4P’s Of CPG Business

Though sometimes companies believe that only a few functions would benefit from analytics and a few wouldn’t – this isn’t actually true. Most functions in the CPG business can be benefitted by analytics. A study by IBM found that CPG companies that use predictive analytics can achieve a 9% reduction in supply chain costs, and another study by Capgemini found that CPG companies that use advanced analytics can achieve a 4-5% reduction in the cost of goods sold. And there are a lot of other studies that would benefit the entire organization.

So, let’s break down the process further back and take it to the basics and how analytics and visualization can help the overall business. The 4Ps of business is often taken as the most important and basic entities. Namely: Product, Price, Place, and Promotion. Let’s study them in brief and how analytics can shed more light on them.

Product: The entire manufacturing, supply chain, logistics, and reverse logistics are based on this one “P”. With effective visualizations, you can bring visibility into the inventory, check order processing, delivery status, the efficiency of logistics and warehousing, and more. By effectively drilling down into the actionable area, you can then use demand forecasting or scenario management to find out solutions.

Price: Cost of sales, profit margins, and competitor data can be visualized side-by-side to understand if there is any scope or need to increase or decrease the price. You can map merchandising data in real time with consumer information with fluctuations in demand for e-commerce to identify the best dynamic pricing models.

Place: For example, by visualizing heat maps of e-commerce or physical movement, you can find the most “happening” paths to improve the UI/UX or floor planning. Understanding the channels where sales are happening with trends data can help companies understand if they need a warehouse for their eCommerce or more physical stores for their customers.

Promotion: 360-degree marketing has not only become a trend but a need with the increasing digital touch points. As such retailers and eCommerce companies can have customized promotions and view the results of such promotions to find the most optimal solutions.

The hidden “P”: People

Why we are calling it hidden is- All the above-mentioned 4Ps also talk about the consumers. But if the consumer data is to be taken separately you can find the demographics and the shopping behaviors of the customers to be able to offer them more relatable and necessary products.