Promotions Matrix

The Promotions Matrix is a tool used to evaluate the potential of a promotional activity and decide whether to pursue it or not. It is based on two criteria: the expected return on investment (ROI) and the risk associated with the activity.

At a very high level, the Promotions Matrix is used in the context of business, marketing, finance.

Promotions Matrix quadrant descriptions, including examples
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What is the Promotions Matrix?

A visual explanation is shown in the image above. The Promotions Matrix can be described as a matrix with the following quadrants:

  1. High ROI, Low Risk: Activities with high ROI and low risk should be pursued, such as offering discounts to loyal customers.
  2. High ROI, High Risk: Activities with high ROI but high risk should be evaluated carefully, such as launching a new product.
  3. Low ROI, Low Risk: Activities with low ROI and low risk should be avoided, such as offering discounts to non-loyal customers.
  4. Low ROI, High Risk: Activities with low ROI but high risk should be avoided, such as launching a new product in a saturated market.

What is the purpose of the Promotions Matrix?

The Promotions Matrix is a tool used to evaluate the potential of a promotional activity and decide whether to pursue it or not. It is based on two criteria: the expected return on investment (ROI) and the risk associated with the activity. The matrix is divided into four quadrants, each representing a different outcome of the evaluation.

The top-left quadrant represents activities with high ROI and low risk. These activities should be pursued as they offer a great return with minimal risk. The top-right quadrant represents activities with high ROI but high risk. These activities should be evaluated carefully before deciding to pursue them, as the high risk may outweigh the potential rewards. The bottom-left quadrant represents activities with low ROI and low risk. These activities should be avoided, as they offer little reward with minimal risk. The bottom-right quadrant represents activities with low ROI but high risk. These activities should be avoided, as the high risk may outweigh the potential rewards.


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What templates are related to Promotions Matrix?

The following templates can also be categorized as business, marketing, finance and are therefore related to Promotions Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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