Can Promax PX improve promotional program formulation and management?

22 Jun 09

Here we describe the process that Promax implements. It is a closed-loop process, whereby the supply chain is part of the promotion process with open communication between sales and marketing, supply chain, and finance. When promotions are planned, sales and marketing need to inform the supply chain to ensure that manufacturing produces the anticipated lift amount. Likewise, when the promotion is executed, the supply chain needs to be involved in making sure that the promoted products are at the appropriate locations at the right time. After the promotion, the actual results need to be fed back into sales and marketing for the next round of planning. These internal integrations are crucial to the success of a promotion. Often, the only internal integration that is realized is the one to financials, to allow for proper settlement. While important, closing the loop with other internal disciplines like production and the supply chain will ultimately improve future promotion cycles, as better planning and execution are enabled.

Promax views Trade Promotion Management (TPM) as a strategic platform for companies operating in a global market place. TPM is not a set of tactically siloed decisions disparately resolving price, event and financial issues, instead Promax sees TPM as an integrated environment that allows businesses to model, optimise, forecast, budget, execute, manage and measure product and customer performance within one country or across the globe.

Promax has developed a TPM system (Promax-PX) that achieves this vision today and has taken it beyond the traditional boundaries of trade spend management to incorporate sophisticated optimisation and causal modelling to give more accurate predictions of consumer off take.

Promax has for 20 years led the way in trade spend control and evaluation. We have developed approaches that allow our clients to model entire promotional programs, as well as individual promotions. With the advent of scan data of recent years, we have used this to predict consumer behaviour. From an initial prediction based primarily on price, we have incorporated multiple causals. This will raise the bar on the accuracy that can be achieved with trade spend forecasting, accrual accuracy and production forecasting. More recently we have moved to enable higher level planning, so that account managers can model promotional programs accurately but with less effort.

We are also working in the area of optimisation, where we are able to apply corporate goals to the consumer response data, and ascertain how to deliver these goals while maximising profit, and minimising trade spend. There is no doubt that the major Australian chains such as Woolworths and Coles are amongst the most demanding in the world, and the retail power they bring to bear is the most severe. It is in this environment that we develop our software to assist our clients.