Title: Forecasting volumes for trade promotions in CPG industry using market drivers

Authors: Balasubramanian Kanagasabapathi, K. Antony Arokia Durai Raj, B. Shoban Babu, Mitul Shah

Addresses: Center for Knowledge Driven Information Systems, Software Engineering and Technology (SET) Labs, Infosys Technologies Limited, 44 Electronics City, Hosur Road, Bangalore – 560 100, India. ' Center for Knowledge Driven Information Systems, Software Engineering and Technology (SET) Labs, Infosys Technologies Limited, 44 Electronics City, Hosur Road, Bangalore – 560 100, India. ' Holistic Information Management Infrastructure (HIMI), Software Engineering and Technology (SET) Labs, Infosys Technologies Limited, 44 Electronics City, Hosur Road, Bangalore – 560 100, India. ' Infosys Consulting, 44 Electronics City, Hosur Road, Bangalore – 560 100, India

Abstract: Promotions are an integral part of the consumer packaged goods (CPG) industry. Anywhere between 30-40% of the sales volumes are achieved through various promotions. Promotions are instrumental in creating brand visibility and awareness. In this study, we attempt to analyse the impact of promotions with feature advertises, in-store display, temporary price discounts etc. Five different multivariate regression models have been developed to forecast the total sales of a product considering pricing and distribution variables. The performance of these models has been analysed by using syndicated data. Based on the results, it is found that the S-shaped (double-log) model has shown superior performance over the other models considered in this study.

Keywords: sales promotions; business forecasting; category management; S-shaped models; CPG industry; consumer packaged goods; market drivers; multivariate regression models; pricing variables; distribution variables.

DOI: 10.1504/IJBFMI.2009.028453

International Journal of Business Forecasting and Marketing Intelligence, 2009 Vol.1 No.2, pp.139 - 152

Published online: 17 Sep 2009 *

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