2015 Readers' Choice Survey: Trade Promotion Management
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Trade promotion management (TPM) continues to be an area of debate as companies still deem it a worthy investment, but are still unsatisfied with its effectiveness. Dale Hagemeyer, research vice president for Gartner, Inc., analyzes the TPM landscape to help identify the best overall trade strategy.
Can you comment on this list?
Hagemeyer: There are several surprises here. Specifically because IBM offered a Trade Promotion Optimization (TPO) tool but never had a full TPM solution, and because it stopped seeking new clients last year. JDA is kind of a similar story to my knowledge, but analyst relations people can neither confirm nor deny whether it is still in the TPM business. Otherwise, it is a solid list of key players in the space for North America. My expectation would have been that IBM and JDA would have been replaced by up-and-comers such as CPG Toolbox and UpClear or possibly ITC Infotech as an extension built on the Oracle TPM platform.
How would you characterize TPM maturity today? What are leaders doing differently? How should TPO fit into an overall trade strategy?
Hagemeyer: It is quite mature and comes in all sorts of permutations from 15 vendors I am tracking in the global marketplace ranging from on-premise to multi-tenant SaaS based on preferences. Leaders are typically moving beyond merely using the TPM system for checkbook functionality and doing integration to ERP and other systems to facilitate more automated post event analysis. They are also looking at TPO as a way to predict promotional outcomes and change the dialog with retailers from “giving them more money for promotions we run year after year” to investing in promotions that “have a good probability of being mutually beneficial”. In summary, TPM is essential to managing the mechanics of the promotion and TPO is essential to improving outcomes.
How should retail execution fit into a trade promotion strategy?
Hagemeyer: The retail execution list is a good addition to the survey this year. I am seeing momentum in this area because the best promotional plan can fail if it doesn’t get executed at the store level. Basically, TPx is all about the plan and retail execution is all about making it happen and monitoring the particulars. It makes sense for them to be linked so the tactics specified in the promotional plan automatically get pushed to the field for execution. And, to track compliance quickly can help with “in flight” corrections while the promotion is still running because the linkage between TPM and retail execution is bi-directional. However, many CG companies purchase the two solutions at separate times and don’t take the time to link them. I think this has to do with the same rationale for not doing the integration work for TPM to be able to do post even analysis — they run out of time and money because it isn’t considered essential or in scope. But to get the full value out of the solutions, I believe they should work together.