Concerned about the cost and efficiency of your trade promotion spending – You are not alone!

Studies indicate that:

  1. 2/3 of CPG executives are concerned about the cost and efficiency of trade spending,
  2. 50% or more of the trade promotions do not meet objectives,
  3. 18% of CPG manufacturers admit they have no mechanism to measure effectiveness,
  4. over 40% of the trade promotion events are not ranked or analyzed,
  5. there are big capability gaps in critical areas of TPM products such as promotion planning, reporting and analysis, and account profitability.

The net result is that 70% of the CPG manufacturers surveyed indicate the number one area they want to improve is their trade promotion effectiveness.

What’s scary is that the majority of the companies in this survey are larger companies that have more resources in terms of people, time and applications than the typical small or medium sized CPG manufacturer.

So what does the smaller CPG manufacturer do? You need 2 things:

1 – A superior TPM System. The complexity of managing trade spending is just too hard to do with Excel, a 1990’s technology. Today the solutions have progressed significantly and with the advent of software as a service (SaaS) cloud technology it’s a subscription model where you just sign into an existing solution that is being used by multiple CPG manufacturers. Since it’s a common solution used by multiple CPG manufacturers the product improves with best practices at a faster rate. Also the implementation and integration into your ERP solution is also easier since it’s likely been done with your system before at another manufacturer. It’s simply a better, quicker, less expensive, and less binding process.
2 – But you need to go beyond just “managing” trade spending to maximizing trade promotion effectiveness. You need the expertise and resources to utilize the TPM product, integrate syndicated and SPIN data, and do thorough analysis of your trade spending by key retailers and key promoted groups. You will be amazed at how much money is being wasted or at best sub-optimized with some retailers. You can significantly improve your ROI. It comes down to finding people that are trade experts who worked at major CPG manufacturers with experience analyzing and managing trade spending. This is harder as the resources to do this are much less available, but they are out there.

Get the help you need: contact Fred Schroeder at 847-342-1095 ext. 4011 or fschroeder@adesso-solutions.com

When It Comes To Trade Spending, All Retailers Are Not Created Equal

We have been big proponents of the concept of “Consistent Complexity” when it comes to CPG manufacturers dealing with the trade.

The premise is while trade spending is complex, that complexity is the same regardless of the size or type of CPG manufacturer. So while you can’t use the same trade promotion approach with every retailer, most CPG manufacturers have to deal with the same retailer the same way.

For example, Publix uses BOGO’s. Therefore, different CPG manufacturers can be helped by trade experts familiar with the different accounts and how they handle trade spending.

However, there is also the fact that while all retailers are looking to take as much of your trade dollars as possible, there is a big difference between how retailers extract those dollars. Therefore, the time and effort spent maximizing the effectiveness with your trade dollars doesn’t always match up with your top sales accounts. For example, Walmart is EDLP. Not much trade promotion management issues there. However, go to the major retailers in the northeast and deal with Wakefern (Shoprite), Stop N Shop, Keyfood, A&P, Pathmark, CNS among others and you deal with a myriad of overlapping trade promotion programs, diverting, double billing for the same promotion etc., that makes the effort, money, and approach extremely complicated to manage, to control and to plan for the future.

Therefore, you need both a TPM solution that can handle all these variants and trade experts with experience to help navigate you to TPE – trade promotion effectiveness.

You are not alone! If you are concerned about the cost and efficiency of your trade promotion spending you have company

Studies indicate that (1) 2/3 of CPG executives are concerned about the cost and efficiency of trade spending, (2) 50% or more of the trade promotions do not meet objectives (3) 18% of CPG manufacturers admit they have no mechanism to measure effectiveness, (4) over 40% of the trade promotion events are not ranked or analyzed and (5) there are big capability gaps in critical areas of TPM products such as promotion planning, reporting and analysis, and account profitability. The net result is that 70% of the CPG manufacturers surveyed indicate the number one area they want to improve is their trade promotion effectiveness. Continue reading