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Source-of-Volume Decomposer

Decompose promotional volume into its four canonical sources (Switching / Expansion / Pantry / Consumption), surface the dominant source, and read the Net Value verdict before signing the trade plan. The same interactive model the full RGM Academy course uses for TPO Lesson 2 — no auth, no paywall.

Updated 23 April 2026Extracted from the Trade Promotion Optimisation module, lesson 2: Source of Volume Decomposition
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Scenario walkthrough

Tap any section to explore in detail

5.1Scenario setup

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

You are the Trade Marketing Director on a mainstream biscuit brand. Your Q4 trade plan has a 20%-off feature-and-display event on the 250g SKU — $4.99 → $3.99 RSP. Sales delivered: total promoted volume was 15K units versus a 5K/week baseline, so the gross incremental uplift was 10K units. The Sales team wants to run the event again in Q1. Finance has asked for the source-of-volume decomposition before signing off — they want to know whether the 10K uplift was genuine growth or whether it was mostly pantry loading and loyal-buyer subsidy.

Your job by Friday: decompose the 10K uplift into its four canonical sources (Brand Switching / Category Expansion / Pantry Loading / Consumption Increase), calculate the Productivity Ratio and Net Value, and return a GOLDEN / PRODUCTIVE / MIXED / UNPRODUCTIVE verdict to Finance. Then stress-test whether a deeper (30%) discount or a shallower (15%) discount would move the mix in a better direction.

Your objective

Use the decomposer to diagnose the current mix, identify the dominant source, classify the event, and test one mix-improvement hypothesis before committing the Q1 trade plan.

Key assumptions

  • The four sources are mutually exclusive and sum to 100% of gross incremental uplift. Consumption Increase is the 100-residual — it is NOT a separate slider. This matches the lesson sandbox exactly; it also means the three sliders (switching / expansion / pantry) cannot sum above 100% (an overAllocated warning fires if they do, and the tool clamps consumption to 0).

  • Productive volume = Switching + Expansion + Consumption. Pantry is the ONLY source treated as unproductive. This reflects the practitioner reality: switching 'steals' share (productive for the manufacturer, durable if shoppers stay), expansion brings genuinely new category demand (productive, durable), consumption increase reflects habit-change (productive if the habit sticks, collapses back into baseline if not); pantry is pure timing shift (bought now instead of next week, creating a post-promo dip).

  • Net Value = Productive Margin − Unproductive Margin Cost. Productive volume earns $1.89/unit (the promo margin). Pantry volume costs $1.00/unit — the gap between the full margin ($2.89) and the promo margin ($1.89) — because that volume WAS coming anyway and you just paid a discount on it for no net new demand. This is the core economic claim the entire framework rests on.

  • SoV Quality state machine: GOLDEN (productivity ≥70% AND expansion share ≥25% of total uplift — mutual-growth event the retailer cannot say no to) · PRODUCTIVE (productivity ≥70% but expansion share <25%) · MIXED (productivity 50-69%) · UNPRODUCTIVE (productivity <50%). The 25% expansion threshold is what separates a 'good for the manufacturer' event from a 'good for BOTH' event.

  • The scenario fixtures are fixed in this sandbox (one 250g biscuit SKU, $4.99 → $3.99, $2.89 → $1.89 margin). For a real-world decomposition, the SKU, RSP, discount depth, and margin structure all vary; this tool teaches the STRUCTURE and the state machine, not the exact dollar math for your specific category.

