The document discusses various analytical techniques used to solve business problems in areas like new product launches, marketing, supply chain management, and sales. It provides examples of how techniques like gap analysis, concept testing, SKU rationalization, and inventory management can help companies optimize processes, minimize costs, and maximize profits. Key performance metrics are tracked to evaluate vendors, forecast demand, analyze competitors, and identify optimal pricing strategies.

1. Application of Decision Sciences
to Solve Business Problems
CPG Industry

2. Analytics
for CPG

3. New Product
Launches &
Innovation
Need Gap Analysis
It is an approach to identify the unmet needs of consumers, in which respondents are asked to envisage the
ideal brand or product, and then to rate various existing brands or products on key attributes. If there are no
existing brands measuring up to the ideal, there exists a need gap which could be a potential for a new
product.
It provides answers to critical business questions like:
 What is the consumer’s perception of the brand/product?
 What are the consumer needs yet to be catered to and are there competitors providing alternatives?
 Identify new consumer segments and market potential for a new product.
 What is the brand image in the consumer’s mind? If needed, how is it to be re-branded and re-positioned?
Satisfied needs Hygiene needs
Cleans thoroughly
High
Provides fresh breath
Whitens teeth
Has enjoyable flavour
Has anti-cavity action
Needs
Underdeveloped needs Unmet needs
Has anti-
bacterial action
Controls tartar Soothes gum
irritation,
inflammation and
Relieves bleeding
Low
teeth Strengthens
sensitivity enamel
Satisfaction
Low High

4. Product & Concept Testing New Product
Launches &
Innovation
Product & Concept Testing
Estimate the market potential of an idea or a concept, before actually developing the product based on
consumer response on multiple metrics like: uniqueness, believability, feasibility, price, desirability,
advantages, disadvantages, etc.
Only successful concepts pass to the next phase, thereby minimizing R&D and marketing costs.
Apart from estimating the market potential, it also helps:
 Identify critical success factors for a new product/service
 Estimate price sensitivity and purchase likelihood
 Bundle product/service features
 Identify potential consumer segments and assess competition
 Understand the purchase process and decision making
 Optimize advertising messages and improve promotional offers
Statistical techniques (like Conjoint analysis, Discrete choice modeling, KANO analysis) are applied on the
consumer responses collected.
PI Believability Uniqueness Value
Disclose technical
DEL DEL MNB MB
formula DEL = Delight
IND = Indifferent
TRNF = Turnoff
Sensory ingredients IND DEL IND DEL
MNB = Must not be
MB = Must be
HYG = Hygiene
Natural ingredients IND DEL IND DEL
Easy to apply IND HYG

5. Supply Chain
SKU Rationalization
The objective of SKU rationalization is to reduce the business complexities arising from a burgeoning product
portfolio, from managing too many items, product life cycles, consumer preferences, etc., while ensuring
consumer satisfaction. It is the process of re-looking at the product portfolio and optimizing it.
It starts with the parameters that form the basis—identifying and retaining high margin SKUs, high volume
SKUs, SKUs that have a higher shelf life and those which are in tune with consumer preferences.
After analyzing the cost drivers for each SKU, the portfolio can be assorted and rejected products can be re-
evaluated for further action (merge, sell, milk or kill).
SKU rationalization exercise is usually
supplemented with an impact study to
answer questions like: 100%
98%
 What is the revenue impact associated 80%
Cumulative Revenue
and how can it be minimized?
 What is the inventory carrying impact
and overall savings? SKU in order of
decreasing Revenue
 Will it result in consumer dissatisfaction? Top Mid Bottom Contribution
 What is the consumer reactivation rate
Recommended for Rationalization
on rationalized SKUs? Top Selling
Mid Selling
 Is the product seasonal? What is the time
Cumulative Revenue
Cumulative Revenue
frame to rationalize the category? 80%
85%
 What are the substitute products that
the consumer can be offered?

