Trade Promotion Management (TPM) is a

software application Software is a set of computer programs and associated documentation and data. This is in contrast to hardware, from which the system is built and which actually performs the work. At the lowest programming level, executable code consists ...

that assist companies in managing their trade promotion activity.

Gartner

Gartner Gartner, Inc is a technological research and consulting firm based in Stamford, Connecticut that conducts research on technology and shares this research both through private consulting as well as executive programs and conferences. Its client ...

Company believes that technologies related to managing trade promotions havebecome more relevant, as the average revenue expended by manufacturers for promotions now exceeds 20%. More and more companies are leaving

spreadsheet A spreadsheet is a computer application for computation, organization, analysis and storage of data in tabular form. Spreadsheets were developed as computerized analogs of paper accounting worksheets. The program operates on data entered in c ...

s for automated technologies, while others are adding promotion optimization capabilities. Gartner published the ''Market Guide for Trade Promotion Management and Optimization for the Consumer Goods Industry'' in February 2017.

Key functions

Sales Forecasting Sales operations is a set of business activities and processes that help a sales organization run effectively, efficiently and in support of business strategies and objectives. Sales operations may also be referred to as sales, sales support, or b ...

* Promotion planning and budgeting *

Predictive modeling Predictive modelling uses statistics to predict outcomes. Most often the event one wants to predict is in the future, but predictive modelling can be applied to any type of unknown event, regardless of when it occurred. For example, predictive mod ...

/optimization * Promotion execution and monitoring *

Settlement Settlement may refer to: *Human settlement, a community where people live *Settlement (structural), the distortion or disruption of parts of a building * Closing (real estate), the final step in executing a real estate transaction *Settlement (fin ...

* Post event analysis

Business problems addressed

Commonly, companies use their accounting systems or spreadsheets to manage promotions. As the complexity of trade increases software solutions have been developed for

consumer goods A final good or consumer good is a final product ready for sale that is used by the consumer to satisfy current wants or needs, unlike a intermediate good, which is used to produce other goods. A microwave oven or a bicycle is a final good, b ...

, food manufacturing, food service and others. Trade promotion decisions are often rushed and based on sub-par data. While sales and marketing managers are surrounded by promotion information, questions on retail commitment and product forecast accuracy can hinder the process. Multiple data sources and conflicting needs from various departments further complicate the issue.

Analytics

Historical trade promotion data should be analyzed in order to continually improve trade promotions. If a company does not utilize processes and systems that measure trade promotion performance, future trade promotion executions could be less effective than if they’d been planned using past analytical information.

Integration

Lack of integration both internally and with external partners can hinder trade promotion success. Key elements of organizational integration include * standardized

metrics Metric or metrical may refer to: * Metric system, an internationally adopted decimal system of measurement * An adjective indicating relation to measurement in general, or a noun describing a specific type of measurement Mathematics In mathema ...

, * regular information sharing, * cross-functional department collaboration, and * collaborative processes. Integration with retail partners is important to executing promotions successfully, as well as maintain strong relationships with retailers over time.

Key performance indicators (KPI)

KPIs tell manufacturers and retailers how trade promotions performed relative to their pre-determined objectives. A lack of understanding on what trade promotion data to measure and how to measure performance can hinder the overall process. Manufacturers and retailers will not know what made a promotion effective or ineffective unless they have predetermined data points to measure and analyze.

References

{{Reflist Promotion and marketing communications