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.

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