2009 Readers' Choice Survey: Trade Promotion Management
It is generally estimated that the average consumer goods company spends 20 percent of revenue on trade promotions, yet many companies are still unsure of their effectiveness or value. In an April 2008 article, Lora Cecere, vice president, Consumer Products, AMR Research, reported that only 54 percent of trade promotions would be evaluated in 2008. "Why? There is usually a disincentive to report and, as a result, companies do not force discipline in the process," she stated.
Gartner's Research Vice President, Industry Advisory Services - Manufacturing, Dale Hagemeyer, adds that while the business case for deploying Trade Promotion Management (TPM) is strong, obstacles lie in defining new processes and change management. Findings from a CGT research report ("Trade Promotion Optimization") supported this opinion: 56 percent of those surveyed said that change management was the single largest hurdle to deploying a solution.
But in a recession, it is more important than ever to make every dollar on trade promotions count, and consumer goods companies should explore options beyond the traditional definition of TPM, including advanced functionality such as optimization, to understand the effect of trade funds on margins.
According to Hagemeyer, a shift is already in motion as more software-as-a-service offerings come to market and leaders move toward predictive modeling and optimization.
"Optimization and simulation offer a significant competitive advantage for consumer goods companies that can use them in conjunction with their go-to-customer activities," said Hagemeyer, upon the 2008 release of Oracle's Application Integration Architecture solution. "The industry is so rich in data that it will take predictive capabilities to truly understand and influence future outcomes."
The consumer goods industry seems to be in agreement, because despite obstacles, 76 percent of respondents in the aforementioned research acknowledge that deploying a trade promotion optimization solution will allow their organizations to spend trade dollars more effectively by determining the optimum combination for promotions.
BREAKOUT FAVORITES
Customer Experience: CAS
Why TPM is important to Molson: "We wanted a solution that would enable us to go-to-market with a standardized approach across our different markets in Canada to maintain and control our trade spend, act on specific key performance indicators, bring more discipline and improve customer visibility to better address business opportunities."
-- Sylvie Leduc, VP Business Development, Molson Coors
SMB Market: Oracle
"This [Oracle Demantra] gives us the beginning impetus to understand where our peaks and valleys are, where we can optimize promotions and where we can increase revenues. Several hundred people now have a single unified view into what trade promotions are doing, and this leads to better reporting, better visibility and better accountability overall."
-- Mitch Margolis, CIO, NBTY Inc.
| Top 8 |
| 1. Oracle |
| 2. SAP |
| 3. CAS |
| 4. MEI |
| 5. Adesso Solutions |
| 6. JDA Software Group |
| 7. DemandTec |
| 8. Synectics Group |
Gartner's Research Vice President, Industry Advisory Services - Manufacturing, Dale Hagemeyer, adds that while the business case for deploying Trade Promotion Management (TPM) is strong, obstacles lie in defining new processes and change management. Findings from a CGT research report ("Trade Promotion Optimization") supported this opinion: 56 percent of those surveyed said that change management was the single largest hurdle to deploying a solution.
But in a recession, it is more important than ever to make every dollar on trade promotions count, and consumer goods companies should explore options beyond the traditional definition of TPM, including advanced functionality such as optimization, to understand the effect of trade funds on margins.
According to Hagemeyer, a shift is already in motion as more software-as-a-service offerings come to market and leaders move toward predictive modeling and optimization. "Optimization and simulation offer a significant competitive advantage for consumer goods companies that can use them in conjunction with their go-to-customer activities," said Hagemeyer, upon the 2008 release of Oracle's Application Integration Architecture solution. "The industry is so rich in data that it will take predictive capabilities to truly understand and influence future outcomes."
The consumer goods industry seems to be in agreement, because despite obstacles, 76 percent of respondents in the aforementioned research acknowledge that deploying a trade promotion optimization solution will allow their organizations to spend trade dollars more effectively by determining the optimum combination for promotions.
BREAKOUT FAVORITES
Customer Experience: CAS
Why TPM is important to Molson: "We wanted a solution that would enable us to go-to-market with a standardized approach across our different markets in Canada to maintain and control our trade spend, act on specific key performance indicators, bring more discipline and improve customer visibility to better address business opportunities."
-- Sylvie Leduc, VP Business Development, Molson Coors
SMB Market: Oracle
"This [Oracle Demantra] gives us the beginning impetus to understand where our peaks and valleys are, where we can optimize promotions and where we can increase revenues. Several hundred people now have a single unified view into what trade promotions are doing, and this leads to better reporting, better visibility and better accountability overall."
-- Mitch Margolis, CIO, NBTY Inc.