Portfolio Management
Global Budget Allocation and portfolio management is a complex exercise that on one hand requires information and consensus from multiple stakeholders e.g., brand, finance, sales operations, and on the other requires speed and flexibility to take advantage of opportunities.
Ninah Consulting has extensive experience in partnering with clients to establish better processes and tools to enable better top down, bottom up and reconciliation of budget setting perspectives. Common benefits from these processes have been faster planning cycle, better organizational buy-in, higher returns from marketing short term and better or true trade-off and management of portfolios in the longer term.
Case Study Managing a Global Beverage Portfolio
Situation
Eleven brands, eight countries, a range of advertising media and creatives and a myriad of different promotions supporting on and off trade volume. The client wanted a robust marketing allocation plan which would link their annual budget to their 3-year strategic goals and improve margin, scale and growth.
Approach:
Statistics were provided from historical econometric performance evaluation and predictive sales response models which created three year cash flow projections for a number of marketing strategy options. This showed how varying the country and brand priorities as well as balance of advertising and trade support, altered growth projection patterns. The team used the outputs of the modeling work to inform discussions between country representatives and worked with them to align effort behind a single marketing budget allocation strategy.
Results
Clear direction was given regarding the returns being achieved in each country for each brand's advertising as well as on-trade and off-trade promotions. The three-year cash flow projections proved that investment behind premium brands pays off but should not be at the expense of scale brands, even those in long-term decline. Reallocating a fixed budget inevitably produced winners and losers - the justification and willingness to change was driven by the size of the prize - an increased profit forecast in excess of $300m over the three years.