An ad planning meeting is a stressful environment for a meat director. Choosing witch items to feature, at what price, and then figuring out how to buy the required volume of that item causes many meat buyers to simply fall back on the items they featured the previous year. But should the fact that you ran Strips this time last year mean that Strips will be the optimal item to run this year? Well that depends. But sometimes these nuances can be hard to convey to your boss.
This leaves you with a tough decision – go out on a limb and advocate for a different option that you believe will perform better or stick with last year’s items for comps? And if you do go to bat for the item that you believe will perform better, how can you present it to the committee in a concise, effective, and defensible way?
Enter DecisionNext, a tool that allows users to simultaneously game play numerous ad options by forecasting the future wholesale prices and profitability of each cut down to the gross margin level, all in real time and on a web browser.
Let’s look at an example of a potential ad you are planning to run six weeks out. There are many alternatives from which to choose. Which item should take center stage?
- New York Strips
- Top Sirloin
Using the DecisionNext Transaction tool you can accurately and immediately forecast the wholesale cost of each alternative, compare them side by side, and immediately identify the winning combination of items at any point into the future. Market volatility will often create significant value opportunities. You can even compare the three DecisionNext forecasts (including a machine learning forecast, a fundamentals driven forecast, and a futures-ratio forecast) to an external forecast your company subscribes to, or one your company generates in-house, making sure that you have the insight you need every time.
Let’s take a look at three lead item alternative ads for six weeks in the future:
In the scenario presented above, we are comparing the expected gross margin of running three different lead beef items; New York Strips (which you ran at this time last year), Top Sirloin, and Tenderloins.
As you can see, there is a clear winner. While New York Strips is an attractive lead feature, expected to generate $2.14M, the Tenderloin lead feature ad is expected to generate $2.23M with a potential upside of $300k.
By having all of your options forecasted in a clear, concise, and easy to use format, you can walk into your ad planning meeting fully prepared to explain and defend your decision around which items will be most profitable to run as the feature ad and why.
Having the expected amount of gross margin for each alternative calculated and clearly displayed will increase the likelihood of approval for the feature ad you have selected.
Using DecisionNext you will not only reduce the amount of work you have to do to compare lead feature ad alternatives, but you will also increase the likely success of the selected feature item in any given week.
Post ad evaluation
Fast forward seven weeks into the future when you are reviewing the performance of the ad…
Have you ever had to explain why an ad performed the way it did? And more specifically, have you ever been second guessed about the ad that you chase to run before the market took a turn?
With DecisionNext, evaluating the performance of an ad and, more specifically, the performance of each ad item, is easy. DecisionNext allows you to “Lock” the decision in time and compare that forecast to the actual results when the ad runs.