By Wayne Viljoen, Sr. Director RGM and Analytics, MRA LLC
Executive Summary
In today’s complex and volatile consumer goods landscape, revenue growth strategies built on a single commercial lever are no longer sufficient. The most successful organizations are those that integrate multiple levers – pricing, promotions, size, PPA, and assortment – into a cohesive, multi-year Revenue Growth Management (RGM) strategy. This paper outlines how to design and implement an integrated RGM roadmap that balances short-term performance with long-term resilience.
Table of Contents
1. The Shifting Growth Landscape
2. Why RGM Matters Now
3. Beyond Silos: Uniting Commercial Levers
4. Best Practice Framework for Integration
5. Building a Multi-Year Growth Roadmap
6. Conclusion & Call to Action
1. The Shifting Growth Landscape
Today’s consumer goods landscape is more dynamic and demanding than ever. Companies are navigating an environment marked by heightened uncertainty, intensified competition, and rapidly evolving shopper expectations. Private label offerings are becoming more sophisticated and price-competitive, while smaller niche brands continue to capture share through novel and differentiated value-benefit propositions. At the same time, the explosion of data and digital shelf complexity is pushing businesses to make faster, smarter, and more granular decisions across portfolios.
2. Why RGM Matters Now
Against this backdrop, many companies often find their revenue growth algorithms overly dependent on a single lever – be it pricing, volume, or mix. This reliance on a single source of growth may deliver short-term wins but often lacks resilience and adaptability over time. The aim of Revenue Growth Management (RGM), as a strategic approach to optimizing revenue growth via the explicit management of the commercial levers of price, promotions and product mix, is to achieve a balanced revenue growth algorithm.
In this context, RGM becomes not just a commercial function, but a strategic imperative. For RGM to offer a path toward a healthier, more balanced growth algorithm, it must unite multiple commercial levers into a cohesive strategy that evolves with the market.
Yet RGM is often viewed through isolated levers, and often led by different functions, with different objectives.
3. Beyond Silos: Uniting Commercial Levers
Fortunately, the true strength of RGM emerges when these levers are strategically integrated over multiple years. In isolation, each RGM lever, such as pricing or promotions, has unique strengths but also carries inherent limitations. Price adjustments bring price realization, but alone, risk volume declines – especially during high inflationary periods or times of uncertainty when consumers are more sensitive to price changes and cautious about spending.
Conversely, promotions yield incremental sales, but relying solely on them can amplify subsidized sales and erode margins. PPA, which is a foundational integration of price and value, effectively manages price sensitivity and helps navigate critical price thresholds. Yet, addressing the shopper incentive curve through price, size, or pack mix without factoring in shopper behavior and retail variation risks missing broader purchasing trends.
4. Best Practice Framework for Integration
Doing each lever right is the first step on the path to a balanced growth algorithm. The next phase entails integrating the levers into a cohesive strategy. By doing this, businesses create a balanced strategy where each element complements one another and compensates for the others’ limitations. For instance, leveraging tactical promotions alongside strategic pricing can sustain margins while stimulating demand. Similarly, aligning PPA and pack mix with key category price-value segments, consumer purchasing patterns and different retail channels maximizes appeal, delivering profitable growth by meeting shoppers’ varied needs for value in diverse ways – price accessibility, greater value through larger pack sizes, or convenience in an omni-channel environment.
A multi-year roadmap ensures continuous refinement, allowing companies to dynamically respond to changing market conditions as incremental enhancements across multiple levers compound over time. Just as importantly, a phased, multi-year approach allows businesses to align commercial tactics with evolving strategic priorities.
5. Building a Multi-Year Growth Roadmap
Think of integrated, strategic RGM in terms of a virtuous growth cycle. To build a multi-year growth map, phase 1 might focus on strategic pricing, to enhance the incentive curve and to strengthen the bottom line. The profit gains from this phase can then be reinvested into more effective promotional strategies aimed at unlocking volume in phase two. Given the new base price, what level of promotional depth is justified, at what frequency and timing, in which bundle, and with what offer type or tactic.
Meanwhile, pack mix and promotional intensity can be refined to emphasize high-volume, high-profit offerings, building long-term value. Elasticity-based price-size adjustments, strategically targeted promotions, and carefully curated pack offerings that directly address shopper needs across channels can significantly enhance shopper demand, resulting in sustained profitability and growth.
6. Conclusion & Call to Action
In short, an integrated, multi-lever RGM strategy is essential. It provides resilience, flexibility, and continuous improvement – vital elements for navigating today’s complex and competitive market landscapes and securing enduring business performance.
Market Research Alliance (MRA) partners with consumer goods manufacturers to develop comprehensive, integrated RGM strategies that drive profitable growth. Contact us today to learn how we can help optimize your approach and ensure sustained market success.
