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Cross-Lever Impact Simulator

Pull all 5 RGM levers (price, premium mix, pack count, promo depth, promo frequency) simultaneously on a single P&L. Watch the Flywheel Coordination Band and the Cross-Lever Sequencing Scorecard tell you whether your integrated plan compounds or fights itself. The same capstone interactive model the full RGM Academy course uses for Integration Lab Lesson 6, no auth, no paywall.

Updated 28 April 2026Extracted from the Integration Lab module, lesson 6: Cross-Lever Optimization
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Scenario walkthrough

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5.1Scenario setup

The starting SKU, market, and assumptions the model makes.

You are the Commercial Director at a mainstream FMCG biscuit manufacturer running the integrated annual plan for CrunchField Biscuits Portfolio. Base price $4.99, 1.0M units annual volume, COGS $2.40/unit, trade terms 22% of gross, current promo depth 15% running on 30% of volume, premium SKUs at 25% of mix carrying a 1.45x price multiplier and 1.15x COGS multiplier. Price elasticity at the CPG working ceiling of -1.8.

The baseline lands at $1.59M gross profit at 39.0% gross margin on $4.08M net revenue. Now five different teams are bringing five different proposals: Pricing wants +5% list, PPA wants 35% premium mix, Trade Marketing wants 30% promo depth running on 45% of volume, Range Management wants to add 3 SKUs (packs to 8), and Finance wants the integrated plan to clear +10% gross profit. They cannot all win simultaneously. The simulator is the tool that shows which combinations compound and which cancel, before the integrated plan goes to the operating committee.

Your objective

Use the simulator to find a 5-lever configuration that lifts coordinated gross profit by at least 10% versus baseline while keeping the Flywheel Coordination Band in Aligned or Spinning, the Sequencing Scorecard at A or B, and zero Reference Price Erosion warnings. Then test the conflict plan to feel how a +5 price paired with deep promo destroys value mathematically rather than as a slogan.

Key assumptions

  • The simulator models a single portfolio at a single category position in isolation. No competitive response, no cross-portfolio cannibalisation, no channel mix beyond the implicit blended channel. Cross-portfolio effects sit in PPA Lesson 5 Pack-Price Matrix; competitive response sits in Pricing Lesson 9 War Gaming.

  • Price elasticity is fixed at -1.8 across all 5 sliders. Premium and mainstream tiers share the same elasticity in this model (a deliberate simplification). Real portfolios typically show -1.0 to -1.4 on premium and -2.0 to -2.5 on mainstream; if your portfolio's tier elasticities diverge sharply, treat the GP numbers here as directional rather than absolute.

  • Reference-price erosion is modelled at -2% volume per 10pp of excess depth above 20%. This is a deliberately conservative magnitude: empirical observations in heavily promoted categories run higher (5 to 10% per cycle in the most heavily promoted SKUs). The Tool's 20% threshold is the trigger; the warning fires regardless of the chosen multiplier.

  • Trade terms are fixed at 22% of gross revenue. The Tool does not expose a trade-terms slider because the integrated cross-lever lesson focuses on the 5 levers a commercial team can move quickly; trade-terms restructuring is a separate annual cycle modelled in Tool #12 manufacturer-pl-sensitivity.

  • The 5 sliders are deltas around BASELINE_SLIDERS, not absolute values. Premium Mix 35 means 35% of volume from premium tier (not +35pp from baseline 25); Promo Depth 30 means 30% absolute discount when on promotion. Read the displayed value next to each slider as the absolute setting.

5.2Controls & toggles

Every input the calculator exposes, its range, and what it changes.