5.2Controls & toggles

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

ControlRangeDefaultWhat it changes
Total Promotional Uplift slider2,000 – 25,000 units (500-unit step)10,000 units (mid-range self-demo)Total incremental units beyond baseline. Scales every dollar metric linearly; productivity ratio and SoV quality are driven by MIX, not scale — so moving this slider changes Net Value proportionally without moving the quality verdict.
Brand Switching %0 – 80% (5% step)30% (3,000 units at 10K uplift)Productive source. Volume stolen from competitor brands. Counts toward the 70%+ productivity threshold; does NOT count toward the 25% Expansion threshold for the GOLDEN band (so a pure-switching event is PRODUCTIVE but never GOLDEN).
Category Expansion %0 – 50% (5% step)15% (1,500 units at 10K uplift)Productive source AND the GOLDEN-trigger. At expansion share ≥25% of total uplift, the quality verdict flips to GOLDEN (assuming productivity ≥70%). The single most valuable source — retailers measure their own category growth on this line.
Pantry Loading %0 – 70% (5% step)35% (3,500 units at 10K uplift — the dominant source at seed)Unproductive source. Costs $1.00/unit (full margin minus promo margin). Creates the post-promo volume dip. The single biggest net-value destroyer; reducing pantry share is the highest-leverage mix improvement.
Consumption Increase % (residual)Auto-computed = max(0, 100 − sw − ex − pl)20% at the seedProductive source IF the habit forms. Cannot be directly set — derived as the 100-residual of the other three sliders. If the other three sum above 100, an overAllocated warning fires and consumption clamps to 0.
Productivity Ratio tile0% – 100%65% at seed (MIXED verdict)The summary metric. Coloured green ≥60%, amber 45-60%, red <45%. Combined with expansion-share thresholds → SoV quality verdict.
Net Value tileNegative to +$30K++$8,785 at seedProductive margin minus pantry margin cost. Green if positive; red if negative. Negative Net Value means the event actively destroyed value even though total volume went up.
5.3Step-by-step exploration

7-step guided exploration of the scenario.

  1. Read the default seed — a MIXED event with net-positive value

    Leave every control at default. Read the four KPI tiles and identify the dominant source.

    Expected outcome: Switching 3,000 · Expansion 1,500 · Pantry 3,500 (dominant) · Consumption 2,000. Productive volume 6,500 (65%); Unproductive 3,500. Productivity Ratio 65% → MIXED band (coloured amber). Productive Margin $12,285; Unproductive Margin Cost $3,500; Net Value +$8,785 (positive, coloured green). The event is net-positive on value but barely clears the MIXED / PRODUCTIVE boundary — pantry loading at 35% is eating meaningfully into the net value.
  2. Find the dominant source and understand why it matters

    Look at each of the four source-volume tiles (Switching 3K, Expansion 1.5K, Pantry 3.5K, Consumption 2K). The highest is the 'dominant source'.

    Expected outcome: Pantry Loading is dominant at 3,500 units (35% of total). This is the event's single biggest economic problem: pantry volume doesn't generate new demand; it just borrows from the future. A dominant-pantry event tells you the promo mechanic (20% off, featured price) is being fished predominantly by existing loyal buyers — the trade plan is subsidising a purchase that would have happened anyway.
  3. Shift toward the GOLDEN quadrant — the trade plan you want

    Drag Switching to 0%, Expansion to 50%, Pantry to 0% (Consumption auto-fills to 50%).

    Expected outcome: Expansion 5,000 + Consumption 5,000 = productive volume 10,000 (100%). Productivity Ratio 100% AND Expansion share = 50% of total uplift (well above the 25% GOLDEN threshold). Net Value = 10,000 × $1.89 − 0 = **$18,900**. SoV Quality → GOLDEN. This is the mutual-growth scenario the whole TPO framework aims for — the retailer grows their category, the manufacturer gains share, and the margin math works because no pantry cost eats into the productive margin.
  4. Force the UNPRODUCTIVE verdict — the event that destroys value

    Drag Switching to 0%, Expansion to 0%, Pantry to 70% (Consumption auto-fills to 30%).

    Expected outcome: Pantry 7,000 · Consumption 3,000. Productive volume 3,000 (30%). Productive Margin $5,670; Unproductive Margin Cost 7,000 × $1.00 = $7,000. Net Value = $5,670 − $7,000 = **−$1,330** (NEGATIVE, coloured red). SoV Quality → UNPRODUCTIVE. The event raises total volume on the surface but destroys $1,330 of net value underneath — classic pantry-loading trap. This is the category of event Hook claims where 'over one-third of promotions have negative net uplift after cannibalisation analysis' comes from.
  5. Test the switching-only hypothesis — PRODUCTIVE but NOT GOLDEN

    Reset. Then drag Switching to 80%, Expansion to 0%, Pantry to 0% (Consumption auto-fills to 20%).

