Mastering end-of-year promotions in the CPG industry

We’re halfway through the fourth quarter of 2023, and the first signs of the upcoming holidays are already popping up around us, especially in retail. For sales teams within consumer-packaged goods (CPG) manufacturers this means some of the most important promotions of the year are coming up.  

End-of-year promotions are critical to a CPG company’s success. They serve two primary purposes: to capitalize on holiday splurges; and to close any gaps between sales and targets. The success of these promotions depends on their timing and execution. In this blog, we will explore the strategic planning and execution of these promotions to maximize your company’s impact and bottom line. 

Planning holiday end-of-year promotions in CPG
 

Timing is Everything: 

The CPG industry is highly competitive, and in the holiday season, being the first to market can make all the difference. Holiday promotions in CPG, especially those tied to specific occasions like Christmas, can be remarkably effective. If your product is associated with Christmas traditions, for example, it’s likely to sell anyway. However, the goal is to encourage consumers to choose your brand over others or to buy more of your product because of the promotion. 
 

Strategic Goals: 

The key objectives of holiday end-of-year promotions in CPG are capturing a substantial market share, fostering brand loyalty, and maximizing sales without breaking the bank. After all, you don’t want to overspend when customers are already inclined to buy. 
 

Scenarios and Mechanisms: 

To plan successful holiday promotions in CPG, you need to explore various scenarios and mechanisms. Consider different strategies to ascertain the most effective approach for your brand or product. This could involve discounts, bundles, or limited-time offerings. Understanding your market and consumer behavior is crucial.

Closing gaps through promotions 
 

Target-oriented promotions: 

In cases where your business isn’t meeting its yearly targets, late-year promotions in CPG can be a game-changer. Ideally, when initially setting up a strategy, promotions are often planned from January to October, giving you time to accommodate extra volume in November or December. However, when considering gap closure promotions, a CPG needs to understand what such promotions will, or need to, contribute. Thus, organizations depend on reliable predictions and well-thought-out scenarios. 
 

Understanding gaps: 

You need to understand precisely where your business stands and how promotions will close any deficit. Whether it’s volume or value, strategic planning and execution can help you bridge these gaps. 
 

Leveraging Retailer Relationships 
 

Alignment with retailers: 

During the regular promotional calendar from January to October, alignment with retailers can be relatively straightforward: the promotions are usually part of an overarching collaboration structure. But late-year promotions, like those in November, are probably not unique to your organization. This means that, to secure a promotion slot at a retailer, you must demonstrate the value you are adding to their business.  
 

Retailer contribution and technology: 

Contribution to the retailer’s margin and market share plays a significant role in end-of-year promotions. Using software designed for this purpose can help you provide the retailer with a clear picture of the benefits they’ll gain from supporting your promotions. This collaboration can be mutually beneficial. 
 
 

Budgeting and cost management 
 

Cost-effective promotions: 

Depending on the goal of the promotion, preventing losses may be important. This requires a deep dive into budgeting and cost management. In other cases, a calculated loss might be expected or accepted. For example, the main purpose may be to push as much volume into the market as possible to block your competitor from gaining share. Whatever the main commercial driver behind the promotion is, it is always important to ensure that your promotions are delivering their goal and you’re not spending more than necessary to achieve your goals. 
 

Optimization and ROI: 

Ensuring that your promotional spend is used both effectively and efficiently is a critical aspect of end-of-year promotions. By closely monitoring the performance of your promotions and tracking the Return on Investment (ROI), you can make data-driven adjustments to maximize the impact of your holiday campaigns. This approach not only helps in preventing unnecessary overspending but also fosters a continuous cycle of improvement. Accurate ROI measurement provides insights into the success of your holiday promotions, allowing you to make informed decisions and allocate resources strategically, ultimately contributing to greater profitability in the highly competitive CPG industry. 

Empowering your end-of-year promotions in CPG 

Visualfabriq Trade Promotion Master is designed to streamline, optimize, and maximize trade promotion effectiveness and strategies. Here’s how it can empower your holiday promotions: 

• Data-driven decision-making: Visualfabriq Trade Promotion software provides a wealth of analytics, automatically combining all your relevant data sources. It allows you to gain deep insights into customer behavior, market trends, and the impact of past promotions. Leveraging this data, you can make informed decisions on which products to promote, when to launch the promotions, and what the ideal pricing strategy should be. 
   
• Scenario Planning: The software enables you to create and test various promotion scenarios. This is particularly valuable when planning holiday promotions, where the margin for error is minimal. With Visualfabriq TPM, you can simulate different promotional strategies, assess their potential impact, and select the most effective approach to meet your goals. 
   
• Retailer Collaboration: Late-year promotions often rely on strong retailer collaboration. Visualfabriq Trade Promotion Master offers a platform for effective communication and alignment with retailers. As the software is capable of combining all relevant data sources provided by customers, it provides you with invaluable insights that allow you to transparently share the contribution of your promotions to the retailer. You can present a clear and compelling case for why they should support your end-of-year promotions, highlighting the mutual benefits. This collaboration is crucial in securing retailer buy-in for your strategies. Additionally, with just one click, you can conveniently download a proposal in any format requested by the retailer, streamlining the communication and approval process. 

• Optimized Budget Allocation: To prevent overspending, Visualfabriq TPM assists in budgeting and allocating resources efficiently. You can set budgets for each promotion, track expenses in real-time, and ensure that your holiday promotions remain cost-effective. 
   
• Performance Tracking: Monitoring and measuring the performance of your promotions is essential. Visualfabriq Trade Promotion Management software provides the tools to track the Return on Investment (ROI) for each promotion. This helps you assess the success of your holiday promotions and make necessary adjustments for the future. 
   
• Flexibility and Agility: In a dynamic CPG market, you may need to adapt your holiday promotions to changing circumstances. Visualfabriq software offers the flexibility to modify your promotions in real-time based on emerging trends or market conditions, ensuring your strategies remain relevant and competitive. 
   
  

Takeaways 
 

End-of-year promotions in CPG industry are a dynamic and vital component of any company’s strategy. The timing, execution, and retailer collaboration are key. Successful end-of-year promotions require strategic planning, reliable predictions, and a clear understanding of gaps and opportunities. 

To stay ahead of the competition and make the most of your end-of-year promotions, it’s essential to start planning well in advance. In a competitive industry like CPG, your ability to navigate the end-of-year promotions landscape can make a significant impact on your brand’s success. 

For a deeper understanding of trade promotion management and to explore powerful software solutions, learn more about Visualfabriq Trade Promotion Master. Book a demo or download our brochure to discover how this tool can enhance your end-of-year promotion strategies and drive success in the CPG industry.