According to a recent Nielsen report, 53 per cent of suppliers surveyed conveyed their biggest concern is pressure on trading terms, an inability to pass on price increases and the increasing cost of serving major retailers. Forty-two per cent of suppliers say volume has grown but only 34 per cent saw profit growth and 22 per cent had profits fall. With consumers switching supermarkets for as little as a 5 per cent price change, it’s no wonder there is more and more pressure on suppliers to invest heavily in trade promotions to gain or at least retain market share.
At many CPG companies, promotion planning, volume planning and annual business planning are executed via separate mechanisms with varying levels of sophistication. Companies with an upgraded TPM strategy saw 80% better gross margin and 121% better revenue uplift from their promotions as recently documented by Aberdeen Research.
When achieving sales and profit targets is your number one priority, data accuracy is paramount! Lack of integrated processes can create a disconnect between the sales and supply chain teams, leading to missed opportunities, inefficiently executed and underperforming trade promotions and potentially wasted dollars. Learn how some of the world’s leading brands are hitting their sales targets with the benefits of a fully integrated Trade Promotion Management and Optimization solution.
As any Trade Marketer or Key Account Manager knows – when the majority of your business is funnelled through a few major retailers it can make for a very high pressure environment. The dominance of these major accounts can often put intense pressure on the supplier with the constant threat of products (or entire brands) being delisted if suppliers don’t meet the increasing demands for trade funds. The result can mean diminishing supplier margins which are unsustainable.
We’re all familiar with Pareto’s 80/20 rule – you know that broadly 80% of your sales comes from 20% of your client base and 20% of your product range represents the majority of your sales. With sometimes as few as just three retailers representing a significant share of your business, managing this grocery channel effectively and efficiently is critical.
In modern trade markets, the amount of Trade Funds spent in major accounts such as Wal-Mart and Kroger (USA), Carrefour (France), and Woolworths, Coles and Metcash (Australia) often makes up the lion’s share of your total trade spend budget. In the more traditional and emerging markets such as Asia and EMEA where they have a large quantity of “Mom & Pop” stores, the route to market and fragmented promotion costs through various wholesalers is the more dominant factor when considering trade funds. As with any significant investment, you want to make sure that you are spending this money wisely to maximise ROI and to protect and grow the relationship with these highly influential and valuable customers. Given the nature and complexities in the global retail market place its imperative that the supplier has the ability to track, predict and control their trade spend.
OVERVIEW OF NEW FUNCTIONALITY IMPROVING THE MANAGEMENT OF YOUR TRADE FUNDS
The Promax PX Trade Promotion Management (TPM) and Trade Promotion Optimization (TPO) solution is 100% focused on Consumer Goods and the OTC Pharmaceutical and Consumer Health product manufacturers, and specifically targets the second largest cost component of most manufacturers’ business: trade spend.
Promax PX V9 continues to provide complete promotion execution, tracking and management capabilities that seamlessly automate each step of the TPM process. Coupled with this is Promax’s unique powerful optimization and analysis capabilities that enable customers to evaluate the effectiveness and efficiency of a promotional programme with real-time predictive analysis to guide optimal execution – before the trade funds are spent. With this level of insight, Wipro Promax Analytics Solutions’ (WPAS) customers can improve both the profitability and productivity of their trade spend.
The Promax PX Version 9 Overview document examines the new functionality available in Promax PX Version 9 and how these enhancements will benefit your business.
Multiple studies have been conducted over the years on the world’s best selling spreadsheet software and the results show that almost 90% of spreadsheets contain errors! A professor of IT Management at the University of Hawaii found that “in large spreadsheets with thousands of formulas, there will be dozens of undetected errors”. A Harvard economics study and the Roosevelt Institute review on the infamous economist paper “Growth in a Time of Debt” highlighted that there was a coding error in the spreadsheet as someone accidently didn’t update a row formula which excluded five countries resulting in completely inaccurate data.
Whilst we all agree that Excel is a powerful tool and reasonably robust, the real challenge is that anyone can create a spreadsheet and therefore it is proned to a multitude of sins. Firstly, there is no audit trail in what numbers or formulas have been changed, when they were changed and by whom. There’s also no easy way to test that the spreadsheet is working accurately. In a nutshell, spreadsheets aren’t always created by people who understand programming well and often there are multiple contributors to the development of a spreadsheet so not everyone follows the same methodology and the design and flow of the spreadsheet can become fragmented.
When it comes to spending millions of dollars on your Trade Promotions, the last thing you want is inaccurate data. It’s imperative that the numbers are right and that there is visibility to all stakeholders in the business of the effectiveness and efficiency of your trade promotions. The Supply Chain team want an accurate forecast of proposed uplift to ensure there are no out of stocks, the Finance team need visibility of the promotional programme to manage accruals and claims and the Sales team need to have all the information at their fingertips in order to secure the deals.
The Promax PX Trade Promotion Management and Trade Promotion Optimization (TPM/TPO) solution solves all of the above challenges. One closed-loop solution to effectively and efficiently manage your trade funds and ensure you are maximising your company’s return on investment. Download one of our White Papers on related topics to learn more.