In today’s competitive consumer goods market, manufacturers spend 8-30% of gross revenues on trade promotion management (TPM) and this percentage continues to rise. Although trade spend represents the #1 controllable overhead for most businesses, there has been relatively little focus on improving the efficiency and effectiveness of trade promotions:

• Budgeting, planning, execution, administration and evaluation of trade promotion activities historically takes place in different functional groups, although decisions made during one phase of the promotion lifecycle can have dramatic impact on later phases;
• Manual, Excel-based planning continues to be the method for managing huge trade spend budgets, despite being prone to error and difficult to scale;
• Most organizations have concentrated on removing inventory from the supply chain, but this results in promotional stock-outs when marketing and operations do not collaborate effectively.

New challenges demand fresh solutions

While antiquated tools and processes continue to cost organizations millions of dollars each year, recent changes have dramatically accelerated the imperative to improve performance in this area:

Success from solving the critical issues

Given this industry imperative, most organizations have accumulated significant data and taken preliminary steps to address budgeting, planning, accounting and analysis processes, but most projects fail to provide adequate responses to the critical issues driving trade promotion efficiency and effectiveness:

• Is all trade promotion information in a single repository easily accessible by decision makers across the entire lifecycle?
• Is this information comprehensive, reliable, accurate and timely?
• Is it presented in a meaningful manner with the flexibility to accommodate frequent, ad hoc requests for information?
• Are planned promotions measured in terms of all associated costs and net margin contribution to accurately measure a return on trade investment (ROTI)?