One of the biggest investments consumer goods (CPG) companies make is into trade promotion and for a good reason. It’s a highly competitive market and sales are closely tied to effective trade promotions.
But while CPG companies are open to spending significant amount of revenues on trade promotion, they often fall into the trap of being unable to obtain the desired ROI from these efforts.
Trade Promotion Management (TPM) systems help to a certain extent – they enable companies to strategize and monitor activities in a more streamlined manner. However, they do not completely address the challenge of missed returns from high investment into trade promotions.
Industry leaders are quickly moving to adopting trade promotion optimization (TPO) solutions to close this gap. TPO solutions extracts data from the TPM system to perform post-event analytics and generate important insights that can help drastically improve performance.
TPO helps companies obtain deeper insights into the baseline and an understanding of promotions which have yielded an increase in sales and promotions which may have cannibalized sales for another product.
All of this data enables firms to create promotions that are far more effective and also recommends which of these promotions should be run where and when and for which products to achieve the desired business outcomes.