The promotion lifts volume. Does it earn more contribution?
Merefield sells household products through retailers. A buyer proposes a promotion that shifts shoppers from a higher-margin pack.
The question
This is an authored consumer-goods sales case, inspired by the work described in Unilever’s UK and Ireland programme. It is not a Unilever question.
| Units | Contribution per unit (£) | |
|---|---|---|
| Promoted pack without promotion | 10000 | 2 |
| Promoted pack during promotion | 16000 | 1.4 |
| Other pack without promotion | 8000 | 3 |
| Other pack during promotion | 6000 | 3 |
Same stores and four-week window. Contribution per unit already includes product and trade costs; do not deduct the discount twice. The displaced 2,000 other-pack sales are included in the forecast.
“Compare total contribution, identify the hidden trade, and negotiate a better test.”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Calculate the promoted pack
What would you do here? Open the move you’d make.
Compare pack contribution
The strong move. More units can produce a much smaller increase in contribution.
Use promoted-unit growth to judge success
Tempting, but it misses something. The promotion changes both volume and unit contribution.
See how a strong candidate says it
“The promoted pack rises from £20,000 contribution to £22,400. Its 60% volume increase adds only £2,400 contribution because each unit earns less.”
Why it works: More units can produce a much smaller increase in contribution.
Step 2: Count cannibalization once
What would you do here? Open the move you’d make.
Evaluate the promoted pack as its own campaign
Tempting, but it misses something. A promoted-product-only calculation misses the lost contribution elsewhere.
Include the £6,000 displaced contribution
The strong move. The buyer’s forecast shifts some demand rather than creating it.
See how a strong candidate says it
“The other pack falls from £24,000 to £18,000. Total contribution falls from £44,000 to £40,400: a £3,600 decline. I would not deduct the £6,000 again; it is already in the promoted total.”
Why it works: The buyer’s forecast shifts some demand rather than creating it.
Step 3: Negotiate the mechanism
What would you do here? Open the move you’d make.
Test a different trade or audience
The strong move. The plan should improve the total business, not only the promoted line.
Approve the original promotion
Tempting, but it misses something. The supplied forecast does not support the original plan on contribution.
See how a strong candidate says it
“I would discuss a shallower discount, a pack with less overlap, or a smaller store test. We need a plausible mechanism for incremental demand, with contribution measured across the affected range.”
Why it works: The plan should improve the total business, not only the promoted line.
Step 4: Make a joint review
What would you do here? Open the move you’d make.
Compare different store periods
Tempting, but it misses something. Seasonal or unmatched comparisons cannot isolate the trade in this packet.
Use a matched-store contribution check
The strong move. A joint plan needs comparable evidence and an explicit objective.
See how a strong candidate says it
“I would agree stores, dates, availability and a matched comparison with the retailer, then review total range contribution and repeat demand. I would separate any strategic distribution objective from a claim of immediate profit growth.”
Why it works: A joint plan needs comparable evidence and an explicit objective.
The answer, in short
- Decision
- Renegotiate the promotion rather than buy a 60% volume headline.
- Because
- The supplied range contribution falls by £3,600.
- What would change it
- Evidence of incremental repeat demand or a separately agreed distribution goal could change the plan.
Common traps
- Ignoring cannibalized sales.
- Subtracting a discount already included in contribution per unit.
Check your answer
- Did you calculate £22,400 for the promoted pack?
- Did you include both packs and find the £3,600 decline?
- Did you avoid counting the same cannibalization twice?
- Does the proposed test measure total contribution?
Last reviewed Nov 10, 2026