Effective Trade Promotion Management in the “Post- Lehman” Economy
by Vijey Rao
In the recent years, Consumer Packaged Goods (CPG) companies have increasingly depended on trade promotions to drive brand recognition, brand interest and translate this awareness into greater sales at point of sale.
The recent downturn of the global economy has made the retail consumer have a close look at the rules of engagement between herself and CPG companies; and she wants “CHANGE” -
1. In her shopping location – increased use of big box retailers / internet
2. In her shopping behavior – increased usage of vouchers / discount bargains
3. In her buying cycle – extended buying cycle / broader research area
4. In her choice set – increased value for money/choice of must have features
5. In her selection criteria – form over function / increased preference for durability
How are CPG companies using Trade Promotion Management to meet these changing realities?
CPG companies have seen the shifting sands and are transforming key components of their TPM practices.
- CPG companies are enhancing their technology capability to establish deep, sustainable partnerships from the grass roots level upwards (kiosk, store, territory …) to create localized promotion activities that are low cost, repeatable, and modifiable to suit local needs. This allows CPG companies to mass customize TPM activities at a very granular level (by store, shopper segments, time of day …etc).
- CPG companies are recognizing the need to focus on TPM analytics; and move beyond historic reporting towards predictive trade promotions; a number of CPG companies are leveraging their vast accumulation of data collected across different touch points to derive insights into consumer patterns and draw out newer TPM events. These are helping CPG companies tailor trade events relevant to consumer needs thereby increasing effectiveness and efficiency.
- Finally, with increasing presence of private label products across retailers, CPG companies are racing to better meet consumer needs, build customer relationships and build shopper loyalty.
About the Author
Vijey Rao is a Principal Consultant with the Enterprise Solutions unit at Infosys Technologies. He has more than 11 years of technology and process consulting experience with leading pharma companies, banks, and government departments across Australia and North America. Vijey currently drives the Oracle Pre Sales activities within the Enterprise Solutions unit. He will blog on emerging CRM trends and industry solutions that use CRM for competitive advantage among other topics.
