A Need For Flexibility

With a portfolio of brands that include Aunt Jemima, Mrs. Butterworth's, Log Cabin, Hungry Man, Celeste and Lenders, Pinnacle Foods Group switched trade promotion management (TPM) solution providers in August 2004 to better support its growth. The switch arrived in the form of MEI whose solutions serve up the flexibility Pinnacle was seeking to accommodate the trade promotion challenges being faced in a changing retail environment.

What appealed to Pinnacle most about MEI is the ability for the company's flagship offering, Consumer Goods Suite, to support live-accrual funding, introduce more controls related to overspending and forecasting, provide greater visibility of trade and consumer marketing plans, and facilitate post-promotion analysis.

Going Live in 2005
Pinnacle was able to fully implement and go live with the MEI solution in April 2005. What were the keys to success in the implementation?
"We had a team made up of a cross-section of the business -- finance, sales, business development and IT," says Maureen Burcher, director of corporate applications for Pinnacle. "We were also committed to making as few changes as possible to the software. We did this by reengineering our business processes when necessary and when we were able to do so."

MEI's Trade Promotion Management tool provides improved control over trade spending budget, facilitates integration of forecasting and promotion plans, provides a more effective reconciliation of deductions and payments, and allows for "drill down" and drill through" analysis at any level of the business.
There are five key processes in the TPM solution:

• Headquarter Planning: This provides the ability to create a "top down" operating plan that outlines the sales, budget and profit objectives. This phase contains four elements: sales objective definition (objectives for sales volume), budget objective definition (objectives for total trade spending), marketing event creation (consumer marketing events that will take place during the year) and objective revision (which take place when unexpected events occur during the year).

• Account Planning: This provides the ability to create base forecast and promotions as part of the "bottom up" planning. This phase contains three elements: forecast management (ability to enter and manage the base non-promoted sales volumes, as well as giving visibility to the top-down objectives), promotion creation (which are entered and managed in support of the overall account planning process) and promotion approval (an embedded workflow featuring checks and balances).

• Account Execution: This provides the ability to evaluate and modify forecasts and promotions, while tracking the actual promotion results. This phase contains four elements: base forecast maintenance (maintaining changes to the base forecast numbers), promotion maintenance (updating promotions as changes occur in the market), promotion performance tracking (determining if the promotion was successful) and marketing event maintenance (maintaining marketing events as they change through the year).

• Reconciliation: This provides the ability to reconcile deductions, create payments and allocate spending to individual promotions in order to understand their effectiveness. This phase contains two elements: payment creation (payments are created as actual sales are entered) and deduction reconciliation (which occurs as deductions are fed into the system).

• Analysis: This provides the ability to conduct analysis during each of the four phases above. More specifically, the information allows users to create plans, track sales actuals versus sales forecasts, monitor promotion performance and understand trade spend. Standard analysis includes sales summaries, spending summaries, promotion performance analysis, volume analysis and account profitability.

Reporting the Benefits
"Users really like the reporting within MEI," says Burcher. "They are able to use the reports to manage their trade funds in a live accrual environment. We were not able to do this in the past."

Users also like the ease of use. "They say it is much easier to use than any software we've had in the past," she continues. "Data entry is easy, and reporting is much simpler." Benefits that Pinnacle is seeing include increased salesforce effectiveness, better performance monitoring and increased control over trade spending activities.

In terms of the future, Burcher sees even more opportunities. "For example, there is a piece of functionality in MEI that we would like to begin using," she notes. "Now that we are live and stable with the software, this will be the next phase."

This will involve incorporating the consumption of Information Resources, Inc. (IRI) data into the product, which will provide Pinnacle with even better analysis. This information is always useful to the field says Burcher as it provides information on where there might be diverting or forward buys.