Optimizing Trade Promotion Budget Allocation

The Challenge

Our CPG client needed to optimize allocation of their nearly one billion dollar budget to promote over 5,000 brand and account combinations to reach target growth objectives for account-brand combinations. Automating the allocation of trade spend will reduce applied time and resources, allow scenarios to be planned and quickly tested to inform the optimal marketing mix, and provide a scalable foundation to optimize trade and marketing spend across retail channels, customers, and product lines.

The Solution

The number of offers is in the hundreds of thousands meaning that the potential mix of combinations is nearly infinite. This is an ideal problem for linear methods of optimization. Using Rsymphony we developed a linear model to optimize budget allocation based on targeted growth rates for 5000 decision variables and 500 constraints in seconds.  Solutions are also in development based on net and gross sales.


The result saved our client over 2,000 employee hours annually. A process, which previously took five employees over half their time and months to complete, now takes one employee a half-day with employee review. Automation enabled the client to quickly adjust trade spend to support new insights from data-driven marketing campaigns. Our efforts also provided an unbiased baseline for trade fund allocation discussion with clients.