Trade Promotions Are Hard To Execute
We all know that sometimes brands run promotions that don’t seem to make sense. I expect that you have seen “buy one, get one free” offers in stores with bare shelves. Colleagues say that movie-themed merchandise often hits the stores just when the movie season is over. We have marveled at offers that are too complex to execute. My personal favorite was store signage offering four for the price of seven!
CPG Brands Invest Heavily In Trade Promotions
Global consumer packaged goods (CPG) brands invest more than 20% of gross revenues in trade promotions. They need powerful applications to plan and execute the best portfolio of promotional activities for each new product and each line extension, in each location or channel.
CPG companies deploy trade promotion management (TPM) to:
• Defend market share. CPG brands such as Nestlé and Unilever generate most of their revenue in modern trade markets. They sell through brick-and-mortar channels like Carrefour or Target. They use trade promotion investments to guarantee share of shelf with each retailer.
• Attract the next billion consumers. Trade promotion and trade marketing help CPG brands to manage territories, distributors, and outlets, serving consumers in traditional trade markets such as China, India, and Indonesia.
• Improve success rates for new product introduction. Trade promotion management synchronizes inventory availability with promotions. It adds statistical rigor to account teams’ estimates about expected sales uplift.
Forrester Has Mapped The Solution Landscape
Application development and delivery (AD&D) professionals in CPG companies should read our recently published report “Now Tech: Trade Promotion Management, Q3 2019” to understand the solution landscape.
You Need Data As Well As Application Software
AD&D professionals need data to measure the uplift from each combination of trade and digital promotions. It’s very important to those that sell directly to consumers, perhaps via Amazon as well as through traditional brick-and-mortar channels. At long last, they can see the combined impact of store tactics, such as end caps, with digital spend (on Google Ads, for example). This report describes some characteristics of the modern data sources that you can use to measure your campaign effectiveness.
I’m keen to hear your examples of infeasible promotions. If you set up an inquiry, I would be happy to give you more details about syndicated data sources and about TPM solutions.