Concept Library
Every RGM concept, in plain English
Over sixty explainers across pricing, packs, promotions, and trade terms. Each one carries the formula, a worked example, and a link to the lesson where you practise it. Pick a lever below, or start with the basics.
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A plain-English guide to what Revenue Growth Management is, the five levers it uses, and why it matters for consumer goods teams.
Pricing · 16
Price Elasticity of Demand
Price elasticity of demand (ε) is the ratio of percent change in quantity demanded to percent change in price, negative...
Read the conceptBreak-Even Sales Change (BESC)
The Break-Even Sales Change (BESC) is the volume loss a price increase can tolerate before gross profit turns negative,...
Read the conceptBreak-Even Volume (BEV)
Break-Even Volume (BEV) is the absolute number of units a project must sell to cover its total fixed costs, calculated...
Read the conceptThe 1% Price Leverage Rule
A 1% improvement in price delivers ~11.1% operating-profit lift in the median CPG company, 1.5× the leverage of a 1%...
Read the conceptThe Ten Drivers of Consumer Price Sensitivity
The Ten Price Sensitivity Effects framework identifies ten distinct drivers that make consumers more or less...
Read the conceptVan Westendorp Price Sensitivity Meter (PSM)
The Van Westendorp Price Sensitivity Meter is a four-question direct-survey method that delivers four named price...
Read the conceptConjoint Analysis for Pricing
Conjoint analysis is a tradeoff-based survey method that decomposes consumer preference into part-worth utilities for...
Read the conceptEconomic Value Estimation (EVE)
Economic Value Estimation (EVE) builds a willingness-to-pay number from the bottom up: take the reference price of the...
Read the conceptGabor-Granger Method
The Gabor-Granger method, developed by André Gabor and Clive Granger in the mid-1960s, asks each respondent yes/no...
Read the conceptValue-Based Pricing
Value-based pricing starts from what the product is worth to the consumer and works backward to a price, while...
Read the conceptWillingness to Pay (WTP)
Willingness to pay (WTP) is the maximum price a specific consumer will accept for a specific product in a specific...
Read the conceptLerner Index
The Lerner Index (L = (P − MC) / P) measures pricing power as the share of selling price that is contribution margin...
Read the conceptNagle's Value Cascade
The value cascade (Nagle and Müller, 6th edition of *The Strategy and Tactics of Pricing*, 2018) arranges strategic...
Read the conceptCross-Price Elasticity (XED)
Cross-price elasticity (XED) is the percent change in demand for Product A divided by the percent change in price of...
Read the conceptKnown Value Items (KVI)
Known Value Items (KVIs) are the small minority of basket SKUs whose prices shoppers can recall and use to judge...
Read the conceptPrice Corridor
A price corridor is the range of prices a brand can operate inside without changing its competitive position or...
Read the conceptPrice Pack Architecture · 10
Price Tier Ladders
Price tier ladders are the natural price-per-kg strata every FMCG category develops over time (typically five tiers...
Read the conceptAssortment Rationalization
Assortment rationalization is the disciplined removal of low-velocity, low-margin SKUs from a brand portfolio so the...
Read the conceptThe Four Pack Roles Framework
The Pack Roles framework gives every SKU in a CPG portfolio one of four strategic roles: Entry (price-point defender),...
Read the conceptRSP-per-kg Incentive Curve
The incentive curve plots price per unit (typically RSP per kilogram, per liter, or per 100g) against pack size across...
Read the conceptOBPPC Framework
OBPPC (Occasion-Brand-Pack-Price-Channel) is the master framework for Price Pack Architecture, a five-dimensional grid...
Read the conceptPack-Price Matrix
The pack-price matrix is a two-dimensional grid that plots every SKU in a category along pack size and price tier,...
Read the conceptDecoy Pricing and Asymmetric Dominance
Decoy pricing is the deliberate use of an asymmetrically dominated option, clearly worse than the target on at least...
Read the conceptGood-Better-Best Pricing
Good-Better-Best (GBB) is a three-tier product architecture that explicitly leverages the compromise effect, giving...
Read the conceptShrinkflation
Shrinkflation is the practice of reducing pack size while holding the shelf price flat, hiding what is effectively a...
Read the conceptConsumer Decision Tree (CDT)
The Consumer Decision Tree (CDT) is the hierarchy of choices a shopper makes when navigating a category. The first gate...
Read the conceptTrade Promotion · 11
Forward Buying and Pantry Loading
Forward buying and pantry loading are the two demand-shifting failures in trade promotion: forward buying is the...
