Plan, execute, settle: Trade promotion management

Promotional planning and management processes are undoubtedly among the biggest challenges for manufacturers. Organizations devote time and resources to managing and running promotional campaigns for their business partners. Unfortunately, the investment of cash and human resources does not always yield the expected results. According to the Promotion Optimization Institute’s State of the Industry Report (Reset & Re-Plan 2020-21), CPG companies spend between 11% and 27% of their revenues on promotional activities, which is the second largest expense after the cost of goods sold. Additionally, when asked about the level of satisfaction with the promotional activities generated by their companies, nearly 40% of respondents said they are either not satisfied or very dissatisfied. 

What lies behind unsuccessful investments in promotion

On the basis of the data mentioned above, it can be concluded that many promotional activities do not bring the expected return on investment. In most cases, the main reasons are:

• Lack of relevant data – assumed turnover is inadequate for established discount
• Lack of consistency between the shelf price of the promotional product and the promotional guidelines
• Out of stock – no product in the store
• Lack of possibility to adjust promotion conditions (quantity, price) during the course of the promotion
• Knowledge scattered across many data sources (systems, files, spreadsheets) – no central database of good practices or guidelines for promotion management
• Lack of automation and optimization when creating promotional activities

An additional aspect complicating the process of managing promotions is the amount of data necessary to process. This includes sales history besides promotional periods, current sales (taking into account all sales channels), production planning and logistics, and a properly calculated baseline. Furthermore, the overlapping of individual business conditions and contracts for each partner/network must be monitored.

Effective management of promotional processes

The answer to all these challenges is Trade Promotion Management. This is an application for planning and settling promotional activities, as well as managing promo budgets. The system enables simple definitions for short-term and long-term actions for selected customers, groups of customers, or retail chains. It has the ability to integrate with external data sources (such as FOCUS), and the information flow and approval process can be restricted and controlled for the appropriate system role or user type.

Advanced reporting modules help employees to measure and use various promotion planning scenarios, increasing their ROI, which translates into increased sales and profits.

Modules enabling management and control of promotion planning processes include:

• Calendar – presents all promotions and budgets. The simple, intuitive view allows you to see the current situation and analyze any time intervals.
• Promotion planning – with the help of a virtual guide, the application leads you step by step through the process. When relevant parameters have been set, it shows “what if” scenarios while suggesting optimal business solutions.
• Promotional budgets – enables the user to enter and assign appropriate promotional/cost budgets in order to control expenses fully.
• Masterplan – contains a calendar with a plan of short-term and long-term marketing activities, for example a TV campaign or launch of a new product.
• Guidelines – ensure that all business conditions are met. The user creates guidelines for particular retail chains, customers, product groups, or brands. The system informs them if any defined conditions are exceeded. Thanks to the defined rules, the next steps of promotion acceptance can be directed to other users/decision-makers according to the guidelines in the event that the defined parameters are exceeded.
• Workflow – the application automatically accepts an activity or forwards it to the appropriate employee at each stage of decision-making. A note remains in the system about the steps taken by the user at each stage. Workflow makes it possible to share promotion management between different departments in the company (such as sales, production, logistics, demand planning , and analysis).
• Forecasting – conducts multidimensional analysis of historical data in relation to the current sales situation with trend line calculation. The system automatically suggests the customers and products for which promotions should be planned.
• Accounting – allocates expenses and invoices automatically thanks to appropriate integration processes. It also creates an opportunity to carry it out ad hoc by means of manual assignment of an appropriate file.
• Reporting – enables analytical users to create several report forms, quickly and easily, based on daily processed data:
  • Dashboards – configurable dashboards that can be freely modified by any system user
  • Flat reports – defined statements presented as flat, two-dimensional tables
  • Fast-grid pivot reports – based on OLAP cubes, allowing selection of appropriate measures and dimensions to prepare any desired view

Additionally, all system reports can be visualized with the use of charts, saved as templates (to be refreshed later), and sent automatically to defined email accounts.

Flexibility in response to individual needs

During the implementation of Comarch Trade Promotion Management in various industries (cosmetics, beer, beverages and dairy products), we have repeatedly come across the need to launch dedicated functionalities for individual sectors, tailored to the specific nature of their business. Such needs may include strict price monitoring and retail price control, change management (changing conditions of a promotion already underway), taking into account seasonality of sales for specific brands, or segmentation and categorization of customers when planning promotions. There are also requirements to define promotional actions per contractor with an assigned wholesaler who will carry out the sale. 

Full integration with essential tools and apps

Comarch Trade Promotion Management is fully integrated with the Comarch Mobile Sales Force system, thanks to which there is no need to define promotional activities in two different tools. A sales representative who receives promotion data on their mobile device can, as the person working closest to the market, verify individual elements of the promotional activity on the spot (for example, shelf price, newspapers, additional display places, stocking, sampling, etc.). A very important element allowing for tracking the market environment is integration with data from the FOCUS system (Focus Research) and external data such as resale data from trading partners (Comarch Online Distribution). Comarch Trade Promotion Management, produced by Comarch, appears annually in the POI TPx Vendor Panorama reports of the Promotion Optimization Institute, and has been awarded the title of Best-in-Class solution.

Key advantages of Comarch Trade Promotion Management

The benefits of implementing Comarch Trade Promotion Management for individual company departments are:

• Business – rapid decision-making as business conditions change, thanks to constant overview and control of promotional processes. Tracking the statuses of individual actions and staff assigned to them, and full information on who made decisions on the basis of which data, are aspects supporting decision-making within the company and its business environment.
• Sales – increasing the number of generated promotions, which translates into sales growth, and creating sales policy for specific products/brands by means of promotional activities. Such activities are possible thanks to a central point of promotion management taking into account all sales channels.
• Finances – control of KPI parameters and better ROI from planned promotional activities. Quick evaluation of promotional activities with a per-manufacturer, per-brand, and per-partner P&L overview.
• Production/logistics – standardize processes and accelerate information flow between different departments. Planning of production and deliveries, taking into account data defined in Comarch Trade Promotion Management, such as planned volume, quantity areas.
• Marketing – control of expenditure in the area of promotion of individual brands.
• IT – full control of access to information. One tool that gathers knowledge in one place. The authorization policy decides which group of users has access to particular data.

On the basis of market experience and inquiries received from the manufacturers, it can be concluded that this type of system is one of the most desired from a sales support perspective, and will grow in importance in the future.