1. Introduction to the case study
Hi, my name is Carl and I'll be your instructor for this case study on Net Revenue Management.
2. Case study goals
First things first. What is a case study? The purpose of a case study is to apply the skills you learned in the previous courses, to a real-world problem.
In this case study, you will be working for a Fast Moving Consumer Goods company and will be analyzing their data to identify growth opportunities related to Net Revenue Management, or NRM.
Before starting this case study, we recommend you have completed the Data Analysis and Pivot Tables in Google Sheets courses.
3. Case study overview
In the first chapter we will start with an introduction where you will learn everything there is to know about FMCG companies: what is the industry all about, and what are their core operations and focus points. You will be put into the shoes of a category manager for HealthMax, a shampoo supplier. You will learn how to analyze the shampoo market and calculate important key performance indicators, or KPIs for your business.
4. Case study overview
In the second chapter we'll explain what NRM is, and we'll introduce you two of the five Net Revenue Management pillars. You will combine these NRM concepts with your spreadsheet skills to look for specific business opportunities.
5. Case study overview
In the last chapter, you will discover the remaining 3 NRM pillars, and investigate how you can pull these levers to create growth opportunities for Healthmax.
Finally, you will calculate the total impact of your NRM initiatives on the total business, and present your final recommendations to your management.
6. FMCG industry
Let's start by introducing the FMCG industry. FMCG stands for Fast Moving Consumer Goods.
Do you recognize these brands? Well, these brands are a great example of some famous FMCG brands that are active around the globe. They sell and distribute a wide range of products with some very typical characteristics. Let's have a look at typical FMCG products.
7. FMCG products
Good examples are food, beverages, personal care items, or household cleaning products.
FMCG products are everyday products that are frequently purchased and are consumed quickly. They therefore have a relatively short lifespan.
These items are typically quite cheap and are widely available. They have a high shelf rotation, mostly because there is a high demand, but sometimes also because of a short expiration date. Suppliers sell them in huge volumes at relatively low margins.
8. Growth in the FMCG industry
The total global market size of the FMCG industry has been estimated to be 11,4 trillion dollars in 2021 and will probably reach almost 19 trillion dollars by 2031. Talk about a big industry!
FMCG companies can grow by many different ways. A very common marketing strategy is focusing on the 4 P's, which are Product, Price, Place, and Promotion.
By selling smaller cans in vending machines compared to larger bottles in supermarkets, Coca-Cola can offer the right product at the right place at the right time. They can therefore increase consumption and change the pricing of their products accordingly to generate more sales. By offering the right promotion, they can drive consumption and generate even more sales.
Another common and newer way of generating growth in the FMCG industry is by applying the principles of Net Revenue Management.
9. Let's practice!
We’ll deep-dive into this in the following chapters.