A Trillion Dollar Challenge in the CG Industry
Trade promotion spending is approaching an average of 20% of sales revenues throughout the world – from 16% in the North America to almost 30% Asia – and remains the second biggest expense in the P&L of a consumer goods manufacturer.
However, nearly 45% of FMCG companies are not satisfied with their ability to manage trade promotions as confirmed by the POI’s 2016 TPx Survey.
Therefore, trade promotion management remains a familiar and persistent challenge to consumer goods players that have not yet found effective remedy to it through the use of partial and disconnected solutions.
*Source: POI research “The POI 2016 Tpx and Retail Execution Survey”
Kantar Retail Trade Optimisation can leverage on more than 25 years of experience to help CG manufacturers optimize their trade promotion spending and knows the pitfalls along the journey. Learn more about our customer success stories>
Trade Spend Soars but Measurement Lags
Every year CG manufacturers run thousands of promotional events in each country where they operate. However, according to different industry studies, almost 2/3 of the initiatives do not deliver a positive ROI.
While these numbers express the size of the pain, they do not reveal the reasons why it is difficult to act upon it. Most organizations are still struggling to understand ROI at the individual event level.
Understanding what drives effective promotions is an imperative to improve future performance. The math is clear, simply redirecting money from negative to positive performing promotions can greatly improve overall trade spend ROI and positively impact bottom line.
Kantar Retail is featured with excellent references by the Promotion Optimization Institute in the latest TPx Vendor Panorama as veteran in the TPM/TPO space and XTEL suite of solutions is recognised for its unrivalled set of capabilities in the market place, excellent vision and strong client references. Learn more>
A Phased Approach Can Take You to the Top
The central role of applications for managing trade promotion related activities is confirmed in the “Top 10 Technologies for Consumer Goods Sales and Marketing, 2015” study publicised by Gartner, that includes TPM and TPO respectively in the fifth and ninth position in the priority ranking. Furthermore, Gartner also estimates that at least 80% of TPM purchases will include some consideration for TPO.
In order to achieve sustainable results, it is necessary to adopt a phased approach to the development of all necessary capabilities – from foundational, to advanced, to transformational – in order to ensure superior sales performance and continuous improvement.
XTEL end-to-end TPM/TPO solution provides you with all necessary capabilities to support your organization throughout the journey: sales forecasting, trade funding and trade terms management, promotion planning, execution, settlement, analysis and optimization. Learn more about XTEL suite of solutions>
Closed Loop Process to Link Planning to Execution
According to the latest POI 2016 TPx Survey, around 20% of CG manufacturers are satisfied with their ability both to manage promotions and to execute at the store level. Furthermore, most of them still use disconnected TPM and retail execution systems, which leads to a partial vision of the truth and sub-optimal decision making processes.
How much promotional sales are lost due to missed or wrong execution? How many promotions do not deliver a positive ROI due to OOS issues? How much was spent on promotion that did not actually happened?
A closed loop approach is paramount to drive the right activities at the retail store, unveil drivers of promotional outcomes, timely act to course correct execution problems, and support more effective future promotional programs.
Kantar Retail Trade Optimisation’s integrated suite of solutions helps your organization to effectively manage a closed-loop process and understand the drivers of promotional performance and act upon them.
A Holistic and Structured Approach
A successful TPM program is rooted in people, processes, and technologies.
Change management is one of the main issues that interfere with the success of most projects and, therefore, equipping people with the right capabilities to perform the most effective processes deserves the right attention when deploying a new TPM/TPO solution.
The industry expertise, consulting practices and state-of-art solutions of Kantar Retail deliver real competitive advantage to our customers by helping them to grow their business while transforming their ways of working.