10 Obstacles for Trade Spend Effectiveness
Trade promotions are the second largest cost item on a consumer goods (CG) manufacturer's P&L statement, so it's no secret that they often struggle to effectively manage their trade promotions spend. And for global CG companies, the need to stop the bleeding from their trade spend is magnified by their desire to maximize growth opportunities in foreign markets. There is no one-size-fits-all approach to tackling this, but there are key issues that global CG firms must consider when managing trade promotions.
On Sept. 15, 2011, during a CGT web event, Simon Ellis, Practice director, Supply Chain Strategies for IDC Manufacturing Insights, shared his perspective on the CG industry when it comes to trade promotions. Derick Jose, vice president, Data & Analytic Solutions (DAS) Group, and Naveena KL, Program director, CPG & Manufacturing from MindTree Ltd., were also on hand to share their experiences from a solutions provider standpoint.
--Ellis kicked off the event by setting the stage for trade promotion management (TPM) including some of the challenges, as well as going over some survey data conducted by IDC Manufacturing Insights and CGT. He listed the top 10 challenges when it comes to TPM such as spend effectiveness and ability to measure the ROI; the lack of good TPM/TPO tool; data accuracy and availability and more.
“Global reach frankly complicates the problem for large consumer goods companies, particularly in managing across traditional and modern trade companies,” Ellis explained. He went over what some leading companies are doing when it comes to TPM. For example, they are embracing people, process and technology; focusing on key promotions and key customers where necessary; and focusing on promotional effectiveness — not bottom line dollar savings.
--Jose and KL revealed the nuances associated with various geographies and markets, and the best practices on managing trade promotions; the good and bad of build versus buy versus rent options for implementing a trade promotion solution; and how companies achieve optimization in trade promotion spending through data harmonization and advanced analytics.They also shared how a Global Fortune 500 CPG company adapted a single trade promotion solution in more than 30 countries across Asia Pacific, Middle East and North Africa, Central and Eastern Europe and Latin America enabling greater ROI.
To listen to this web event in its entirety, click here.