ControlRangeDefaultWhat it changes
Base Price Change-15% to +15% in 0.5% steps0% (base $4.99)Manufacturer list price change at shelf. Drives volume through elasticity (-1.8). Single highest-leverage lever at moderate elasticity, but realised gross-profit lift compresses fast as you cross +5% (volume drop). Combined with deep promo, structurally fights itself: consumers anchor to the promo price while you raise list.
Premium Mix %5% to 60% in 1% steps25%Share of volume from the premium tier (1.45x price multiplier, 1.15x COGS multiplier on premium). The structural margin lever. Drives mix-led profit improvement on the same volume base. Above 40% combined with depth above 20%, trips Premium Mix Coherence rule because the deep discount signals the premium positioning is not real.
Pack Count2 to 10 SKUs in steps of 15 SKUsNumber of SKUs in the assortment. Each pack above 5 adds about 1.5% volume through wider distribution / shelf presence; each below 5 subtracts the same. Above 7 with mix below 30% trips Pack Discipline rule (assortment proliferation without a premium anchor fragments the portfolio signal).
Promo Depth0% to 40% in 1% steps15% off shelfDiscount percentage when on promotion. Above 20%, triggers reference-price erosion: -2% volume per 10pp of excess depth (the model's conservative magnitude). The Reference Price Erosion warning fires above 20%. Beyond +5pp on the baseline (depth above 20% absolute), Reference Price Integrity rule fails when paired with any price lift.
Promo Frequency5% to 60% in 1% steps30% of volume on dealShare of volume sold on promotion. Higher frequency drives a modest volume uplift (multiplier of 1 + (freq_ratio - 1) * 0.15) but raises total promo cost as a share of consumer sales. Combined with depth: Frequency * Depth above 9% trips Promo Intensity Discipline rule, the threshold beyond which event-level ROI typically goes negative on mainstream FMCG SKUs.
5.3Step-by-step exploration

7-step guided exploration of the scenario.

  1. Read the default state to anchor the baseline

    The simulator initialises at all 5 sliders at baseline: Price Change 0%, Premium Mix 25%, Pack Count 5, Promo Depth 15%, Promo Frequency 30%. Read the right-side outputs. Net Revenue $4.08M, Gross Profit $1.59M, Volume 1,000K units, Gross Margin 39.0%, Weighted Avg Price $5.55 (blended across mainstream $4.99 and premium $7.24). Coordination Band reads Aligned by definition (gap = 0% at baseline because the actual coordinated GP equals each single-lever GP equals baseline). Sequencing Scorecard reads A (5 of 5): all five rules pass at the default values. Reference Price Integrity passes (depth 15 ≤ 20), Premium Mix Coherence passes (mix 25 ≤ 40), Promo Intensity passes (0.30 × 0.15 = 0.045 ≤ 0.09), Pack Discipline passes (packs 5 ≤ 7), Direction Alignment passes (price 0 ≥ 0 and mix 25 ≥ 25). Anything you do from here either lifts or destroys this $1.59M floor.

    Expected outcome: Default Net Revenue **$4.08M**, Gross Profit **$1.59M**, Gross Margin **39.0%**, Volume **1,000K**. Flywheel Band **Aligned** with Coordination Gap at exactly 0% by definition. Scorecard Grade **A** at baseline (all 5 rules pass at the limit values). The Scenario Comparison chart shows baseline and current bars sitting on top of each other across all 6 P&L lines; the P&L Waterfall shows the full cascade from $5,551K Gross Revenue down to $1,590K Gross Profit. This is your reference state.
  2. Run the synergistic plan to feel a positive Coordination Gap

    Drag Price Change to +3%, Premium Mix to 35%, Promo Depth to 10% (down from baseline 15), Promo Frequency to 25% (down from baseline 30), leave Pack Count at 5. All 5 levers reinforce: a moderate price lift on a slightly premiumised mix with shallower and less-frequent promo. Read the right side: Gross Profit lifts roughly +12 to +18% versus baseline (~$1.78M to $1.88M). Coordination Band crosses into Flywheel Spinning (positive coordination gap of about +1.5 to +3% of baseline GP, meaning the integrated plan delivers more than the sum of single-lever moves). All 5 Sequencing Scorecard rules pass: Grade A. No Reference Price Erosion warning. This is the coordinated-RGM benchmark in numerical form.

