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The Real Definition of Trade Promotion Optimization

I was recently reflecting upon an industry conference I attended back in 2002, where I moderated a panel discussion on Trade Promotion Management effectiveness.  The panel consisted of three Consumer Products executives, across Sales, IT and Finance. The conversation centered around how the percentage of their revenues allocated towards Trade Promotion Management (TPM) was escalating, and they were struggling to measure significant returns on these investments. The panelists discussed:

  • A need for greater visibility into what is being spent and with whom.
  • The challenge of getting the sales organization to adapt to a new way of working.
  • Migrating away from Excel and towards best-in-class packaged solutions.
Trade Promotion Optimization

Clarkston Consulting provides insights on the real definition of TPO in the paper, Energizing Trade Promotion Optimization.

Improvements Have Been Made Over the Past Decade

Looking back, many improvements have been made over the past decade, with most companies having adopted TPM systems to manage their spend. Yet, even with these systems in place, very few companies feel as if their trade promotion objectives are being met. With trade projected to represent perhaps as high as 30% of revenues by 2020, companies need greater analytical tools and collaborative processes in place to ensure ROI on their spend.

In the recently published paper Energizing Trade Promotion Optimization, we share perspective on these topics and what should be “next” for CP companies along their TPM journey.  We also provides clarity to the often misconstrued definition of Trade Promotion Optimization and shares insight into how it fits within the overall Marketing Mix. Enjoy and we welcome your feedback.

Tags: Trade Promotion