6. Supply Chain
Vendor Management
It enables organizations to control costs, strive towards service excellence and mitigate risks to gain increased
value from their vendor by:
 Minimizing potential business disruption
 Avoiding deal and delivery failure
 Improving operational efficiencies, controlling costs and planning of workforce and labor
It includes vendor identification, recruitment, monitoring, tracking and evaluating vendors on certain KPIs:
 Pricing: Competitive pricing
(comparable to other vendors), Partner Filtration Methodology & Process Flow
stability (low variance), accuracy,
advance notice of price changes.
 Quality: Compliance with purchase
order, conformity to specifications,
reliability (rate of product failures),
durability, support, warranty.
 Delivery: Time, quantity, lead time, Partner Strategic Fit Brand Equity Financial Health
Ability to
operationalize
Final Score Status
packaging, emergency delivery and Vendor 1 9 8 10 7.4 8.75 Pass
Vendor 3 10 9 8 7.4 9.00 Pass
technical support. Vendor 3 10 7 6 7.4 7.50 Pass
Vendor 4 10 10 8 10.0 9.50 Underleveraged
Vendor 5 9 7 8 7.4 7.75 Pass
Vendor 6 2 7 6 8.2 5.50 Risky

7. Supply Chain
Sourcing Strategy & Production Planning
Strategic sourcing continuously improves and re-evaluates the purchasing activities of a company. Sourcing
optimization helps evaluate different procurement inputs by considering supply market, specific supply chain
conditions, individual supplier conditions and offers alternatives to address the buyer’s sourcing goals.
It helps in:
 Assessing the supply market, the company’s spending and identifying suitable suppliers
 Optimizing production related sourcing decisions, concerning where to produce or source products,
based on a total supply chain cost analysis
 Selecting a suitable manufacturing site, optimal capacity utilization of plants and product allocation
among the different plants and distribution centers
 Strategic planning for manufacturing and inventory optimization
 Increasing manufacturing and distribution asset utilization
High
Competitive advantage? INSOURCE
Low
High
Demand Flexibility?
Low
OUTSOURCE
Capability of High Process maturity of High Strategic risk with Low IMPLEMENT
supplier supplier supplier OUTSOURCE
Low
High
Low
Actions Actions Actions
Ensure flexibility and penalty
Establish process monitoring clauses are established for Establish control need based on
Establish norms for product
measures, plans to product delivery, establish three secondary factors,
quality, process for transferring
continuously improve process alternate source of activity and develop appropriate
knowledge & monitor quality
and knowledge sharing across divulge as little proprietary contracting relationship type
tracking measures
teams information as possible. and negotiate contract

8. Supply Chain
Network Optimization
Network optimization helps in designing the optimal supply chain network with the lowest total cost
structure, given operational constraints. It uses statistical modeling to describe the transport network to be
followed. It helps senior management in making the most efficient use of resources while identifying the
most economical routes.
It aids in:
 Reducing transportation overheads and ensuring that the right product reaches the right location on
time
 Improving transportation mode selection, load consolidation and resource utilization
 Quantifying operational, financial costs of alternative networks and identifying scopes of improvement
 Ensuring reduced freight costs and increased operating efficiency
 Streamlining warehouse activities, thereby reducing time to dispatch and optimizing productivity levels
Project Area Identified Savings (to date)
Transportation 16%
Warehouse 12%
Supply Chain 3%
Total 15%

9. Supply Chain
Inventory Management
Optimal inventory management is an indispensable function to ensure un-interrupted product supply to
meet the changing demand. Stock out analysis helps in:
 Optimizing inventory and service levels by streamlining ordering processes
 Minimizing stock out—stock out can lead to loss of sales
 Handling overstock—overstock leads to increased inventory costs and costs to liquidate excess inventory
 Maximizing warehouse space utilization
Lead time is the time lag between when the order is placed, and the point at which stocks are available. The
buffer quantity to cover any unplanned excess requirement, taking into account delivery delays, is referred to
as safety stock. Providing for safety stock on top of lead time demand, will give the re-order point, which is
the minimal level of stock at which procurement should be triggered. Warehouse stock should never go
below the re-order point. Re-order point will assist in deciding what would be the best optimal order
quantity and when to place an order.
Stock Lot size
Reorder point is the minimum level of
stock at which procurement should be If the quantity of warehouse stock is less
triggered and quantity of warehouse than re-order point, there is shortfall
stock should never go below this point
Reorder
point
Safety
Stock
Lead time : It is the time lag between
Release date Availability date Time when the order is placed and the point at
Safety stock is the buffer quantity to
which the stocks are available; A lead
cover any unplanned excess requirement
time of 4 days implies that there should
taking into account delivery delays Replenishment always be stock for 4 days supply to avoid
stock-out scenario
lead time

