Key Capabilities of JDA® Promotions Optimization, powered by Manugistics®:
- Real-time, consumer-driven promotion simulation, optimization and comparison
- Scenario analysis to evaluate various promotional events
- Calculation of halo and cannibalization effects both within and across categories
- Embedded analytics that evaluate promotional effectiveness and forecast accuracy
- Understanding of the total demand impact of a promotion and seamless integration with JDA’s Supply & Demand Optimization solutions to ensure inventory is balanced with promotional plans
Consumer goods manufacturers heavily depend on promotions to achieve their revenue objectives. Millions of dollars are spent each year to run promotions with their customers. While promotions are a major operational and revenue driver for consumer goods firms, manufacturers struggle to understand which promotions are profitable and which are not. This uncertainty leads to millions of dollars misspent on the wrong type of promotions or wasted because there is too much product in one location and not enough in another. Promotions are also a critical driver for the supply chain because inventory must be available to meet the increase in demand that results from these activities. Given that there are major revenue and cost impacts from promotional activities, consumer goods firms need a solution that determines the best promotions to run while also understanding their subsequent total impact on demand.
JDA Promotions Optimization (Promotions) identifies optimal promotional campaigns, so that retailers can shape demand and achieve their merchandising goals and objectives. The solution employs advanced statistical methods to predict the results of a promotion at various levels of segmentation, such as store or channel. JDA Promotions Optimization then recommends which promotions to run (including the types of products and the types of incentives), the optimal promoted price that maximizes profitability, and the most effective marketing instruments that should be used to advertise the promotion to the target market.
Using an intuitive, web-native interface, JDA Promotions Optimization enables users to determine promotional objectives and set the criteria to be evaluated. Once initial factors have been determined, users run promotions optimization to predict the impact that the set promotional factors will have on revenue, margin and unit volume.
Our solution offers robust scenario management capabilities that enhance the optimization process and further refine the promotions planning process. An unlimited number of scenarios can be run to compute vital factors such as revenue/profit impacts, halo effects, cannibalization and post-promotion dip effects. This iterative process of optimizing various scenarios promotes planner effectiveness and ensures that all important factors are considered when promotions are reviewed and when optimal promotions are selected.
Promotions is often used in conjunction with JDA® Demand, powered by Manugistics® so that the calculated lift from the promotion is fed back into the forecast. Thus, the effects of the promotion are synchronized with the supply chain so that the right amount of product is available to meet the expected lift. Promotions to Demand integration is a best practice that drives consumer goods companies to create a one-number forecast that drives the entire supply chain.
