Kaiserslautern, Germany -  Australian Trade Promotion Management solutions specialist, Promax, expanded its operations to Central Europe with the addition of Andreas Enders as President Central Europe. Since then Andreas has succeeded in generating a lot of interest in the European market and Promax Central Europe is expecting a number of projects to materialize during the next couple of months. To ensure high quality implementations Promax Central Europe has now appointed Tim Hall as VP Customer Solutions.

Tim is a recognized and respected industry expert. He started his career at a leading TPM vendor seven years ago and recently held the role of product manager for TPM & TPO solutions. His past experience provides him with broad knowledge of the CPG industry and its requirements in regard to trade promotion solutions in Europe, North America and APAC. Tim holds both an English and a German passport and has spent the majority of his life growing up and working in Germany. Completely fluent in both languages and at home in both cultures his focus will be directed at successfully deploying customer solutions at Promax Central Europe.

Andreas Enders, President of Promax Central Europe, said: “I’m very pleased to announce that Tim Hall will join Promax on the 1st January 2010. This is a major milestone in building a well known and recognized world class TPM & TPO team. I’ve worked with Tim in the past and I know him as a passionate, result-driven individual with deep knowledge of the TPM & TPO space. It will be fun having him on board acknowledging that future customers will benefit from his move.”

Promotions have been a regular part of the Grocery retailing scene for many years now – maybe 30 or more years. When I was first involved in Grocery, nearly fifteen years ago, this question typically was dismissed as obvious. The theory that was put forward at that time was that a promotion was run so that the rate of sale after the promotion would be higher than that before – in other words one was led to believe that the objective was to gain a permanent increase in the rate of sale. Now that scan data is readily available (sales through the cash register) we realise that this is not something that can be guaranteed, indeed the vast majority of products appear to continue with precisely the same sales pattern as existed prior to the promotion. If it is in a growth cycle, that probably continues, if it is in decline, that also continues. Why then do we promote?

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So you have done your promotional planning, does that mean no more problems? Unfortunately not. It is still quite easy to end up with a severe overspend situation. This is because most promotions have no limit on the amount the chain may wish to buy. Why this should be so is one of those things that has become ‘part of the way we do business’, and has no basis in logic. It is just as illogical as extended buy periods, for businesses where there is perpetual motion and a pipeline of product! But it causes very real problems. Even with the most careful of planning, unless you monitor the trade spend during the year, you will almost certainly get a big surprise at the end of the year. Planning alone will not control trade spend. In this section we are not concerned whether the trade spend is worthwhile, only with keeping the total costs within predefined boundaries.

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The availability of retail scan data means that suppliers can now evaluate their promotions in terms of the additional sales that were sold through to the consumer. In this paper we will look at the issues surrounding this, and some of the problems.

Download the full The Mirage of Promotional Lift Case Study PDF