With regards to base and incremental sales, which statement is true?

Base sales refer to the regular or normal sales volume expected under typical conditions, without the influence of promotional activities. This concept is crucial in category management as it helps analysts understand the underlying demand for a product. By defining base sales in this way, businesses can accurately gauge the impact of promotions or marketing efforts on overall sales figures.

Understanding base sales allows category managers to identify how much of the sales volume is attributed to standard demand versus promotional activity. This differentiation is essential for effective planning and forecasting, as it enables businesses to measure the true effectiveness of their promotional campaigns and adjust their strategies accordingly.

In contrast, incremental sales refer to the additional sales generated as a result of promotions or other marketing strategies and are not defined solely by price increases. Moreover, base sales do not include promotional sales, which distinguishes them further. Therefore, knowing base sales helps in understanding core customer behavior and purchasing patterns devoid of promotional influence.