    Expected outcome: Gross Profit roughly **$1.78M to $1.88M, +12 to +18% versus baseline**. Coordination Band **Flywheel Spinning** (positive gap). Scorecard Grade **A** (5/5 pass). Flywheel hero tile shows Sum-of-Individual close to $200K, Coordinated Actual close to $230K, Coordination Gap close to +$30K. The Scenario Comparison chart shows the green Gross Profit current bar above the slate baseline. The lesson: combined moves clear the coordinated bar at the same elasticity that defeats single-lever moves.
  3. Spring the cross-lever conflict trap

    Reset all sliders. Drag Price Change to +5%, Premium Mix to 15% (down from baseline 25), Promo Depth to 30% (well above the 20% threshold), Promo Frequency to 45%, leave Pack Count at 5. Now the levers fight each other: a price lift on a downtraded mix funded by deeper and more frequent promo. Read the right side: the Reference Price Erosion warning fires (depth 30% > 20%), three Sequencing rules fail (Reference Price Integrity, Premium Mix Coherence, Direction Alignment), Scorecard Grade drops to D, Coordination Band drops to Friction or Broken depending on the exact gap math. Gross Profit may even land below baseline despite four levers having moved in the 'right' direction individually. The integrated plan destroys value the sum-of-parts math hides.

    Expected outcome: Reference Price Erosion warning fires. Scorecard Grade **D** (typically 2/5 rules pass). Coordination Band **Friction** or **Broken**. Gross Profit landing roughly flat to slightly negative versus baseline (typically $1.45M to $1.65M depending on exact slider settings). The Scenario Comparison chart shows the Gross Profit current bar at or below the baseline (red colour because current < baseline). The lesson: each lever's individual single-lever GP impact may look positive but the coordinated-actual is destroyed by the cross-lever interactions. This is the cross-lever conflict the integrated plan must avoid.
  4. Isolate the premium-mix path versus the price path

    Reset all sliders. Drag Premium Mix to 50% with everything else at baseline (Price 0, Depth 15, Frequency 30, Packs 5). Read the GP lift: this is the pure mix-led path with no price action. Premium Mix Coherence still passes (depth at baseline 15 < 20). Now reset and try the inverse: Price Change to +5% with everything else at baseline. Read the GP lift on the pure price-led path. Compare the two: which lever delivers more GP at the same coordination quality? At a 39% gross-margin biscuit portfolio, the answer is informative: mix lift is structurally cleaner but slower to execute (3 to 4 quarters of trade marketing investment); price lift is faster but volume-elastic.

    Expected outcome: Premium Mix 50% alone: Gross Profit lifts roughly **$200K to $280K versus baseline (~+13 to +17%)**, Coordination Band stays **Aligned** (gap close to 0 because only one lever moved), Scorecard typically stays at A or B. Price +5% alone: Gross Profit lifts roughly **$50K to $100K versus baseline (~+3 to +6%)** because the volume drop on -1.8 elasticity (-9%) eats most of the price gain. **The mix-led path is structurally cleaner but most brand teams under-index on it because it is slower to execute.** This is the cross-lever leverage point the simulator surfaces.
  5. Test the pack-proliferation-without-anchor scenario

    Reset all sliders. Drag Pack Count to 10 (max), Premium Mix to 15% (downtraded). Other levers at baseline. Read the right side: Volume rises modestly (about +7.5% from the pack multiplier), Pack Discipline rule fails (assortment without premium anchor at mix < 30%), Scorecard drops one grade. Gross Profit may still rise in absolute terms because the volume lift is real, but the structural read in the scorecard exposes the fragility: a 10-SKU range with 15% premium mix is shelf-sprawl on commodity tiers, not a portfolio strategy. The GP number alone hides the problem; the scorecard surfaces it.

    Expected outcome: Volume lifts to about **1,075K units (+7.5%)**, Gross Profit lifts modestly. Pack Discipline rule **fails** (red X mark on the scorecard). Scorecard Grade drops from baseline. **Other 4 rules still pass, but the overall plan grade reflects the structural weakness.** The lesson: a positive single-KPI lift can mask a structural cross-lever failure. The scorecard is the diagnostic that catches it.
  6. Find your portfolio's natural coordination leverage point

    Reset all sliders. Now systematically test which lever combination maximises Coordination Gap (the dollars beyond the sum-of-parts). Try price-led: +3% price, mix at 25, everything else baseline. Note the Coordination Gap in the hero tile. Try mix-led: 0% price, 35% mix, depth -5pp from baseline (Depth 10), everything else baseline. Try promo-reduction-led: 0% price, 25% mix, Depth 5%, Frequency 20%. The coordination gap will be different across the three plays. The largest positive gap is your portfolio's natural cross-lever leverage point: the path where the integrated plan most outperforms any single lever or sum of single levers.

