Temporary Price Reduction
Temporary Price Reduction
A Temporary Price Reduction occurs when the price of a product is reduced by 10% for up to four weeks.
Tracking your TPR performance will help you decide which products are eligible for temporary promotions while ensuring your discounts remain profitable.
Share TPR results with your vendor to negotiate win-win campaign strategies. If reseller promotions affect the selling price at the point of sale, we will notify you.
We don't always show all views in the weekly view. TPR coverage is not listed to protect dealer confidentiality. This information is only reported when at least four dealers sell a model at a reduced price within a week.
For combined time periods, weighted TPR coverage is only reported if the model was on sale at at least 4 retailers for all selected weeks.
How is it calculated?
TPR information is based on weekly data from GfK POS. We only exclude temporary price changes, permanent price changes are not included.
The weighted TPR coverage is a measure of the extent of price cutting activity. It is measured by counting stores where price declines have been observed. Stores are weighted according to their significant size, which is measured by the sales in each category and week. For the current model, you can estimate the extent of TPR coverage based on history.
Online retailers are treated as businesses in the weighted TPR coverage, but their importance is considered by revenue category. So when a major online retailer releases a model for the TPR, that retailer will be included in the weighted TPR coverage based on its importance in the category.
Dealer refunds are included, which are deducted from the regular price directly at the point of sale. Manufacturer refunds that require the consumer to send a receipt to the manufacturer are not included. Refunds and cancellations are honored.
Discounts lasting 1 day are covered but are subject to the impact of the discount on the average selling price over a week. In any case, the price drop and sales increase for an activity day is underestimated as it reflects the average for the whole week (4 days without a price drop).
Base model sales at store level are calculated as average sales over the last 4 weeks. At the model/business level, excludes the past few weeks that we have seen TPR at the model/business level. Sales are seasonal and outliers are removed before the average is calculated.
The basic price is calculated at branch level. The base price must never be lower than the average selling price or higher than the highest average selling price over the next 4 weeks.
Intensity
TPR Intensity measures marketing intensity and divides the units sold by temporarily reducing the price to the sum of all units sold.
Efficiency
is the ratio between the increase in sales from a temporary price reduction and the additional cost of the TPR. Sales growth is the difference between the actual sales and the (planned) base sales. Additional cost is the total price reduction for all units sold with TPR. Values greater than 1 indicate that the price drop generated more additional revenue than it cost the merchant, values less than 1 indicate the opposite.
The difference between TPR efficiency and relative TPR efficiency is that relative TPR efficiency is derived from TPR efficiency. Sets the model's TPR performance relative to the average TPR performance of all models in the category.
