Use ACNielsen’s renowned baseline methodology for highly
seasonal or heavily promoted products
ACNielsen baselines measure the expected normal volume for a product
in the absence of any promotion (feature, display or temporary price
reduction) within a given store for a given week. ACNielsen’s
baseline measure is considered an industry standard in terms of
its wide range of applicability for manufacturers, and now retailers,
in measuring the effectiveness of their trade promotion spending.
ACNielsen’s Cross Sectional Baselines help CPG marketers
understand the sales dynamics of highly seasonal or heavily promoted
products. Generally, these products have sales patterns that are
cyclical and present a challenge from a promotional effectiveness
measurement perspective. When seasonal effects are present, the
sales volume that is truly incremental may be overshadowed by
volume that is inherently realized due to these seasonal effects.
This baseline methodology separates any artificiality in data
by statistically adjusting baseline volume using sales patterns
in stores within a defined market/geography.
Cross Sectional Baselines can assist you in making informed
marketing and planning decisions.
Cross Sectional Baseline Methodology:
Straightforward approach:
- An estimate of base=5 in week four for store #1 is consistent
from a time-series perspective, BUT
- Volume DOUBLED in week four in stores 2 and 3, perhaps due
to the holiday
We can improve our time series forecast by applying a cross-sectional
adjustment of 2 to week four volume in store #1
Cross Sectional Baselines can help you:
- Track underlying health of a brand
(base volume) and compare it to its
competition.
- Identify temporary growth driven by
a promotion (incremental volume) or volume net of seasonal effects.
- Determine specific source of volume
and share gains or losses.
- Forecast demand/volume expected
during seasons or holidays, including floating holidays (e.g.,
Easter).
- Optimize mix: feature, display and
promoted price.
- Monitor competitive promotional
practices.
- Compare lift across brands, categories, weeks, channels
and price points.
