August 29, 2023

Supporting sales and marketing strategic planning with a market simulation model

Analytical models to assist the strategic decision-making process

Supporting sales and marketing strategic planning with a market simulation model

At a glance

Challenge

In recent years, consumer goods markets like sugary drinks, alcoholic beverages, and tobacco have been affected by changes in usage laws and taxes, impacting brand and consumer behavior. With the launch of new product categories, the need for price and distribution strategy planning has increased. This case study is part of a project with a global consumer goods company to create a market model for an Asian market, providing strategic insights into brand and region-specific market share, volumes, and financial metrics like gross margin and EBITDA projections.

Solution

Several opportunities were identified to improve the planning process:

Process: A single-tool was developed to centralize information, parameterization, and validation, streamlining scenario exploration to reduce lead-time and increase market review frequency.

Intelligence: A predictive engine was created to estimate total market size based on prices, consumption trends, and population growth. Regional brand market shares were forecasted, considering local preferences and switching patterns within the product portfolio.

Analysis: Dashboards were developed to visually support strategic scenario analysis, helping senior stakeholders understand causality between strategic decisions and market outcomes.

Results

The project provided the organization with analytical models, which were vested by higher reliability and assisted the strategic decision-making process towards more accurate decisions.

In addition, the integrated market model tool radically reduced the time of generating scenarios, which released the team for higher-value tasks such as result validation and analysis of market insights.

Challenge

In recent years, consumer goods markets like sugary drinks, alcoholic beverages, and tobacco have been affected by changes in usage laws and taxes, impacting brand and consumer behavior. With the launch of new product categories, the need for price and distribution strategy planning has increased. This case study is part of a project with a global consumer goods company to create a market model for an Asian market, providing strategic insights into brand and region-specific market share, volumes, and financial metrics like gross margin and EBITDA projections.

Approach

Solution

Several opportunities were identified to improve the planning process:

Process: A single-tool was developed to centralize information, parameterization, and validation, streamlining scenario exploration to reduce lead-time and increase market review frequency.

Intelligence: A predictive engine was created to estimate total market size based on prices, consumption trends, and population growth. Regional brand market shares were forecasted, considering local preferences and switching patterns within the product portfolio.

Analysis: Dashboards were developed to visually support strategic scenario analysis, helping senior stakeholders understand causality between strategic decisions and market outcomes.

Results

The project provided the organization with analytical models, which were vested by higher reliability and assisted the strategic decision-making process towards more accurate decisions.

In addition, the integrated market model tool radically reduced the time of generating scenarios, which released the team for higher-value tasks such as result validation and analysis of market insights.

Our
AI-generated
summary

Our AI-generated summary

Our AI-generated summary

Over the last few years, several consumer goods markets (e.g., sugary drinks, alcoholic beverages, tobacco) witnessed laws that have changed both regarding products’ usage and tax, with significant impacts on brand and consumer behaviour. Further changes with the launch of new product categories will increase the need for price and distribution strategy planning activities.

The current case study was part of a project together with a worldwide consumer goods company to develop a market model for an Asian market, capable of generating strategic insights, including brand and region-specific market share and volumes, and several P&L metrics including brand gross margin and EBIDTA projections.

Several opportunities were identified to enhance the quality and efficiency of the planning process:

Process – Development of a single-tool centralizing information, parameterization and validation processes, thus streamlining scenario exploration to massively reduce lead-time and increase market review frequency.

Intelligence – Development of a predictive engine to estimate total market size according to prices, consumption trends and the natural growth of the population. Regional brand market shares were also forecasted, considering local preferences of product attributes and switching patterns within the available portfolio.

Analysis – Development of dashboards to support the visualization and analysis of strategic scenarios, providing visual aids to explain causality between strategic levers and market outcomes to senior stakeholders.

Our AI-generated summary

Our AI-generated summary

The project provided the organization with analytical models, which were vested by higher reliability and assisted the strategic decision-making process towards more accurate decisions.

In addition, the integrated market model tool radically reduced the time of generating scenarios, which released the team for higher-value tasks such as result validation and analysis of market insights.

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