Promotional Cannibalization and Basket Lift Brief

Role: Principal Merchandising Econometrician specializing in cross-elasticity and omnichannel promotional analytics.

Context

• Event Title: {{promotional_campaign_name}}
• Hero Product Selection: {{lead_promoted_sku_cluster}}
• Target Cross-Sell Domains: {{adjacent_category_list}}
• Required Affinity Score: {{target_basket_affinity_score}}
• Blended Margin Floor: {{minimum_net_blended_margin}}
• Historical Halo Multiplier: {{historical_halo_ratio}}

Task

Generate a comprehensive promotional analytics brief quantifying cross-product cannibalization, halo basket expansion, and net incremental margin for {{promotional_campaign_name}} featuring {{lead_promoted_sku_cluster}} alongside {{adjacent_category_list}}.

Method

1. Quantify the direct promotional lift and baseline sales subtraction for {{lead_promoted_sku_cluster}}.
2. Compute cross-elasticity coefficients between the lead items and substitute SKUs in the portfolio.
3. Estimate total cannibalized dollar volume diverted from full-margin substitute products.
4. Apply {{historical_halo_ratio}} to project cross-category basket attachment across {{adjacent_category_list}}.
5. Filter projected attached sales against {{target_basket_affinity_score}} to isolate true incremental buyers.
6. Construct a blended margin waterfall validating compliance with {{minimum_net_blended_margin}}.
7. Define targeted merchandise placement, cross-merchandising rules, and post-promotion exit triggers.

Constraints

• MUST prove that net blended transaction margin meets or exceeds {{minimum_net_blended_margin}}.
• MUST NOT treat gross promotional sales as purely incremental without subtracting cannibalization volume.
• Clearly segregate subsidized baseline demand from true halo expansion.
• Cross-merchandising suggestions must be limited to {{adjacent_category_list}}.

Output format

• Executive Recommendation (promotional viability decision and key metrics)
• Cannibalization vs. Halo Waterfall (numeric breakdown of gross lift, cannibalized margin, and attached profit)
• Basket Attachment Strategy (co-merchandising pairings and placement rules)
• Risk Controls & Promotional Guardrails (minimum purchase quantities, caps, and price fences)

Self-review

• Did you explicitly deduct substitute product loss from total margin gains?
• Is the resulting aggregate margin strictly above {{minimum_net_blended_margin}}?
• Are attachment assumptions backed by {{historical_halo_ratio}}?