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Creating Win-Win Trade Promotions

Creating Win-Win Trade Promotions. #Consumer360. Can 1 % Make a Difference?. Significant investments are made…. COGS. Trade Promo. Dist. Adv. R& D. Trade Promotion is essential for shelf placement, feature & display presence and pricing tactics . Huge variance in performance and ROI.

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Creating Win-Win Trade Promotions

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  1. Creating Win-Win Trade Promotions #Consumer360

  2. Can 1% Make a Difference? Significant investments are made… COGS Trade Promo Dist Adv R&D Trade Promotion is essential for shelf placement, feature & display presence and pricing tactics

  3. Huge variance in performance and ROI Promotional performance using full roi analysis 1000% 56% 37% 800% 600% Net incremental GSR uplift % 400% 200% 0% 1% 6% -200% -200% -150% -100% -50% 0% 50% 100% 150% 200% Roi % Promotional performance varies widely  Average ROI 11.2%

  4. There is a need for optimization KeyChallenges Unsophisticated & Unsatisfied SignificantSpend • Measuring Trade Efficiency • Retail Execution v Plan • Technology Alignment • 40% of promotions ineffective • Out of stocks ~8% • 70%+ clients unhappy • 2nd largest expense in CPG • 2.5x ad spend Integrated Marketing Effectiveness

  5. CURRENT process – a need for improvement Budget Setting Modeling Customized pricing comparison at local level Baseline Planning Strategic Optimization and Planning TPO Pre Planning Promotional Planning Enhanced Strategy Planning Event Volume Planning Promotional Evaluation Fund Management, Accruals Post Event SAP System Shipment Planning Analytics TPM Invoicing Terms Budget & Targets Event Claims ACTIVATE

  6. Disciplined Process Wins the Day Strategic Planning Integrated Retail sales data leveraged throughout the process Tactical Planning Post Event Analytics Promotion Management Retail Execution

  7. Let’s do the simple math B $200 INDUSTRY YOU $1M $5M $20M $100M $500M $2B Trade spend

  8. Winning requires multiple components Culture Content Cadence Expertise Scale Leadership and domain knowledge Descriptive and predictive Clear framework & knowledge path Evolves with the market and teams Embed and propagate

  9. One client’s story to improve execution Gaps between Strategies and Tactics One big pain point Goal: Improve Promotion ROI Early wins build momentum

  10. Existing tools/solutions left gaps Different needs Multiple stakeholders Execution disconnects with strategy SIMPLE CAN’T ACTIVATE AT RETAIL TECHNOLOGY TOO COMPLICATED

  11. Filling in the Data Gaps Improve content and cadence All Categories All Competitors All Customers …all the time (In a given category) (In all geographies)

  12. provided a simple tool Expand scale across user groups ONE Speed to insight Consistency and transparency Flexibility to multiple users

  13. a powerful combination of tools

  14. Local Sales training Drives Adoption “Right tool to the right stakeholder” expands expertise Increasing collaboration Field empowered to make decisions Simulations relevant to local marketplace Users understand the data

  15. One category, one retailer, one big win “ Letting the data guide the conversation has given us the credibilitywe need with our retail partners $12MILLION Manufacturer ” 8x ROI Retailer

  16. Client is Building upon this momentum Looking for additional ROI opportunities NEW CONTENT AND TOOLS Customer Influence Collaborative Plans

  17. integrated tools drive win/win outcomes Execute Efficiently Retailer P7 Bogo Monitor and adjust in real time Cascade to tactical Planning Define and Evaluate a strategic plan Define and Evaluate a strategic plan Retailer P7 Bogo

  18. It’s important to really understand “incremental” Promotion Source of Volume Market Expansion Incremental Volume Brand Switch New Paradigm Store Switch Time Switch Subsidized Volume Subsidized Volume Non – Promoted Volume Non – Promoted Volume Past Paradigm Purchase Behaviors

  19. Promotional source of volume enables focus on mutually beneficial promotions Promotional Impact Framework Retailer Growth Mutual Growth 17% 32% High Subsidization Manufacturer Growth 27% 25% Retailer Benefit Note: Source: Nielsen Promotional Source of Volume Models; 30 category average 2013 Low Manufacturer Benefit Low High

  20. Wrigley uncovered differences across brands & how they laddered to portfolio & category value • % Promotion Incrementality to Manufacturer/Retailer Brand B+lift

  21. Let’s partner to drive bottom line results 1% is a meaningful start toward greater goals 5% - 10% + improvement on forecast accuracy 5% - 10% +improvement in trade efficiency Reduced operational costs and time delays Rapidtime to value

  22. Q&A

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