    Expected outcome: Switching 8,000 + Consumption 2,000 = productive 10,000. Productivity Ratio 100%. Net Value = 10,000 × $1.89 = **$18,900** (same dollar number as Step 3's GOLDEN case). BUT the SoV Quality verdict is **PRODUCTIVE**, not GOLDEN — because the expansion share is 0% (below the 25% threshold). Lesson: the DOLLAR outcome can be identical to a GOLDEN event but the retailer story is very different. Pure switching wins share from a competitor; it doesn't grow the CATEGORY. The retailer category manager sees no net new shoppers — so the sell-in narrative collapses the moment the conversation moves from 'your brand' to 'our category'.
  6. Scale test — does 2.5× the volume deliver 2.5× the value?

    Reset. Drag Total Uplift from 10,000 to 25,000 (2.5× the base). Leave the mix at default (30 / 15 / 35, Consumption 20).

    Expected outcome: Switching 7,500; Expansion 3,750; Pantry 8,750; Consumption 5,000. Productive volume 16,250 (still 65% — the mix is unchanged). Productive Margin = 16,250 × $1.89 = **$30,712.50**. Unproductive Margin Cost = 8,750 × $1.00 = **$8,750**. Net Value = **$21,962.50**. That's exactly 2.5× the 10K seed's $8,785. Net Value scales LINEARLY with total uplift IF the mix is held constant — the leverage is in shifting the mix, not in chasing more uplift at the same mix.
  7. Map back to the Net Incremental Profit Bridge and Pricing cross-references

    Open the related-concept links (Promo ROI, Promo Baseline, Promo Mechanics, 13 TPO Levers). Cross-reference the [Promo ROI Calculator](/tools/promo-roi-calculator) at the same scenario.

    Expected outcome: Understanding that the SoV decomposer is the DIAGNOSTIC lens — it tells you WHERE the volume came from. The [Promo ROI Calculator](/tools/promo-roi-calculator) is the MONEY equation that takes the SoV output as input and returns the Net Incremental Profit Bridge verdict (BEST / GOOD / REVIEW / STOP). The two tools are complementary: SoV explains WHY a promo event scored the way it did on Promo ROI; Promo ROI quantifies the dollar impact of the SoV mix. Cross-lesson: only Category Expansion cleanly clears the Pricing Lesson 2 "+8.7% operating profit per 1% price lift" opportunity-cost hurdle — everything else is borrowing from competitors, from future purchases, or from habit-elasticity that may not stick.
5.4Reading the output

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

KPIFormulaHow to read it
Productive VolumeSwitching + Expansion + ConsumptionUnits that justify the promo spend — either new demand (Expansion), stolen competitor demand (Switching), or durable habit change (Consumption). The numerator of the productivity ratio.
Unproductive VolumePantry (loading) onlyUnits bought now that would have been bought later at full price. Creates the post-promo dip. Costs $1.00/unit (full margin minus promo margin) — pure subsidy on already-captured demand.
Productivity RatioProductive Volume / Total Uplift × 100Green ≥70%, amber 50-69%, red <50% — matched to the SoV-quality state-machine gates (PRODUCTIVE ≥70%, MIXED 50-69%, UNPRODUCTIVE <50%). The single most important summary number; drives the SoV quality verdict in combination with Expansion share.
Net ValueProductive Volume × $1.89 − Pantry × ($2.89 − $1.89)Green if positive, red if negative. Negative = the event destroyed value even though total volume went up. The CFO line every trade plan must clear.
SoV Quality verdictstate machine over productivity + expansion shareGOLDEN (≥70% productivity AND ≥25% expansion share) · PRODUCTIVE (≥70% productivity) · MIXED (50-69%) · UNPRODUCTIVE (<50%). The one-word summary for a review deck.
Dominant Sourceargmax over {switching, expansion, pantry, consumption}The single largest source by units. A dominant-pantry event is the archetype bad promo; a dominant-expansion event is the archetype GOLDEN promo; switching- or consumption-dominant events need case-by-case judgement on durability.