    Expected outcome: Three plays yield three different Coordination Gaps. Typical pattern for a 39% gross-margin biscuit portfolio: **mix-led with shallower promo gives the largest positive gap** (around +2.5 to +4% of baseline GP), price-led alone gives near-zero gap (because price has no synergy with the other untouched levers), promo-reduction-led gives a small positive gap that depends on baseline promo intensity. The leverage point varies by category: heavily promoted categories often have larger promo-reduction gaps; underpromoted-but-margin-rich categories have larger mix gaps.
  7. Build the integrated-plan recommendation for the operating committee

    Reset all sliders. Build the actual integrated annual plan: Price Change +2% (modest list lift, room for retailer pass-through dialogue), Premium Mix 32% (achievable shift in one year via targeted shopper marketing), Pack Count 6 (one new SKU added to the premium tier specifically), Promo Depth 12% (3pp shallower than baseline, signals mix coherence), Promo Frequency 27% (3pp lower than baseline, frees promo cost). Read the right side: Gross Profit lifts roughly +8 to +12% versus baseline (~$1.72M to $1.78M), Coordination Band Aligned to Spinning, Scorecard A or B (all 5 rules pass or one weakness), no Reference Price Erosion warning. This is the recommendation the operating committee will sign off on. Each individual lever is moderate; the cross-lever coordination delivers the lift.

    Expected outcome: Gross Profit roughly **$1.72M to $1.78M, +8 to +12% versus baseline**. Coordination Band **Aligned or Spinning**. Scorecard Grade **A or B**. Reference Price Erosion: not triggered. **The integrated annual plan recommendation: 'Take a moderate 2% list lift, support full retailer pass-through with a one-quarter visibility programme; accelerate the premium mix shift to 32% via targeted shopper marketing on the premium tier; add one new premium SKU to take the assortment to 6; reduce promo depth from 15% to 12% and frequency from 30% to 27% to free promo cost and protect reference-price integrity. Combined integrated GP lift versus base: roughly +$150K to +$190K, ~+9% to +12%.'**
5.4Reading the output

Every KPI, the formula behind it, and how to interpret a positive or negative value.

KPIFormulaHow to read it
Coordination Gap(Coordinated Actual GP delta) minus (Sum of 5 Single-Lever GP deltas, each computed with one slider changed from baseline)**The headline cross-lever number.** Positive gap means the levers are compounding (integrated plan worth more than the sum of single-lever moves). Negative gap means the levers are friction (some lever pair is cancelling value). 4 bands mapped to gap as % of baseline GP: **Flywheel Spinning at or above +1.5%, Aligned -3% to +1.5%, Friction -3% to -10%, Broken below -10%** (also Broken when depth ≥25% with price ≥+3% by override). The single most important diagnostic for whether the integrated plan is structurally sound.
Sequencing Scorecard Grade5 rule checks, each pass = 1 point. 5/5 = A, 4/5 = B, 3/5 = C, ≤2/5 = D**The structural-rules-respected grade.** 5 rules check: (1) Reference Price Integrity (depth ≤ 20% OR no price lift), (2) Premium Mix Coherence (mix ≤ 40% OR depth ≤ 20%), (3) Promo Intensity Discipline (depth × freq ≤ 9%), (4) Pack Discipline (packs ≤ 7 OR mix ≥ 30%), (5) Direction Alignment (price direction and mix direction aligned). A or B grade is the gate for committee approval; C is half-formed; D is incoherent and should not ship as written.
Gross Profit Δ%(Current GP minus Baseline GP) / Baseline GP × 100**The yardstick.** Coordinated multi-lever plays in a typical FMCG portfolio deliver +10 to +20% gross profit lift versus baseline; single-lever moves typically land -5 to +5% at the same elasticity. A coordinated plan that lands below +10% has either a friction problem (low Coordination Gap) or a single-lever-moved-too-far problem (one slider crossed a structural threshold). Cross-reference with the Coordination Gap and the Scorecard to diagnose which.
Net Revenue and VolumeNet Revenue = Gross Revenue minus Trade Terms minus Promo Spend. Volume = Base Volume × elasticity response × pack-multiplier × promo-frequency uplift × (1 minus reference-erosion factor)**Top-line and unit reads.** Volume is downstream of 4 of the 5 levers (price via elasticity, pack count via assortment, promo frequency via uplift, promo depth via reference erosion above 20%). Net Revenue is downstream of all 5 (gross revenue scales with weighted price; trade terms scale with gross; promo spend scales with weighted price × volume × frequency × depth). A plan that lifts GP via mix may show flat or down volume but rising revenue per unit; a plan that lifts GP via price will show volume drop offset by higher unit revenue.
Gross Margin and Weighted Avg PriceGross Margin % = Gross Profit / Net Revenue. Weighted Avg Price = (premium share × premium price) + (mainstream share × mainstream price)**The structural margin reads.** Gross Margin rises with premium mix and price lifts, falls with deep or frequent promo. Weighted Avg Price moves with both price and mix sliders. A plan that grows GP without growing margin % is volume-led (more units at the same margin); a plan that grows both is mix-led or price-led. The two together tell you which path the integrated plan took.

