand, taking into account the category and cross-category growth dynamics, as well as demand space growth
  • Understand the historical relationships between investment and performance, for both the Brand and competitors
  • Calibrate to current International crisis (COVID-19)
  • Set up an ongoing monitoring system, tracking the key underlying variables from the current crisis that impact Brand sales, enabling the Brand to calibrate business decisions iteratively.

Outcomes

Key questions answered with robust facts and analysis include:

  • What budget to reach Brand predicted net sales given the market dynamics?
  • What budget to capture the extra demand given the Brand’s playfield?
  • How the competition pressure could affect Brand investment given share of spend?
  • What could be the cost to reach innovation objectives?
  • What possible scenarios to envisage given the ROAS?

 

Let’s work together!