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Trade Efficiency
Definition
A measure of how effectively trade promotion spend (such as discounts or TPRs) drives incremental sales, indicating how much sales lift is generated for each dollar invested in promotional activity.
How It's Calculated
Trade Efficiency = Incremental Sales Lift ($) ÷ Trade Spend ($)
Example
A cereal brand invests $50,000 in a TPR promotion and generates $150,000 in incremental sales. The trade efficiency is 3.0, meaning the promotion delivered $3 in incremental sales for every $1 spent.
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