Read Productivity Ratio first — that's the gate on whether the event crosses the 50% threshold into the viable zone. Then read Expansion share — that's the gate on whether it crosses the 25% threshold into GOLDEN. Then read Net Value — that's the dollar outcome. Finally, read Dominant Source — that's the single-word diagnosis of what kind of promo mechanic this is: 'a switching event', 'an expansion event', 'a pantry-loading event', 'a consumption-building event'. Each has a different trade-marketing narrative and a different durability horizon.

5.55 common mistakes to avoid

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

  1. Mistake 1Treating Net Value as the only decision metric
    Symptom: A Step 5-style scenario (switching 80% → net value $18,900, same as GOLDEN) gets approved, and the retailer category manager pushes back hard in the next cycle because "our category didn't grow."
    Fix: Net Value is the manufacturer-side outcome. SoV Quality (GOLDEN vs PRODUCTIVE vs MIXED) is the relationship-side outcome. Always use BOTH. A high-Net-Value PRODUCTIVE event is durable for YOU but is not a retailer-shareable story. Events that hold the retailer relationship long-term need the GOLDEN verdict, which requires Category Expansion ≥25% of total uplift — a mechanic + communication combo (feature + display + a genuine category claim, not just a price-off).
  2. Mistake 2Confusing gross incremental uplift with net incremental uplift
    Symptom: A trade plan claims +10,000 incremental units and gets approved; Q+1 analysis shows baseline dipped 3,500 units for 3 weeks afterward, so the REAL net gain was ~5,500 units.
    Fix: Pantry loading creates a post-promo dip roughly equal to the pantry-loaded volume (3,500 units in our default = 3,500 unit dip spread over 1-4 weeks). The SoV decomposer's `unproductive` tile is an early-warning signal for this dip. Always report net-incremental-after-dip, not gross-incremental — the Promo Baseline Estimator (Tool #10) quantifies the baseline-shift signal directly.
  3. Mistake 3Over-indexing on Brand Switching as 'productive'
    Symptom: The switching share is the biggest source, and the trade plan declares victory — then in Q+2, the same shoppers switch back to the competitor's counter-promo and the share gain evaporates.
    Fix: Switching is productive ONLY if the switched shopper stays. Durability depends on (a) whether the switched shopper experiences a loyalty trigger (e.g. the product is genuinely better, or the promo buys one-time trial of a new item), (b) whether the competitor runs a counter-promo within 4-8 weeks. For "switching-dominant" events, always pair the SoV decomposition with a post-promo repeat-purchase cohort analysis; switching without repeat-purchase is a temporary share lift, not a durable win.
  4. Mistake 4Ignoring the Consumption Increase share because 'it's the residual'
    Symptom: Trade plan commentary treats Consumption as 'whatever is left' and doesn't design for it. Result: Consumption share stays low (0-15%), and the habit-forming opportunity is missed.
    Fix: Consumption Increase is productive volume IF the trigger that caused it persists post-promo. Designing for Consumption means the mechanic has a habit-forming element: subscribe-and-save, buy-more-use-more multi-packs, usage-occasion claims on pack ('great for lunchboxes'). The Consumption lever is under-invested in most FMCG trade plans — events that deliberately design for Consumption Increase tend to outperform at the 12-month window even when their immediate Net Value is lower than a pure-Switching event.
  5. Mistake 5Using the 20%-off scenario math to make decisions about a 10%-off event
    Symptom: A 10%-off shallow-discount event gets scored using the same productivity-ratio thresholds as the 20%-off default, and a PRODUCTIVE verdict turns out to be MIXED at shipped calibration.
    Fix: The thresholds (productivity ≥70%, expansion ≥25%) are relatively stable across discount depths, but the ABSOLUTE numbers are not. A shallower discount typically shifts mix: less pantry loading (shoppers stockpile less at 10% off than 20% off), more switching (the 10% is usually too shallow to attract category expanders). The tool fixes scenario inputs at 20% off / $1.89 promo margin — to use it as a decision aid for other discount depths, you need to re-derive the promo margin mentally and adjust the mix expectations. For a real multi-depth comparison, cross-reference the [Promo ROI Calculator](/tools/promo-roi-calculator) which lets depth vary.
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This calculator is the sandbox slice of Lesson 2: Source of Volume Decomposition. Each of the other 7 Trade Promotion Optimization lessons teaches a complementary concept that sharpens how you read the output above.

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