Read the right side of the simulator as a stack of three layers. Coordination Band at the top tells you whether the integrated plan is worth more than the sum of its parts (Spinning), additive (Aligned), or value-destroying (Friction / Broken). Sequencing Scorecard tells you whether the plan respects the 5 cross-lever rules; an A or B is the gate for committee approval. KPI tiles (Net Revenue, Gross Profit, Volume, Gross Margin, Weighted Avg Price) tell you the headline outcomes; the Scenario Comparison chart and P&L Waterfall let you walk every line of the cascade.

The Reference Price Erosion warning is the single most important inline diagnostic: it fires whenever depth crosses 20%, regardless of the other levers. When it fires combined with a positive Price Change, Reference Price Integrity rule will also fail (the rule explicitly requires depth ≤ 20% OR no price lift). The two signals together are the structural marker that the plan is fighting itself.

Use the simulator before the cross-functional integrated annual plan goes to the operating committee. Anchor every move proposed to a Coordination Band reading and a Scorecard grade. The committee will challenge the assumption (elasticity, mix shift achievability, promo response) far more than the math, which is what the 5 sliders are for. Run the integrated plan, then run the sum-of-single-lever plan; the gap between them is the dollars only an integrated cross-lever organisation captures.

5.55 common mistakes to avoid

Diagnostic patterns that catch most misuse of this calculator in practice.

