Net Revenue Management (NRM) is a strategic approach designed to maximize a brand's profitability. There are 5 pillars or initiatives have been collectively driving businesses to an estimated extent of 66% across industries. I have implemented this in this case study in the FMCG domain. Let's dive into these initiatives one by one to understand the process:
🚀Brand Portfolio Pricing: This initiative determines or validates the price of a product based on the value it offers, customers' willingness to pay, the pricing strategy of the competitors, regions where the business is operating & the channels through which it is being distributed. In this project, I have calculated the market share as well as the Year-to-year sales distribution of the portfolio brands to understand the market.
🚀Mix Management: One brand might have more contribution to the net sales & another might drive more in terms of profitability. Mix Management shares this insight on when to push which product. In this project, I created a profitability matrix to map this distribution in terms of profitability & net sales contribution, drawing a comprehensive picture of how all the portfolio brands are performing.
🚀Price Pack Architecture: This analysis helps the business to shed light on the format, packaging & pricing based on the unique but targetted audiences or niches. In this project, I proposed a smaller 50ml shampoo pack for people who are traveling frequently because obviously, it's more likely that they would prefer a smaller volume to carry.
🚀Promotion Management: Promotions drive sales & marketing of the business. But the important thing is to maintain the effectiveness of these campaigns. In this project, I have calculated the ROI of 3 promotions to understand which one was the most effective. Turns out, sales are not the only factor to call a promotion successful as the subsequent cost is as important as the net sales.
🚀Trade Terms Management: Depending on the sales potential, some incentives & discounts also drive the net sales & profits. For example, incentivizing the customer with the higher potential drives the overall business. This is also a part of the NRM strategy.
Finally, I have wrapped up the project with a projection of how the NRM strategy contributed to the net sales with forecasting. This visual demonstrated what would be the organic net sales in the next year & to what extent NRM drives it.