Read the conceptPromotion ROI
Promotion ROI is the ratio of incremental profit generated to promotional spend, and it separates value-creating...
Read the conceptCannibalization Rate
Cannibalization rate is the share of a promoted SKU's apparent uplift that came from your own non-promoted SKUs, and it...
Read the conceptSource of Volume
Source of Volume (SoV) decomposition breaks a promotion's volume lift into its four components (cross-brand switching,...
Read the conceptThe Thirds Rule
The thirds rule is the academic decomposition of promotional uplift, showing that roughly 74% of an apparent FMCG promo...
Read the conceptPromotional Baseline
The promotional baseline is the volume you would have sold without the promotion, a counterfactual constructed from...
Read the conceptBOGO and Multibuy Mechanics
BOGO (Buy One Get One) and multibuy mechanics force shoppers to take more units to access the deal, which lifts uplift...
Read the conceptPromotional Mechanics
Promotional mechanic selection is the decision of how to spend a given discount budget, and the choice between TPR,...
Read the conceptCustomer Value Assessment (CVA)
Customer Value Assessment (CVA) is a structured multi-dimensional framework for quantifying the strategic worth of each...
Read the conceptThe Ten Levers of Trade Promotion ROI
Ten levers decide what a trade promotion returns, and they sort by the job each dollar is doing: creating demand that...
Read the conceptEDLP vs HiLo Pricing Strategy
EDLP (Every Day Low Price) and HiLo (High-Low) are the two foundational retail pricing strategies, and they call for...
Read the conceptTrade Terms · 9
Trade Terms Anatomy
Trade Terms Anatomy is the full classification of financial flows between FMCG manufacturer and retailer, from...
Read the conceptGross-to-Net Waterfall
The Gross-to-Net (G2N) waterfall is the cascade of trade-term deductions from gross list price to net invoice price,...
Read the conceptPocket Price Waterfall
The pocket price waterfall is the customer-level cut of the gross-to-net cascade, and the spread between your best and...
Read the conceptCustomer Profitability Matrix
The customer profitability matrix sorts a portfolio on net price received (vertical) and cost to serve (horizontal)...
Read the conceptCustomer Tiering
The Customer Investment Map places each account on current value and growth outlook, then sets its trade investment by...
Read the conceptTrade Investment ROI
Trade Investment ROI is the incremental gross profit a customer's trade money buys you divided by what that money cost,...
Read the conceptTrade Spend Efficiency
Trade Spend Efficiency measures output (volume, distribution, share) per dollar of trade investment (the efficiency...
Read the conceptBATNA & Walk-Away Analysis
A BATNA (Best Alternative To Negotiated Agreement) plus a calculated walk-away threshold turns trade-terms negotiation...
Read the conceptJoint Business Plan (JBP)
A Joint Business Plan (JBP) is the annual contract that locks volume targets, trade investment, listing commitments,...
Read the conceptIntegrated RGM · 10
Contribution Margin
Contribution margin (CM) is the share of price remaining after variable costs, the correct metric for every marginal...
Read the conceptManufacturer P&L Architecture
An FMCG manufacturer P&L follows a seven-layer cascade: Gross Sales, Trade Investment (Gross-to-Net deductions), Net...
Read the conceptManufacturer P&L Sensitivity
Manufacturer P&L sensitivity analysis traces how a percent change in each commercial lever (price, volume, variable...
Read the conceptCross-Lever P&L Sensitivity
Cross-lever P&L sensitivity is the EBIT-impact comparison across every RGM lever pulled in isolation, showing...
Read the conceptPrice Pass-Through Rate
The price pass-through rate is the share of a manufacturer's list price change that the retailer reflects in the shelf...
Read the conceptRetailer P&L Architecture
An FMCG retailer P&L is structured in seven layers: Consumer Sales, Cost of Goods, Front Margin, Back Margin, Total...
Read the conceptRetailer P&L
The retailer P&L traces consumer sales through retail gross profit, trade income from manufacturers, and OPEX to net...
Read the conceptDual P&L Bridge
The dual P&L bridge reconciles each trade-investment mechanic across the manufacturer P&L and the retailer P&L line by...
Read the conceptThe Five RGM Levers
The Five RGM Levers (Pricing, Price Pack Architecture, Trade Promotion Optimization, Trade Terms, and Mix Management)...
Read the conceptNet Revenue Management (NRM)
Net Revenue Management is the FMCG commercial discipline that integrates pricing, price-pack architecture, trade...
Read the conceptLearn by doing
Reading is the start. The reps are where it sticks.
Every concept here has a lesson behind it: a live simulator and an AI coach, across 36 lessons and 5 modules.