Trade Promotions: Maturity levels
CPG companies have been dabbling with Trade Promotions Management for a very long time and have come a long way in understanding the nuances of TPM. Yet, there seems to be a gap in their understanding and the maturity of the practice in global organizations. With more and more CPG companies looking at globalization to balance it out against the effects of economic slowdown, it becomes more prudent to take a closer look at the maturity of trade promotions management practices at their own organizations. The CPG companies have much more need today than ever to closely monitor their trade promotion management systems, processes and returns of the trade promotion programs. In one of the quantitative researches, Lora Cecere, AMR Research (Requires AMR subscription access) concluded that almost 14% of a company’s revenues are spent in trade promotions, and yet only 52% of them are even evaluated post promotion.
At Infosys, we conducted a survey of global CPG companies along with Trade Promotion Management Associates (TPMA) with 3 objectives –
1. Global Trade Promotion Management (TPM) Practices: What practices do leading international firms follow
across geographies with respect to systems and processes?
2. Systems and Tools in TPM: Do top global marketers implement the same systems in all the countries where they
do business? To what extent do they customize?
3. Barriers to TPM Implementation: What are the biggest barriers they face to global implementation?
The results were revealing. It was amusing to know that still 60% use excel based sheets for managing promotions, many are in early stages of evolution of systems and tools in TPM and the non-standardization of integration of data owned by multiple players and different systems poses the major challenge in implementing TPM effectively. There were many revealing insights from the survey which I’ll cover in my subsequent posts.
The results were also presented in a webinar by me and Bob Houk, Executive Director, TPMA which is available here for download.
What is the maturity of TPM in your organization? Are you still stuck with excel based spreadsheets? Do you feel the need for integration of multiple systems, platforms and data models? Let us know.
