Client Results

Financial Modeling

Optimizing Performance at the Shelf with Choice Modeling

A consumer packaged goods (CPG) company launched a new snack line and was looking to maximize revenue by optimizing their product mix in terms of product variants, prices, flavors, and packaging, while improving the overall configuration of the shelf at key retailers.

Getting the most bang for the brand’s buck on the product shelf.

LRW executed a consumer choice model design, building three individual models, one per product type. The respondent task was designed to simulate real-world shopping experiences, allowing respondents to make multiple purchase decisions. We linked the three models with market basket analysis that took into account individual purchase behavior and spending. The model allowed the client to optimize these configurations and maximize revenue and profit within the context of various retail situations, including competitive set and space, which varied by retailer.

The client was able to take some critical actions to improve profits and grow their brand:

  • Built financial models that optimized revenue and profit for each retailer
  • Recommended specific SKU mix depending on shelf size/space
  • Identified retailers with the greatest upside
  • Recommended price points for products across the line
Sophisticated Analytics

Sophisticated Analytics

Linked smaller models to create larger model that produced big financial impact

Products Not Flavors

Products, Not Flavors

Marketing efforts stressed power of the product lines, instead of individual varieties

Different Pricing Strategy

Different Pricing Strategy

Adjusted prices up and down to optimize both sales volume and profits

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