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CPG Glossary

General Terms to know in CPG

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Written by Cassie Crail
Updated over a week ago

Terms:

  1. All Commodity Volume (ACV): is a common way to measure the size of a store or retailer by determining the total retail dollar sales for an entire store across all products and categories

  2. Case Code: (also known as Universal Product Code) the product’s distinctive machine-readable numeral code on its casing and pallet loads.

  3. Equivalized (EQ) Sales: the volume of a product sold at retail.

  4. Forward Buy: (also known as Buyout) is the method holding products until the end of a promotion to increase sale profits.

  5. Lift: refers to the percentage of increase in sales, calculated by divide incremental sales from base sales and multiplying it by one hundred.

  6. Line Extension: when brand expand their product line to offer a new flavor, formulation, scent, size or packaging shape to the portfolio

  7. Overlay: A secondary tactic included in a promotion to generate additional awareness or participation, or to customize the promotion for a specific retail account.

  8. AOP: Annual Operating Plan

  9. Perpetual Inventory System: is the system that maintains an expected inventory level within a store that reflects all physical product movement sales, deliveries, credits, etc.

  10. All Outlet Combined (AOC): The total market for a product (or brand/product category) across all outlets, including retail, direct, and e-commerce.

  11. Purchase Allowance: a deal set by manufacturers to retailers that allows them to reduce the case price if an order is received during a promotional time period.

  12. Tie-In Promotion: a promotional technique to pair two products together with a deal on one of the goods when a consumer purchases the other product.

  13. Trade Promotion: when a retailer is paid by a manufacturer to launch in-store techniques to increase product sales.

  14. Trade Rate: Special price offered by a manufacturer or distributor to retailers, wholesalers, or other businesses in the same industry, aiming to incentivize them to purchase and promote the products. These rates are often lower than the regular consumer price and can include discounts, rebates, or other incentives

  15. UCS (Uniform Communications System) Ordering System: is an electronic system that transmits data, orders, promotional information and price changes between manufacturer and distributor.

  16. UPC: Universal Product Code

  17. MBC: Manufacturer Charge Back: deals are promotional events where the retailer buys a brand’s product from a distributor at a discounted rate. The retailer then passes that discount on to the consumer during a pre-scheduled promotional period. This chain of events unnecessarily involves the distributor in a discount which in some cases could be arranged solely between brand and retailer, often leading to higher than anticipated costs and lower than anticipated discounted prices on shelf.

  18. 3PL: Third-Party Logistics Warehouse outsourcing of logistics and supply chain management functions to specialized companies

  19. Trade spend: refers to the funds allocated by manufacturers to promote and sell their products through various channels such as retailers, wholesalers, and distributors. Lever to drive spend

  20. Trade: The money invested by manufacturers and suppliers in various promotional activities to drive sales and increase market share

  21. ERP: Enterprise Resource Planning: Accounting system

  22. Deduction: Promotion discounts removed from total

  23. Invoice Payment: Amount paid on invoice

  24. DC: Distribution Center

  25. Nielsen/IRI Data - Market research data from major CPG tracking companies.

  26. Syndicated Data - Market research sold to multiple companies in an industry.

  27. POS Data - Point of Sale data showing actual retail transactions.

  28. Panel Data - Consumer purchase behavior tracked over time.

  29. Lift - Incremental sales generated by a promotion or marketing activity.

  30. Baseline Sales - Normal sales volume without promotional support.

  31. Cannibalization - When a new product reduces sales of existing products from the same company.

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