10. Sales & Channel
Planning
Sales Tracker
Constant monitoring and tracking provides the sales team with accurate information related to market
dynamics, so that they can have an action plan before the next sales cycle starts. Also, it serves as the base
for formulating sales strategies. It:
 Identifies which products and SKUs are selling the most
 Analyses market trends and geographic buying patterns
 Evaluates growth potential for product portfolio (products, regions, markets)
 Identifies the epicenter for market share loss – Root-cause analysis
Interactive visual dashboards on market performance across geographies provide further assistance vs.
analyzing large volumes of data.
States
Salience
Zones share
Brand
0.2, 65.2
0.2, 68.7
States
States 1.0, 33.9
3.0, 50.5
Zones
Zone
2.5, 60.0 1.0, 61.9
States
YTD
States
YOY
0.3, 82.7
12.3, 73.3
States
MOM 8.3, 76.0
25.6, 61.3
10.9, 84.8
16.8, 79.7
% Salience, %Brand Share 1.0, 66.7
Increase in brand share 4.4, 78.1 6.5, 56.5
Decrease in brand share
No change in brand share

11. Sales & Channel
Planning
Competitor Analysis
Monitoring the performance of the brand versus key competitors on a continuous basis assists in:
 Detailed understanding of competitors’ portfolio, marketing and sales strategies
 Studying competitors’ response to any new strategy in place
 Evaluating the expansion and growth strategy of competitor brands across markets
Based on competitor assessment and their impact on brand’s share, the micro and macro level strategies are
outlined.
YTD 2011 Change in competitor brand strategy YTD 2012
20% 25%
Competitor brand Market share YTD 2011
Competitor brand Market share YTD 2012
18%
Delhi, 243.6
16% 20%
Har, 77.0 Delhi, 269.3
14%
Har, 76.2
12% 15%
Raj, 127.1
10%
Competitor Brand share: 4.4%
Goa, 238.3
Competitor Brand share : 4.0%
Ker, 164.1
Bih, 11.7
8% 10%
UP, 64.4
UP, 62.0
6%
Goa, 187.7
Oriss, 10.8
Pondi, 24.8
Raj, 36.9
Ker, 75.7
4% 5%
Mum, 66.7 TN, 173.5 AP, 213.6
Pondi, 9.6 Mum, 76.5
2% Mah, 41.9
Mah, 40.8 AP, 178.6
Kar, 60.1 Kar, 83.4
Dam, 6.9 Dam, 8.2
0% 0%
0% 5% 10% 15% 20% 25% 0% 5% 10% 15% 20% 25% 30%
Industry salience YTD 2011 Industry salience YTD 2012
High industry salience, High industry salience,
High competitor brand share Low competitor brand share

12. Sales & Channel
Planning
Sales Forecasting
A good demand forecast helps improve sales volume, cash flow and hence the profitability, by optimizing
inventory and by minimizing out-of-stock. Besides considering historical data, external factors like promotion,
seasonality, price changes, macro-economic conditions are also considered for more accurate forecasts. It
helps create better solutions for:
 Inventory Control: Optimizing inventory & service levels by streamlining ordering processes
 Minimizing Out of Stock: Out of stocks equal lost sales which can have a negative impact on sales
 Improving product freshness & warehouse efficiency: Too much inventory can result in excess “expired
inventory” that must be liquidated at or below cost, which is a cash flow drain
 Maximizing warehouse space utilization: As SKU proliferation continues, forecasting can help maximize
the use of warehouse space
 Capitalizing on peak sales weeks: Accurate forecasting ensures the right product mix to take full
advantage of operational capacity and peak market demands
Statistical techniques (like Moving Average, Holt Winters, Regression, ARIMA) are applied on historical data.
5.0 Actual Sales Forecasted Sales Base Line Sales
4.0
Million cases sold
3.0
2.0
1.0
0.0

