Test whether promotional lift recovers trade funding, post-promotion displacement, portfolio cannibalization, and fixed event spending.
About this analysis
The interactive compares the entered promotion with a no-promotion baseline. It separates normal volume from gross lift, then carries post-promotion shortfall and portfolio cannibalization into the contribution result. No external promotion benchmark is inserted into the calculation. For more information, visit our CPG pricing consultants page.
Promotion economics
The bridge compares incremental contribution created by promotional lift with the economics surrendered or displaced elsewhere.
Volume quality
Promotional-period lift is separated from purchases pulled forward from the recovery period and units displaced elsewhere in the portfolio.
Recovery threshold
The threshold calculations use the entered unit economics and event performance. No external promotional hurdle is imposed.
What the interactive shows
The entered promotion produces $21,850 of contribution above the no-promotion baseline after promotional funding, post-promotion displacement, portfolio cannibalization, and fixed promotion spend.
Gross lift is 30,000 units against a break-even requirement of approximately 23,478 units. The entered funding is $0.75 per promotional unit, compared with an estimated zero-contribution funding ceiling of about $1.02 per unit under the same event performance.
TRADE PROMOTION MARGIN RECOVERY TEST: ILLUSTRATIVE DEFAULT RECORD INPUTS Regular net revenue per unit: $6.50 Promotional funding per unit: $0.75 Variable cost per unit: $2.40 Normal weekly units: 25,000 Promotion weeks: 2 Actual promotional units: 80,000 Fixed promotion spend: $15,000 Recovery weeks: 2 Normal weekly recovery units: 25,000 Actual recovery-period units: 46,000 Cannibalized units: 3,000 Cannibalized contribution per unit: $3.25 COMPUTED POSITION Expected promotion-period units: 50,000 Gross promotional lift: 30,000 Expected recovery-period units: 50,000 Pull-forward units: 4,000 Net incremental units: 23,000 Regular unit contribution: $4.10 Promotional unit contribution: $3.35 CONTRIBUTION BRIDGE Incremental-unit contribution: +$100,500 Funding on baseline volume: −$37,500 Post-promotion displacement: −$16,400 Portfolio cannibalization: −$9,750 Fixed promotion spend: −$15,000 Net promotion contribution: +$21,850 RECOVERY THRESHOLD Break-even gross lift: 23,478 units Gross-lift cushion above break-even: 6,522 units Maximum sustainable funding per promotional unit: $1.02 Entered promotional funding per unit: $0.75 FINDING The entered promotion produces $21,850 of contribution above the no-promotion baseline after promotional funding, post-promotion displacement, portfolio cannibalization, and fixed promotion spend. Gross lift is 30,000 units against a break-even requirement of approximately 23,478 units. The entered funding is $0.75 per promotional unit, compared with an estimated zero-contribution funding ceiling of about $1.02 per unit under the same event performance. METHOD STATUS Management-entered promotion economics and volume assumptions. Expected promotion-period units equal normal weekly units multiplied by promotion weeks. Gross promotional lift equals actual promotional units less expected promotion-period units. Pull-forward units equal the positive shortfall between expected and actual recovery-period units. Net incremental units equal gross lift less pull-forward units and cannibalized units. Regular unit contribution equals regular net revenue less variable cost. Promotional unit contribution equals regular net revenue less promotional funding and variable cost. Incremental-unit contribution equals gross lift multiplied by promotional unit contribution. Funding on baseline volume equals expected promotion-period units multiplied by promotional funding per unit. Post-promotion displacement equals pull-forward units multiplied by regular unit contribution. Portfolio cannibalization equals cannibalized units multiplied by entered cannibalized contribution per unit. Net promotion contribution subtracts those effects and fixed promotion spend from incremental-unit contribution. Break-even gross lift equals total entered recovery requirements divided by promotional unit contribution when promotional unit contribution is positive. Maximum sustainable funding solves for the unit funding that would reduce net promotion contribution to zero under the entered event performance. No external promotional lift, funding, margin, or cannibalization benchmark is used.
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