Case Study

Profitable promotion strategies for a leading cosmetic group with a strong online share in a highly promotional market

Discover how we helped our client unlock better growth.


Our client, a global leader in the beauty industry, enjoyed an established position in a highly competitive market.

However, the market was characterized by intensified promotional pressures. Promotional activities soared to over 90% and products were under 52-week promotions.

This relentless promotional activity, coupled with the inherent complexity of managing diverse categories, brands, and products, posed significant hurdles for our client. 

Consumers had grown accustomed to frequent promotions across all product categories, exacerbating the strain on profitability. Furthermore, shelf prices had surged to unsustainable levels in specific product categories, threatening the brand’s value proposition and consumer trust.  

Amidst these challenges, the rising prominence of ecommerce presented both a challenge and an opportunity for our client, underscoring the need for a strategic response. The cosmetic group reached out to Simon-Kucher to support with: 

  • Developing a new methodology tailored to promo-intensive markets, allowing for more effective management of promotional activities 
  • Assessing the uplift and ROI generated by promotions, enabling data-driven decisions and efficient resource allocation 
  • Establishing strategic promotional guidelines for each product category, ensuring consistency and coherence across promotional efforts 
  • Developing promotional plans and narratives tailored to each category and customer account to enhance our client’s story-to-trade capabilities
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We conducted a comprehensive review of our client’s existing promotional strategy and clarified promotion objectives for each product category.

This included workshops with category leads as well as RGM and commercial teams to ensure alignment and clarity.

Additionally, we developed a new methodology specifically tailored to the highly promoted market dynamics of our client, incorporating theoretical baseline calculations based on price elasticity for product categories that were consistently on promotion. 

To gain deeper insights into the competitive landscape, we conducted thorough analyses of sell-in and sell-out data, allowing us to assess both our client’s and competitors’ promotional practices. Using this data, we calculated the ROI of promotions, setting baselines and accurately determining uplift. Here we considered various volume effects such as cannibalization, stock-up, and halo effects. Furthermore, we developed a dedicated e-RGM strategy for the main e-commerce player in the market, with a unique tailored approach considering online-specific dynamics such as buy box and sponsored product optimization. 

We then collaborated with key account managers to design promotional plans tailored to each product category and customer account, ensuring strategic alignment and maximum impact.  

Throughout the project, we prioritized change management and capability enhancement, equipping our client’s teams with the knowledge and tools needed to implement and sustain the recommended strategies effectively. To support ongoing decision-making, we designed a user-friendly PowerBI tool, providing teams with a sustainable solution for standardized post-event analyses.  

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Impact on profitability: a product margin gain of €3.8 million

Our new methodology for baseline and ROI calculations provided our client with a more accurate approach to evaluating promotions.

Moreover, the introduction of a new PowerBI tool for post-event analysis empowered our client’s teams with data-driven insights, ensuring they were well-equipped to navigate highly competitive and promotion-intensive markets in the future. 

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