13. Sales & Channel
Planning
Pricing Analysis
Pricing strategies are crafted to meet two key objectives: profit and revenue maximization. It helps in
identifying the best pricing strategy in a dynamic market, in response to the competitive scenario, by:
 Evaluating the brand’s own price elasticity and competitor brands’ cross price elasticity
 Identifying price gaps/thresholds which can result in significant share changes for the brand
 Identifying the right price gap/threshold with respect to the key competitors
35
Identify price threshold 70
Identify optimum price corridor
120 60
30 53.2 60
50
110
25 44.0 50
40
20 40 100
30.4
30
15 30
20.4 19.1 18.3 90
10 20
Optimum price corridor 20
5 10 80 10
0 0
$0.90 $0.99 $1.00 $1.09 $1.10 $1.19 $1.20 $1.29 $1.30 $1.39 $1.40 $1.49 70 0
Wk-10 ('09)
Wk-13 ('09)
Wk-16 ('09)
Wk-19 ('09)
Wk-22 ('09)
Wk-25 ('09)
Wk-28 ('09)
Wk-31 ('09)
Wk-34 ('09)
Wk-37 ('09)
Wk-40 ('09)
Wk-43 ('09)
Wk-46 ('09)
Wk-49 ('09)
Wk-52 ('09)
Wk-12 ('10)
Wk-15 ('10)
Wk-18 ('10)
Wk-21 ('10)
Wk-24 ('10)
Wk-27 ('10)
Wk-30 ('10)
Wk-33 ('10)
Wk-36 ('10)
Wk-39 ('10)
Wk-42 ('10)
Wk-45 ('10)
Wk-48 ('10)
Wk-51 ('10)
Wk-11 ('11)
Wk-14 ('11)
Wk-17 ('11)
Wk-20 ('11)
Wk-23 ('11)
Wk-26 ('11)
Wk-29 ('11)
Wk-32 ('11)
Wk-35 ('11)
Wk-38 ('11)
Wk-41 ('11)
Wk-44 ('11)
Wk-47 ('11)
Wk-50 ('11)
Wk-1 ('09)
Wk-4 ('09)
Wk-7 ('09)
Wk-3 ('10)
Wk-6 ('10)
Wk-9 ('10)
Wk-2 ('11)
Wk-5 ('11)
Wk-8 ('11)
to to to to to to
$0.98 $1.08 $1.18 $1.28 $1.38 $1.48
% ACV Brand A sales rate Price index vs. competition Volume share

14. Sales & Channel
Planning
Promotional Effectiveness
Promotions provide great value for brand through both incremental sales and increased brand awareness. It
is a technique of evaluating the extent of success of an activity using past data, by correlating the sales data
and marketing efforts. Main objective is to assess the impact and effectiveness of promotions.
Trade promotion optimization (TPO) utilizes advanced econometric modeling techniques to help brands
refine their promotion strategies, identify the right price and discount point that maximized sales lift and ROI,
and eventually help manufacturers enlarge their consumer basket and have a sustained impact on baseline
sales.
TPO helps companies:
 Allocate more for promotion sensitive brands and SKUs
 Collaborate with retailers and restructure their trade programs
 Design unique programs specific to a retailer/channel instead of following a “one-size fits all” approach
Simulator for effective allocation of trade spends

15. Sales & Channel
Planning
Real-time evaluation of promotions
Marketelligent has developed an in-house proprietary tool called PRISM, for continuous monitoring and
evaluation of trade and marketing promotions on a real time basis, using the test-control approach.
Identifying the control samples for each of the test group takes most of the time/effort. PRISM minimizes
the time required for the same and identifies the control samples on a real time basis, based on historical
sales trends and outlet demographics.
PRISM uses sales in test and control outlets, to calculate the lift factor for each or combinations of trade
marketing programs. Based on the lift factor, incremental sales and ROI are calculated for each activity. The
effectiveness of promotions can be compared at different levels – channels, categories, brands and markets.
Streaming Sales Data Decomposed Lift (µ)
fed weekly or
monthly as is µ Display
available
µ Feature
Marketelligent
PRISM
µ Consumer
Promotion Calendar fed
into the system µ TPR
periodically

16. Market
Performance
Market Mix Modeling
Marketing budgets as a percentage of sales typically vary between 4-10% for a CPG company. Given the high
investment, marketers would like to evaluate the returns from each media vehicle and optimize their
investments.
Market Mix Modeling (MMM) helps brand managers identify the right mix of advertising media, manage
channels and allocate marketing spend in a manner that not only provides the required sales lift but also
maximizes the returns on investment by media vehicles.
The model captures the following:
 Cannibalization, if any, amongst the portfolio of brands
 Impact of competition media activity
 Saturation spends for each media vehicle based on diminishing returns
 Decay impact, if any for each of the media vehicles - also called ad-stock
20 Decomposed sales into base line and incremental 900 14% Evaluate “Efficiency/ROI” from each media vehicle
18 800
12%
16
700
Media spend, ‘000 USD
14
Volume, ‘000 units
600 10%
Efficiency
12
500 8%
10
400
8 6%
300
6
4%
4 200
2 100 2%
0 0
May’09
May’10
Mar’09
Mar’10
Nov’09
Nov’10
Aug’09
Aug’10
Dec’09
Dec’10
Feb’09
Apr’09
Sep’09
Oct’09
Feb’10
Apr’10
Sep’10
Oct’10
Jun’09
Jun’10
Jan’09
Jan’10
Jul’09
Jul’10
Total Spends Magazine TV Daily
Baseline sales Online incr. sales TV incr. sales Daily incr. sales
Online spend TV spend Dailies spend

