RA Quick Insights: What Your Seasonality Reveals About Your Promotional Strategy

Seasonality patterns of your products' baseline unit sales should influence how you price and promote your products to generate optimal Revenues and Gross Profit.

The example below is fictitious weekly baseline demand for two types of products. "Baseline" means expected demand (or shipments) without price discounts and promotions. 

1. Seasonal, expandable consumption items in B2C: We call them expandable consumption because, typically, the more quantity we have at our disposal, the more we use - or eat/drink them. It's items like snacks, beverages, frozen desserts...

2. Needs-based B2B products include auto parts, tires, large-ticket medical devices, or capital equipment sold by a Manufacturer to a Distributor or a Distributor to a business that uses them (a car repair shop, a tire retailer, a medical office...).

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Needs-based B2B industries like Car Parts, Tires, or Medical Device Manufacturing can learn quite a bit from the Consumer Products industry in Price Management (CPG is a couple of decades ahead in analytics-driven Revenue Management).

Nevertheless, products from these opposing industries should be priced & promoted very differently, and their baseline demand can often reveal just why.

Our "Expandable Consumption B2C" products on the top of the chart exhibit a relatively typical seasonal pattern. May-September has 20-30% higher weekly demand than other months, with substantial 2-3x increases during key holidays (US example, but similar trends apply to different geographies).

Because of the "expandable" nature (the more you have, the more you consume) of these product categories, you want to maximize your incremental sales opportunities during the critical seasonal periods, especially during key holidays.

Therefore, we must fund the right consumer price promotions through our Distributor and Retail partners in exchange for additional advertising and product display support to maximize sales.

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In contrast, the "Needs-Based B2B" products on the bottom also show a typical seasonal pattern.

They have lower weekly sales variation, more considerable increases in the last couple of weeks of each quarter, and a considerable demand uptick at the end of the year.

The December uptick is often the case with expensive capital equipment. Business customers rush to finance before year-end to take advantage of expense deductions (i.e., a dentist's office buying a new 3D Dental Imaging equipment).

Establishing reasonable price corridors (staying within specific price ranges) and competitive price indices (pricing within X% of similar competitor products) matter much more than deep price promotions for these products.

Unlike the "Expandable Consumption" products, with Needs-Based B2B products, you don't want to invest too much in price during heavy seasonal periods. High demand will occur regardless, and the incremental impacts are minimal.