A regional supermarket’s beverage department experienced declining revenue year-over-year. Through analysis of product category and brand-level data, the root cause is identified as the Value Brand’s price reduction, which increased its volume share from 25MM to 60MM gallons while generating lower revenue ($15M to $24M) due to the 33% price cut, thereby cannibalizing premium brands (particularly Brand A) and creating overall revenue decline of $6M in sodas.
Key Insights:
- Revenue = Price × Quantity; candidates must decompose declines across both dimensions to isolate root causes
- Pricing power is often the critical lever; the Value Brand’s aggressive discounting ($0.60→$0.40) is more impactful than volume gains
- Data segmentation is essential; category-level analysis reveals sodas declining while waters/others grow; brand-level analysis reveals Brand A decline masks Value Brand cannibalization
- Candidates should use structured frameworks (4Ps, pricing strategies, marketing differentiation) when brainstorming solutions
- Time management is tested; good candidates move efficiently through exhibits without dwelling on data that doesn’t explain the decline