Modeling the dynamic impact of promotional sales on revenue performance: An econometric analysis of Bakers Inn food outlets.
- Author
- Mashingaidze, Nokutenda
- Title
- Modeling the dynamic impact of promotional sales on revenue performance: An econometric analysis of Bakers Inn food outlets.
- Abstract
- The dynamic impact of promotional sales on the revenue performance of Bakers Inn is studied in this research. In the broader context of the fast-moving consumer goods (FMCG) sector in a developing economy, the research critically studies the performance of promotional strategy in a context of economic uncertainty. Informing both classical econometric and modern machine learning techniques such as the Autoregressive Integrated Moving Average with Exogenous Variables (ARIMAX) model, as well as the Random Forest algorithm, the study investigates the short-run and long-run impact of promotion interventions on turnover. Evidence is derived from weekly sales and promotion activity information collected for 24 months (January 2023 to December 2024). Pre-model diagnostics, descriptive statistics, and time series decomposition were employed to construct a comprehensive picture of the data before model deployment. The ARIMAX model provided interpretable outputs on the temporal dynamics between campaign inputs and revenue, while the Random Forest algorithm provided more predictive accuracy, particularly in modelling non-linarites and abrupt market transition with campaign intensity. Empirical results indicate that promotional sales greatly influence revenue, where Random Forest performs better than ARIMAX in forecasting accuracy consistently, especially in instances of high volatility. The implications from the study underscore strategic advantages in using advanced analytics in promotional planning. Additionally, the study bridges an essential research gap in the literature since it is simultaneously employing machine learning and econometric models in a Sub-Saharan African retail context a previously relatively less explored subject. By offering actionable data-driven insights to maximize the efficiency of promotions, this thesis contributes significantly both to managerial practice and research literature. The insights from the findings are not only applicable to Bakers Inn but also extendable to other FMCG firms within similarly dynamic and resource-constrained environments. In sum, this study highlights the importance of evidence-based marketing to deliver sustainable top-line growth and strategic responsiveness in emerging markets.
- Date
- June 2025
- Publisher
- BUSE
- Keywords
- Promotional Sales
- Revenue Performance
- Econometric Analysis
- Supervisor
- Mr. E. Mukonoweshuro