17. Market
Performance
Driver Analysis
Every organization needs to understand which product/service attributes have the greatest influence on the
consumer’s purchase decision. For instance, consumers might rate a personal care product based on its color,
scent, functionality, price, discount offer and so on. Driver analysis is a technique widely used to identify the
key consumer needs which translates to purchase behavior. It provides answers to critical questions like:
 What accounts for consumers’ proclivity to purchase the product?
 What causes consumers to switch to competitor brands?
 What is the core consumer segment that should be focused on?
Statistical techniques (Correlation, Multivariate Regression, and Structural Equation Modeling) are utilized to
identify the critical success factors of a brand which drives sales or revenue.
Purchase Intent Emotional response
Rational response
Recommended Makes me feel Brand image
brand 11% confident 9%
Brand attributes
Brand that keeps Feel young In
its promises 9% charge 15%
Experiential Non-damaging pathway Colour pathway
Knowledgeable Soft Shiny Hair Sensuous &
2% 4% Sophisticated 14%
Better Color Quality Conscious Perfect color
Experience 1% 4% 13%
Pleasant Natural Value for Money Range of Shades Gray coverage Intense, long
Fragrance 1% Ingredients 2% 0.4% 8% 1% lasting colors 5%

18. Market
Performance
Consumer Segmentation
Segmentation identifies homogenous consumer groups based on their needs, preferences, attitudes,
demographics, lifestyle measures (activities, interests, opinions and values) and behavior.
A mass marketing approach treats the market as a whole, while segmentation enables the business to target
different consumer groups by adapting its product and marketing mix to suit each targeted segment.
Segmentation results are leveraged to:
 Understand how the market is evolving in terms of changing consumer needs/preferences
 Identify the benefits sought by each consumer segment
 Improve the competitive position by focusing on the most profitable and sizeable segment
 Identify growth opportunities for niche
consumer segments
 Define the portfolio strategy for their
Healthy hair Natural Expressive Young subtle Young strong
category by ensuring minimal consumer Seekers enhancers Age defiers expressers expressers
segment overlap across brands Dark Brown Medium Brown Light Brown Medium Brown Light Brown
Based on the above, the marketing team Original color
Medium Brown Medium Blonde Dark Brown Dark Blonde Medium Brown
of hair
modifies their product/service offering and without hair
deploys the desired positioning and colorant
Light Brown Dark Blonde Medium Brown Medium Blonde Medium Blonde
marketing communication to reach their
consumer base.
Dark Brown Medium Blonde Dark Brown Auburn Auburn
Color of hair
with hair
colorant
(Aspired Chestnut Auburn Auburn Chestnut Chestnut
Color)

19. Market
Performance
Brand Equity Tracker
Brand equity tracker provides a framework for measuring the brand’s performance/health. This can be
assessed through consumer perception, which includes both rational and emotional aspects. Main criteria
for assessment — brand differentiation, brand relevance, the consumer’s knowledge of the brand and brand
image in the consumer’s mind.
Brand equity tracker defines the gap between what a brand wants to be and how a brand is actually
perceived by consumers, thereby giving a direction for branding strategy. Different components of brand
equity are depicted in the image.
Assessing brand value helps in:
 Identifying optimal measures to build
Keller’s Brand Resonance Pyramid
strong brand equity
 Demonstrating the effect of strong
Branding objective at each
brand equity – in terms of market share, Stages of brand development
stage
consumer acquisition, brand loyalty and
Resonance
other desirable outcomes
4. Relationships = Intense, Active
 Mapping the brand's equity against that What about you and me? loyalty
of key competitors Judgments Feelings
3. Response= Positive, Accessible
What about you? reactions
Performance Imagery
2. Meaning= Points-of-parity
What are you? & Difference
1. Identity= Salience Deep, Broad
Who are you? brand awareness

20. Contact Us:
New York, USA Bangalore, India
80 Broad Street, 5th Floor #451, 17th Cross, 2nd Floor,
New York City, HSR Layout, 4th Sector,
New York 10004 Bangalore, Karnataka, 560102
Buck Chintamani Kakul Paul
EVP, Strategic Initiatives & Business development Head CPG
buck.chintamani@marketelligent.com kakul.paul@marketelligent.com
+1-978-201-3068 +91-998-601-3596