The Route to Improve Efficiency

Companies in consumer products industry are spending between 15 to 25 percent of their revenues for trade promotion activities. According to Gartner report in 2017 “Consumer goods manufacturers continue to spend a significant portion of their budgets managing promotions and price reductions as a part of collaborative efforts with retail partners”. In addition to that, Economic Times Retail shows that 15% improvement on Trade Promotion  will change the top line by 10% and operating margins by 3-5% positively.

Many consumer products companies are still using excel to manage their daily operation of complex TPM processes. Lack of integrated Trade Promotion Management solution is one of the reasons that Excel is still in place.

Organizations are looking for best ways to have profitable trade promotions, but they don’t have powerful integrated tools to achieve that. According to AMR Research: “Promotion effectiveness is the measurement of the results of a promotional activity based on uplift, cost, margin, profit, revenue, and account management consideration”.

So, certain information should be available in a preferred TPM solution for the users to be able to foresee the efficient trade promotions.

Typical TPM solution should cover:

  1. Effective budget management
  2. Users should spend more time on analysis of promotion instead of wasting their time in bringing all data together from different sources.
  3. Flexible and user-friendly promotion entry screen with necessary information available.
  4. It should provide collaborative environment during the plan. It should comply with internal audit rules.
  5. Trade Marketing should guide the sales by analyzing the historical sales and promotional activities. Doing this, they have to be empowered by strong reporting capabilities.
  6. Settlement process should be straighforward. Expected invoice amount should be calculated and ready prior to invoice receipt to make sure that nothing flies apart.
  7. Accruals and settlements should flow to right financial accounts to assign the cost to right SKU and customer to measure the profitability right.

Ocrion can help consumer product companies to achieve the above targets by proposing enterprise-level cloud-based Trade Promotion Management solution.

There is a common phrase “what gets measured gets managed”. However, not everything that we can measure matters for us. Thinking of Artificial Intelligence, it reveals the relationship of all the data you put and gives you optimum result with complex algorithms. Ocrion platform evolves to meet your needs. We will talk about usage of AI in trade promotions in a separate blog.

How Does Ocrion Help Out Organizations for Higher ROI?

Organizations in consumer products industry run trade promotions that don’t result in expected outcome due to various reasons.

They try and try again to find out the best way to reach the planned ROI. Ocrion can help out organizations to improve the efficiency in trade promotions.

According to surveys, experts highlight the below bullets while planning a trade promotion, and let us see how Ocrion can help them:

Use premium brands to generate traffic and create value for the customers while improving promotions for weaker brands. Ocrion helps organizations to find out the best mathching SKUs while planning a trade promotion. It gives deep and actionable insights into promotion activities for organizations.

Exclude the categories if it has a higher market share: Organizations have premium brands, and consumers will buy them anyway. Focus on SKU level or exclude those categories where it has higher market share. Ocrion provides full visibility in entire product dimensions of organization and it supports exclusion of lower level categories while defining the promotion is done on higher level.

Monitor every step. Organizations should make a thorough analyses prior to scheduling the activity by checking the existing open activities or settlements waiting for approval. Ocrion provides 360 degree of any account with the help of dashboard and reporting capabilities.

Budget allocation among trade marketing and sales team in a collaborative environment. Use inserts or in-store display while running off-invoice discounts. Organizations usually don’t like breaking down the activities due to difficulty of budget allocation. Regular business case; sales team wants to apply sell-in rebate discount from their yearly agreement whereas trade marketing department is requested to reimburse the in-store displays. Both trade marketing and sales team can work collaboratively at Ocrion to process the trade promotion activity. Sales team informs Trade Marketing about how much it will cost to put an in-store display. Trade marketing department approves his share of cost by checking the planned uplift volume.

Show the history. Organizations should consider the pros and cons of deep discounts by running what if scenarios. Ocrion draws user attention by providing detailed analysis while defining a trade promotion. It shows the past promotions in account levels as well as product and activity type levels.

Upload external data. Organizations need syndicated data as well as actual shipment data to calculate actual ROI. Ocrion integration platform empowers organization to upload POS and direct sales data to calculate the actual performance of trade promotions. Doing this, Ocrion provides real-time analyses of ongoing promotions. In addition to that, expected claim amount gets calculated before invoice receipt.

User experience. Usability is one of the important aspects of a TPM solution to attract TPM end users especially dealing with sales teams. Ocrion uses the state-of-art technology focusing on user-experience to save time in daily operation of the organization employees. It gives opportunity for the users to display the promotions in calendar view to see the overlapping promotions if there is any. Promotion calendar shows the promotions from different angles such as calendar view by tactic, SKU, promotion itself.