CDPP Promotional Planning & Event Management 1 — Questions and Answers
Question 1: What is the primary purpose of a baseline forecast in promotional demand planning?
- To estimate total revenue during a promotion
- To represent underlying demand without any promotional effects (Correct answer)
- To calculate safety stock levels for the promotion period
- To determine optimal promotional pricing strategies
Correct answer: To represent underlying demand without any promotional effects
The baseline forecast represents the underlying demand that would occur without any promotional activity, serving as the foundation for measuring promotional lift.
Question 2: Which of the following best describes 'promotional lift'?
- The increase in logistics costs during a promotional period
- The incremental demand generated above the baseline due to a promotion (Correct answer)
- The decrease in inventory levels observed after a promotion ends
- The rise in customer service inquiries during a promotional campaign
Correct answer: The incremental demand generated above the baseline due to a promotion
Promotional lift is the incremental demand above baseline sales directly attributable to a promotional event.
Question 3: In demand planning, 'cannibalization' during a promotion refers to:
- A reduction in competitor sales caused by the promotion
- Sales of a promoted item that replace sales of a non-promoted item in the same portfolio (Correct answer)
- An increase in product returns following a promotional event
- Damage to promotional displays during product transport
Correct answer: Sales of a promoted item that replace sales of a non-promoted item in the same portfolio
Cannibalization occurs when a promoted item takes sales away from other products in the same portfolio rather than generating truly incremental consumer demand.
Question 4: What is a 'post-event analysis' (PEA) in the context of promotional planning?
- A pricing review conducted before the next promotion launches
- A retrospective review comparing actual promotional performance against the forecast (Correct answer)
- A customer satisfaction survey distributed after a promotional event
- An assessment of transportation costs after promotional product delivery
Correct answer: A retrospective review comparing actual promotional performance against the forecast
A post-event analysis compares actual sales results to the promotional forecast to identify accuracy gaps and improve future promotional planning.
Question 5: Which metric is most commonly used to evaluate the accuracy of a promotional demand forecast?
- Return on Investment (ROI)
- Mean Absolute Percentage Error (MAPE) (Correct answer)
- Economic Order Quantity (EOQ)
- Days of Supply (DOS)
Correct answer: Mean Absolute Percentage Error (MAPE)
MAPE is a widely used forecast accuracy metric that measures the percentage deviation between forecasted and actual demand, making it suitable for evaluating promotional forecast performance.
Question 6: 'Forward buying' in the context of trade promotions refers to:
- Customers purchasing products before they are officially released
- Retailers purchasing excess inventory during a promotional discount to sell later at regular price (Correct answer)
- Manufacturers ordering raw materials in advance of a promotional production run
- Demand planners forecasting promotional demand several quarters ahead
Correct answer: Retailers purchasing excess inventory during a promotional discount to sell later at regular price
Forward buying occurs when retailers stock up on discounted promotional inventory beyond their immediate needs, distorting true consumer demand signals.
Question 7: Which of the following is a key input for building an accurate promotional demand forecast?
- The company's most recent annual financial audit report
- Historical promotional event data including timing, discount depth, and promotion mechanics (Correct answer)
- The number of customer service representatives available during the event
- The executive leadership team's long-term strategic vision
Correct answer: Historical promotional event data including timing, discount depth, and promotion mechanics
Historical promotional data—including when promotions ran, the discount depth, and mechanics such as buy-one-get-one—provides the critical foundation for forecasting future promotional lift.
CDPP Promotional Planning & Event Management 1
What is the primary purpose of a baseline forecast in promotional demand planning?