The Future of Trade Spend
The growth rate for trade spend and its increasing share of the total marketing and sales, or demand, budget is unsustainable and becoming less productive in the new consumer reality. While trade promotion will continue to play an integral role in driving profitable consumer and customer demand creation, it will be forced to deliver similar or improved results with substantially fewer resources in the future. Consequently, a significant dose of change is required as consumer products (CP) manufacturers have reached a critical juncture and need to evolve their demand creation and resource investment mix models for profitable long-term growth.
Focus on Trade Promotion Optimization
In response, we strongly encourage consumer products manufacturers to manage and optimize trade promotion management (TPM) as priority #1 in their evolution process. CP manufacturers should escalate this change effort as a strategic business objective to drive focus and help enable success related to trade spend. This will require instilling leading TPM processes and a best-fit tool to drive continuous productivity improvements across trade promotion – the largest single demand related spend for most CP companies.
Opportunity for Integrated Sales & Marketing Planning
Identified savings from TPM continuous productivity improvements should be funneled to higher yielding demand creation investments within marketing and sales such as brand renovation, new product/service innovation, and integrated consumer experience marketing. In parallel, CP manufacturers should begin a 3-5 year progressive journey aimed at reshaping sales and marketing into an integrated demand business function with:
- Consumer Centricity: Ensure the consumer is king and build direct, participatory relationships;
- Company Alignment: Architect, enable and align the organization to achieve the consumer centric vision;
- Capital Allocation: Manage and optimize all demand investments as a singular resource;
- Channel Ubiquity: Create compelling integrated consumer experiences across traditional and digital channels.
To read more about Trade Spend’s Unsustainable Trajectory in the New Consumer Reality click through to the PDF below.