Trade Promotions Management

Trade Promotions Management

While this year’s Top 10 TPM providers are the key leaders of the industry, it is critical to examine the direction of many of these vendors as they look beyond automation to optimization. “Look for better embedded analytics and data visualization to improve overall effectiveness,” says Sheryl Kingstone, The Yankee Group. It appears as though this year’s winners are working hard to improve and expand their products and services to usher in the new era of Trade Promotion Optimization. Gelco has a new planning tool to compliment its seasoned domain expertise, SAP’s business intelligence warehouse interface is becoming more robust and Oracle’s deep rules and claim processing engine gives them strength across a number of industries. It will be interesting to see how Oracle expands both PeopleSoft’s and Siebel’s TPM offerings. Some experts also point to Demantra as a top contender in the analytics and promotion optimization area, especially as it integrates its strong science with what is now a more comprehensive TPM functionality package. Synectics is making its “Account Review” product a seamless integration of key trade promotion functionality and analytics, especially for the small to medium-sized businesses. CAS’ global reach has a sound positioning in the food and beverage arena, with its CPWerx product containing powerful rules-based workflow management and front-end planning expertise. JDA’s TEM product suite and its reengineering of the Vista CPG engine makes it a solution that encompasses both trade and manufacturer sides. “In short, by the end of 2006, we will see the budding of collaboration through the continued advancement of trade promotion optimization,” says Rob Hand, CEO, Hand Promotion Management.

Breakout Winners
Customer Experience
Industry experts point to optimization as the next wave of valuable TPM functionality. “CAS brings to the table a data model based on CPG products as opposed to traditional CRM vendors who offer opportunity-based models,” says Robert Reinckens, CIO-Americas, Coty. “CAS also demonstrated a willingness to adapt their solution to meet our specific needs, something the other vendors weren’t prepared to do.”

Small/midsize business
Keeping costs low while offering robust TPM functionality is a challenge for vendors, especially in the SMB marketplace. Oracle’s uncanny ability to successfully cater to companies both big and small is a validation of the company’s widespread growth and innovation. “The decision to work with
commercial-off-the-shelf Oracle solutions was cost efficient in both the short and long term,” says Rick Dias, VP of marketing, Thermos.

Metrics Will Drive Trade Promo Effectiveness
The biggest discovery for most manufacturers in 2005 was that after putting in the controls required by Sarbanes-Oxley/FASB to properly record and track their TPM investments, the majority of firms discovered they had no idea how effective these funds really were in achieving their goals of increasing sales. Most of the technology spend was for control purposes, and not necessarily for analytical purposes.

“Only a minority of manufacturers were able to access the effectiveness of their TPM dollars,” says Deb Kuhns, managing director for Trade Promotion Management Association. “This not only allowed them to take an even stronger position with their customers in negotiating win-win deals, but also allowed them to redirect dollars from general advertising to trade promotion.”

Kuhns says many of the large technology firms are just beginning to ramp up their TPM offerings. Although they’ve been available, the number of installed customers is relatively low across the board. “Regardless of what product is installed, I believe that the real change that needs to happen for TPM to become effective is a philosophical change — one from volume to value,” says Kuhns. “This is an extremely difficult change to make, but is essential in really taking the world of trade promotion to where it needs to go — relationships that are beneficial for both the manufacturer and the retailer.”

Rob Hand of Hand Promotion Management also sees the need for a philosophical change in the TPM sector, citing Trade Promotion Optimization strategies as the catalyst for this change. “You have to rank promotion measurement and analysis as the big story in my way of thinking,” says Hand. “As we march toward the Shangri La of true collaboration, the steps we must take first is to get the data measured and analyzed.” Hand noticed a marked change in corporate executive attitude toward taking proper action steps to improve the ability to make sound TPM determinations through analysis, citing Dole Packaged Foods as a leader in this space. “Dole has created what we believe to be one of the better TPM workflow and program management systems we’ve seen from internally developed technology,” says Hand. “But more importantly, their broker and customer compliance is superior to what we’ve seen in many other larger CPG companies, especially in the areas of securing performance documentation, collaboration and fund usage.”