Saturday, December 17, 2011

In economic analysis what is the difference between Incremental and base sales, how would they be defined?

I have been given a task to analyse the UK tea market. One component of the information I have been given looks at specific manufacturers and what has helped drive sales in terms of value and volume . Two of the major driving forces for value are 'base value' and 'incremental value' whilst in volume 'base volume' and 'incremtal volume' are important. Basically I need to know what these things are likely to mean(I dont have a business background). Thanks for any help."|||I wonder what course have you taken up? You're not going to find many people answering this question (I think) because its mostly used in consulting and usually not taught in schools. Anyway, here is the meaning:





Base sales means the sales that you can make with any promotional activities carried out (for example coupons, discounts, free gifts, bogo, etc). The sales that you can achieve just by having your product on the shelf and using advertising (again, remember advertising is different from promotions).





Incremental sales are the additional sales that you can make by conducting promotional activities (the same examples given above).





The difference in the incremental sales and base sales shows how effective your promotional campaign was.





Hope this was helpful..

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