  1. Mistake 1Treating the 5 levers as 5 independent budgets owned by 5 different teams
    Symptom: The annual plan added the single-lever forecasts: Pricing forecast +2% GP from a 5% list lift; PPA forecast +3% GP from a mix shift; Trade Marketing forecast +1.5% GP from a promo plan refresh; Range Management forecast +1% GP from new SKUs. Total forecast +7.5%. Actual landed at +1.2%. Year-end attribution debates concluded that 'the levers cancelled' without the math to prove which pair cancelled which.
    Fix: **Always run the integrated 5-lever scenario in the simulator before the committee meeting, then compute the Coordination Gap explicitly.** The simulator's Sum-of-Individual versus Coordinated-Actual breakdown is the dollar number that ends the attribution debate. If the Gap is negative, the offending rule failures in the Sequencing Scorecard tell you which lever pair is friction (e.g., Reference Price Integrity failure = price plus deep promo; Premium Mix Coherence failure = premium plus deep promo; Direction Alignment failure = price up with mix down). Bring the Gap number and the failing rules to the committee; the conversation shifts from 'whose lever was wrong' to 'which lever pair must we restructure'.
  2. Mistake 2Funding a price lift with deeper promo to 'protect the volume base'
    Symptom: Pricing took a +5% list lift to recover input-cost inflation. Trade Marketing was instructed to deepen promo from 15% to 25% on the same volume base 'to protect the volume base while the list price holds'. The integrated plan landed gross profit -3% versus baseline. The Reference Price Erosion warning would have fired if anyone had run the simulator: depth 25% with price +5% trips the override that classifies the band as Broken regardless of the gap math.
    Fix: **A price lift and a deeper promo are structurally incompatible.** The simulator's Reference Price Integrity rule encodes this directly: depth ≤ 20% OR no price lift. The override on the Coordination Band (depth ≥ 25% with price ≥ +3% = Broken) is the second guard. Any plan that combines list-up with promo-deepening should fail at the planning stage. The structurally-sound alternative when input-cost inflation hits: take the price lift, hold or reduce promo depth, support retailer front-margin with on-invoice trade-term restructuring (modelled in Tool #12 manufacturer-pl-sensitivity).
  3. Mistake 3Adding SKUs to the assortment without a premium anchor
    Symptom: Range Management added 3 new mainstream SKUs to take the pack count from 5 to 8. The volume target was +4.5% (3 SKUs × 1.5% per pack). Actual volume came in at +6%, slightly better than forecast. The team reported success. The Pack Discipline rule had failed in the simulator (packs > 7 with mix < 30%) but no one had run it. Two quarters later the category buyer flagged shelf-presence-per-SKU was below the category competitive benchmark and forced a rationalisation back to 6 SKUs.
    Fix: **SKU expansion needs a premium-mix anchor.** The Pack Discipline rule encodes the principle: above 7 SKUs requires premium mix at or above 30%. The structural reason: assortment proliferation without a premium tier fragments the portfolio's positioning signal and dilutes shelf presence per SKU. The correct sequencing is: shift premium mix first (to anchor the portfolio), then add SKUs (with at least one new SKU in the premium tier), not the inverse.
  4. Mistake 4Reading Gross Profit Δ% in isolation without the Coordination Band
    Symptom: The integrated plan landed gross profit +8% versus baseline. The team reported the result as a successful coordinated plan. They did not check the Coordination Band, which read Friction (negative gap of about -2% of baseline GP, meaning the sum-of-individual-lever moves would have delivered +10% but the coordinated plan only delivered +8%). $20K was lost to lever friction. The team booked +$130K instead of the +$160K the integrated plan was structurally worth.
    Fix: **A positive GP delta is necessary but not sufficient.** Always read GP Δ% together with Coordination Band. A scenario that lands +8% in Friction band has $20K to $50K of structural value lost to lever friction; the same +8% in Spinning band has captured all the integrated value available. The structural fix when Friction shows up: identify the failing Sequencing rule (the scorecard surfaces it directly), unwind the offending lever pair, and re-run. The Coordination Band is the diagnostic that distinguishes 'we did okay' from 'we did all we could'.
  5. Mistake 5Setting the integrated GP target by summing single-lever forecasts
    Symptom: The annual plan target was set at +12% GP by summing four single-lever forecasts (price +3%, mix +4%, promo +3%, packs +2%). The integrated plan was modelled separately and showed +8% with all 5 rules passing in the Scorecard. The team rejected the +8% as 'below target' and pushed each lever harder; the resulting plan landed -1% because the harder pushes tripped Reference Price Integrity and Premium Mix Coherence. The realistic +8% target had been achievable; the +12% sum-of-parts target was structurally unachievable from the start.
    Fix: **Integrated GP targets must be set after the 5-lever simulator, not before.** The coordinated actual almost always falls short of the sum-of-single-lever claims, often by 30 to 50% of the sum, because cross-lever interactions (elasticity offsets, cannibalisation, reference erosion, mix-promo friction) eat the rest. A team that sets a 100%-of-sum target is mathematically committing to forcing through an incoherent plan. Use the simulator to find the highest-coordination-gap plan that respects the Sequencing rules; that GP number is the realistic integrated target. Anything above it requires a structural change (different elasticity, different category position, different competitive dynamics), not harder slider pulls.
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