Overcoming Sales Variability during a New Product Launch

HAVI’s Business Analytics team helped a leading quick-service restaurant (QSR) chain that experienced product quality issues after launching a Limited-Time Offer (LTO)...

DEMAND PLANNING

Overcoming Sales Variability During a New Product Launch

Customized promotion analytics reporting enables a quick service restaurant (QSR) chain to boost sales and reduce inventory obsolescence during a limited time offering.

Challenge

A national QSR chain launched a new product for a limited time only. the product varied widely by location and type of restaurant (e.g. stand-alone stores, retail, gas stations, etc.). This was causing product quality issues

stores had to sell at a specific volume in order to meet the operational levels that would ensure optimal product quality.  Many retail locations were not meeting the sales minimum and experiencing product quality issues and obsolescence as a result. Customer complaints about product dryness to the chain’s “800” number also increased.

The chain needed insight into what was happening at each of its 10,000+ restaurants and which specific locations were . Then, they could determine the reason for

poor performance and offer solutions for boosting sales of the product.

 

 

Solution

 

The chain sought help from long-time partner HAVI, a global leader in packaging solutions, supply chain analytics,

planning and promotions management, with deep expertise in the QSR and markets.

HAVI’s Business Analytics team afforded the chain the visibility it needed to identify the root cause and take the appropriate action to ensure the success of the limited time offering. HAVI provided a granular view of each store’s sales performance for the new product. The data included volume by week, geography

and ethnic distribution. They also delivered sales performance by store type. By providing this data on a regular basis, HAVI helped the chain see the variability in sales across its locations so they could follow up with underperforming stores. HAVI worked closely with the supply chain group to ensure production was in line with actual sales and to effectively manage supply across the system to avoid significant overages or shortages of product.

The launch was a success that boosted sales overall and depleted product for minimal obsolescence. In fact, total inventory remaining at the end of the limited time offer represented just

0.116 percent of sales. More importantly, HAVI helped the chain develop a long-term solution for the product quality and obsolescence issue among underperforming stores: New packaging and an improved order fulfillment process.

When the chain introduced another new product for a limited time offer, it used different, smaller packaging that made it easier for lower volume stores to move through the product more quickly.

Those stores also implemented a make-to-order process so there would be fewer product quality issues. Consumer complaints

to the “800” number about product quality for a subsequent promotion dropped significantly.

 

Benefits

  • Increased sales – provided visibility across the system, enabling the chain to identify underperforming stores and work with them to minimize product quality issues and improve performance.
  • Reduced obsolescence – worked with suppliers and helped ensure production was in line with actual sales and managed supply across the system to avoid obsolescence.
  • Improved operations – helped the chain develop long- term solutions to address product quality and obsolescence concerns that could be applied to subsequent product launches.