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Success Story

Pricing and Promotion: Achieving 6% sales growth in a competitive market

Success Story

Pricing and Promotion: Achieving 6% sales growth in a competitive market


  • After lackluster sales in 2021 and 2022, one of the major players in a specific consumer goods category decided to review its optimal pricing and promotion strategy for Brazil.
  • Learn how a leading manufacturer identified the key factor driving slipping sales, turned around lackluster performance, and achieved 6% sales growth and 30% gross margin.

The story of the client

Our client, Manufacturer H, is US-based and caters to both individual and industrial consumers alike. Present in different categories, its main industrial consumer is the largest manufacturer in the world with several globally recognized brands – usually ranked first or second across many markets around the globe. And aside from being one of the global leading manufacturers in its industry, it is also one of the top three players in the Brazilian market. 

Locally, competition for the Brazilian shopper is fierce across these players, with brands competing for market strength, awareness, and consumer preference to boost sales. But the economic headwinds of the of the COVID-19 pandemic created a landscape of a declining category volume around 5% in 2022, greatly impacted by the main channel losing up to 7%, mostly due to price increases. 

Those increases indeed supported higher profitability but did not prevent Manufacturer H’s net sales loss and value share decline compared to the previous year. And even with the gross margin growth, this financial metric remained one of the main business challenges. 

With this scenario, Manufacturer H decided to revamp the pricing and promotion strategy for the company’s brands in the local market. And to achieve its goals, a joint effort of the client’s local teams and the global revenue management team was put in place, with the support of NIQ’s expertise and solutions for data-based decisions. 


The Challenge of Gross Margin Before Price & Promotion Analytics

Manufacturer H faced many business challenges, but the most important problem to solve was the gross margin. 

The teams determined that gross margin was the most important challenge to address in the price and promotions analysis. The reason was simple: in emerging countries, Brazil is in the top 5 markets globally for the industry. For Manufacturer H, it is also in the top 5 markets contributing to net sales and gross profit. But Brazil was not in the top 5 markets for gross margin results – not even the top 10, or close to it. 

This issue needed to be addressed and could not be dealt with by blunt price increases.


How the Manufacturer used Price & Promotion Analytics

Leveraging a powerful tool supplied with powerful datasets, NIQ’s team simulated a diverse range of scenarios and price changes. A deeper analysis paved the way for insights into optimizing promotion frequency, promotion depth, diverse margin targets, price indexes, and custom approaches by channel. This process enabled not only the review of potential results, but also ways to mitigate risks and the discussion of tradeoffs in each available option. Supported by the elasticity’s outputs from the study and financial data from the client’s profit and loss statements, the price increase simulations were pivotal in directing effective decisions. 

This allowed NIQ’s team to develop a clear path for improving gross margin based on clear expectations with better decision making.


The Results

After an intense process involving identifying business questions, deep dive analysis, consulting, and workshops with the local team, NIQ’s team presented a plan with recommended next steps for Manufacturer H’s global leadership team. 

Before implementing the team’s recommendations, Manufacturer H had a 24% gross margin for a portfolio segment in the category’s most important channel – a low figure indicating unhealthy performance.

After many possibilities exploring the Price and Promo solution elasticities and simulations results, Manufacturer H designed a bespoke price increase with a margin drive mitigating risks such as volume loss. The result? A 6% sales growth, a 30% gross margin, and a healthier margin mix across the portfolio.


Ready to achieve remarkable growth and maximize your profit margins?

Don’t miss the opportunity to embark your company on a transformative journey toward maximizing your sales, profit margins, and market dominance.

Unlock the power of price and promotion analytics for your business success with our data-driven decision-making approach so you can make informed choices, mitigate risks, and propel your growth trajectory.