Trade Promotion Intelligence - Right Steps Towards Optimization

Trade promotions are seen as the key vehicle for consumer goods manufacturers to drive growth. In today’s world, factors such as growing pressure from retailers and competitors, changing consumer needs, dwindling customer loyalty in a challenging economy and growth of private labels & technological advancements have resulted in increased trade spend. It is already reaching as high as 20-25% of revenue for many Consumer-Packaged Goods (CPG) companies. With such huge amounts being spent, it is important to evaluate if the trade spend is able to meet its objective in maximizing the ROI.

With Mindtree’s TradeSmart and PromoPro, CPG companies can integrate all the right demand signals into a single repository and evaluate what did or did not work. This will enable them to improvise their promotion strategy and make the most of their investment.

Traditionally, companies have been relying on intuition and spreadsheets-based analysis to plan trade promotions and evaluate the performance. Nowadays, there are a number of tools available in the market that use advanced analytical capabilities in evaluating the effectiveness of each promotion. Many of the CPG companies are using these tools available commonly in the market and have mostly been unsuccessful in meeting their respective objective.

There are multiple reasons as to why companies have not been able to achieve desired benefits even after implementing the best-in-class trade promotion optimization techniques. Many CPG companies don’t take all of the factors required to accurately measure a trade promotion program’s performance into consideration. Companies that fail to understand the impact that trade promotion programs have on their revenues, more importantly on ROI, may be missing significant opportunities to maximize revenues. Let us take a look at the reasons and how we can resolve them, below.

• Firstly, it is crucial to collect the complete and accurate data that forms the basis for analyzing trade spend. Data comes from multiple sources through the trade ecosystem such as shipment data from CPG, sales data from retail partners, master, loyalty & syndicated data from various sources, etc. It is essential to get all this data and combine it into a single data repository via an automated process and place it into a strong analytical data model. This will help us get analyzed and accurate insights that can be delivered to make the right decision.

• Secondly, it is important to make sure that the alignment of trade promotion and shopper marketing calendar is right so that there is no missing alignment between trade promotion and retailer marketing events. This will result in proper analysis of trade-spend initiatives and calculating your desired ROI.

• Lastly, it is equally significant to have a simple and easy to use interface that is customized for trade planning and execution team to provide the right experience that enables them to get the maximum out of the solution’s analytical capabilities.

A CPG company that wants to truly embark upon trade promotion optimization journey needs to build the foundation by choosing a comprehensive promotion analysis tool, which can integrate data from various sources and then extract accurate and actionable insights to make it available for analyzing post promotion effectiveness.

Mindtree’s TradeSmart and PromoPro

TradeSmart integrates data of shipments, sales, trade promotion plans and other sources to calculate trade spend ROI for both CPG companies as well as retailers. TradeSmart automates the integration of these data sources and comes with in-built adapters that acquire, validate and harmonize the data without any manual interventions. Having these adapters also makes it scalable and can increase the coverage resulting in better visibility across market. Increased retailer coverage, streamlined efficiencies and accurate Promotional ROI analysis is attained with TradeSmart.

PromoPro provides the right user experience that is customized for manufacture’s trade planning teams. It comes with user-friendly interface that allows users to align CPG trade promotions events with retailer marketing initiatives. Aligning of events to consumption provides accurate insights and enables users to make profitable decision.

Do you agree that a detailed and effective optimization process will help CPG companies in bettering their overall output?