Promax PX Predictive Analytics and Multi-Causal Modeling

Preditive Analytics with Promax PX

Trade promotions Management is most commonly considered is the ability to plan and track promotional events to ensure that the payments that are made to the trade are within the contractual, budgetary and policy constraints of the business.  Trade funds (spend) is the bucket of money allocated by a business to fund discounts and cooperative activity with the trading partners (wholesalers and retailers) in the supply chain from the manufacturer to the consumer.

In assessing the effectiveness of the trade funds it is fundamental to understand two components of the demand signal;

1.       Baseline Sales Rate – this is the forecast sales rate when there is no promotional activity.

2.       Uplift – this is the sales rate over the baseline that occurs when a promotional event is implemented.

Trade Promotion efficiency and Trade Promotion effectiveness can only be assessed if data streams of these two measures are available.

To optimize the utilization of trade funds it is important to have reliable demand signal data available that is sourced from a point that is as close as possible to the consumer.  In most markets around the world this data is derived from Point Of Sale (POS) devices and is commonly referred to as “scan data”.  Unfortunately, this POS data is not available for every customer and product that is sold by a typical consumer products company.  This being the case, how does a CPG business tackle the optimization challenge if a large proportion of the data set is missing?

This paper will shed some light on how Promax PX can conquer this challenge and provide a stream of quality multi-causal demand signal data on which predictive analytics can be used to optimize trade promotions.

Read more about “Incorporating Predictive Analytics with the Demand Signals to and from Trade Promotions” by downloading the complete whitepaper

Don Nicol, CEO of Promax Applications Group is a Customer Management subject matter expert featured as a Roundtable Participant in the latest CGT Technology Solutions Guide – 2011 Customer Management Solutions (CMS).

This important publication offers Consumer Goods companies guidance for your sales and marketing initiatives in areas like nontraditional marketing, trade promotion optimization (TPO) and retailer collaboration.  View a snapshot of industry credentials in the 2011 CMS Chart.

Download the PDF:
CGT Technology Solutions Guide – Customer Management Solutions 2011

Promax PX Technical Architecture & Hardware

A typical consumer packaged goods manufacturer with sales of $1 billion is possibly investing in the vicinity of $200 million per annum in trade funds.  The better application of those trade funds can lead to an increase in market share at a higher rate of profitability which can impact the bottom line by 2% or 3% on a conservative estimate.  For a company with an EBIT of 10% that is an additional $2 or $3 million every year return from a dedicated and integrated Trade Promotion Management (TPM) and Trade Promotion Optimization (TPO) project – potentially a 20-30% increase in profit.

As with any new system, you need to do your homework and evaluate the associated costs and impacts on the business.  A step-by-step plan is vital to ensure you make the right selection and achieve a rapid return on investment.  You’ll also need to prepare a valid and robust business case to justify your recommendations for implementing this new tool.  So, what should you consider?

• Determine your goals – what are you trying to achieve? eg improved productivity, greater visibility of trade promotion effectiveness, more accurate accruals and payment systems, improved Strategy Planning and Budget development, more time for the sales force to concentrate on the job of signing the deals.
• What impact will a new system have on the business – implementation process, training, user acceptance?
• Cost – do you have a budget and what cost savings can you expect?
• What are the other IT considerations eg interfacing with your ERP, additional hardware requirements, on-premise or cloud computing?
• Software vendor experience, support and success rates – how quickly can they implement?

Along with all these considerations, you’re probably also facing the debate with your IT specialists as to whether a specialised out-of-the-box TPM/TPO solution is going to be a better option than utilizing a single solution provider who is also providing your ERP services.

This raises the old adage as to whether one solution provider can be “all things to everyone”.  At Promax, we have more than 20 years experience focusing purely on TPM and TPO.  Armed with the knowledge of the complex requirements of global CPG companies in various fields such as Food & Beverage, Pharmaceutical OTC, Personal Care and Household products, we appreciate that a dedicated solution designed to achieve best practice in a specific business process is the only way to go.  Obviously ensuring that this solution has been designed to rapidly and efficiently interface with other systems currently utilized or planned for implementation within the business.

The choice of development and operating environment for Promax PX was taken after an extensive analysis of the needs of the Promax user and the nature of the trade promotions management and optimization environment.

Some of the key considerations were………

Read more about “Promax PX Technical Architecture & Hardware” by downloading the complete whitepaper

Interfacing Promax PX with ERP system

Fundamental to the implementation of Promax PX is establishing communication of essential data between its database and that of the other systems in the business environment.  The efficient transfer of “back office” data makes the Promax PX a seamless part of the whole ERP system.  Developed within the Microsoft development environment Promax PX relies upon the technology of Microsoft Windows, Microsoft Office programs and Microsoft SQL Server 2005.  Master file data on products, customers, general ledger, trading terms and pricing can be exchanged between Promax PX and various ERPs using a range of industry standard document formats as well as simple text file transfers. Promax PX has the ability to import and export data using but not limited to stored procedures, XML, FTP & Flat file transfer.

Read more about “Interfacing Promax PX with ERP systems” by downloading the complete whitepaper