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Trade Promotion Management for CPG companies
Raúl Alejandre García
Industry Expert Consumer Products
General Market Requirement -
Industry trends are driving change in Sales
 New shopper behavior – frugal,
resourceful, and...
Addressed Business Needs – Industry Data Confirm
Account & Trade Promotion Management Challenges
Source: Consumer Goods Te...
Are you maximizing return on promotion investments
and optimizing customer profitability?
Account and Trade Promotion Management is an essential
part of sales
Packaging
Suppliers
Distribution
Center
Ingredient
Su...
“Consumer Insights and the Ability to Respond Fast”
Consumer Products Strategic Framework
Executing the strategy for CPG c...
These are the challenges we hear from customers
• Ineffective Planning –
Promotions out of synch
with supply leading to ou...
• Integrating demand planning to
improve forecast accuracy and
product availability
• Promotion planning coordinates
sales...
Inventory turns
Time to market
Incremental trade spend
ratio
On-time and in-full delivery
Cost of goods sold
Promotion eff...
Coordinated, integrated systems and processes enable
the Consumer Driven Enterprise
Establish a supply network that is
res...
Marketing
Sales
Finance
Supply
Chain
Account & Trade Promotion Management connects processes across
departments to maximiz...
Marketing
Sales
Finance
Supply
Chain
Account & Trade Promotion Management connects processes across
departments to maximiz...
Account and trade promotion management performance
KPI Industry Benchmark Improvement Potential
Percent of total sales
vol...
One Single Number !!!
Collaboration
Financial Goals
Trade
Promotion
Management
Marketing
Initiatives
Supply Chain
Demand P...
Sales Performance
 Develop optimal plan balancing/optimizing across
volume, revenue, and profit objectives
 Upscale sale...
Gracias!
Raúl Alejandre García
Industry Expert Consumer Products
raleja@hotmail.com
http://www.linkedin.com/in/mxraleja
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Trade Promotion Management_Industry presentation

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Thought Leadership Trade Promotion Process Presentation delivered by R. Alejandre.

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Trade Promotion Management_Industry presentation

  1. 1. Trade Promotion Management for CPG companies Raúl Alejandre García Industry Expert Consumer Products
  2. 2. General Market Requirement - Industry trends are driving change in Sales  New shopper behavior – frugal, resourceful, and value conscious  Standards to manage globally, agility to execute locally  Price / value supported by consumer take-away Globalization  Shopper experience: Value, service, offer & atmosphere  Retailers ‘simplifying’ brand offerings; increasing private label  Transform retailer requirements into competitive advantage Dynamic consumers Demanding Retailers  Grow global brand equity; support local product variations  Quality products delivered with convenience & value  Demonstrate social conscience, safety & sustainability Sustainability Challenging Global Economy Diverse Market Requirements New Competitive Imperatives
  3. 3. Addressed Business Needs – Industry Data Confirm Account & Trade Promotion Management Challenges Source: Consumer Goods Technology, June 2010 CP Companies Must: Identify promotions most likely to achieve target revenue, volume and profit objectives CP Companies Must: Model objectives, constraints and historical transactions to enable fact-based projections of revenue, volume and profit
  4. 4. Are you maximizing return on promotion investments and optimizing customer profitability?
  5. 5. Account and Trade Promotion Management is an essential part of sales Packaging Suppliers Distribution Center Ingredient Suppliers Retail Customers Consumers Sales Marketing R&D Supply Chain IT HRFinance Distributer
  6. 6. “Consumer Insights and the Ability to Respond Fast” Consumer Products Strategic Framework Executing the strategy for CPG companies Sustainability Marketing & Consumer Insights Consumer-Driven Best People and Talent Responsive Supply Networks Customer & Channel Excellence Product & Service Leadership Financial Excellence Strategic IT 1) Build the base, standardize, harm onize & integrate 2) Enable core & collaborative business processes 4) Grow consumer intimacy 3) Maximize ability to respond
  7. 7. These are the challenges we hear from customers • Ineffective Planning – Promotions out of synch with supply leading to out of stocks • Poor coordination - sales promotions not aligned with consumer marketing • Flawed execution - pricing errors, invalid deductions, promotion cost inaccuracy, overspends • Absent analysis – inability to measure promotion effectiveness Packaging Suppliers Distribution Center Ingredient Suppliers Retail Customers Consumers Sales Marketing R&D Supply Chain IT HRFinance Distributer
  8. 8. • Integrating demand planning to improve forecast accuracy and product availability • Promotion planning coordinates sales processes, trade promotions, marketing campaigns and sales execution • Company-wide information enables Account Executives to act as General Managers • Comprehensive analytics provide key measurements and analytics The Goal: Integrate, Coordinate and enablement with the right Process and Solution. Packaging Suppliers Distribution Center Ingredient Suppliers Retail Customers Consumers Sales Marketing R&D Supply Chain IT HRFinance Distributer
  9. 9. Inventory turns Time to market Incremental trade spend ratio On-time and in-full delivery Cost of goods sold Promotion effectiveness Percentage of revenue from innovation Net margin What does RUN BETTER mean for progressive CPG companies about this process Sub-set KPIs – not complete
  10. 10. Coordinated, integrated systems and processes enable the Consumer Driven Enterprise Establish a supply network that is responsive to dynamic demand Leveraging business intelligence across the network Faster time to market with successful products that consumers want Tailored programs and campaigns for Consumers and Shoppers Deliver differentiated offerings and optimize trade spending
  11. 11. Marketing Sales Finance Supply Chain Account & Trade Promotion Management connects processes across departments to maximize program spend effectiveness at both the brand and customer levels Demand & Supply Planning Demand & Supply Planning Account Trade Budget Planning Trade Budget Planning & Allocation Account Funds Management Pricing & Promotion Guidelines Marketing Campaign Planning Global Brand Plan Trade Funds Management Promotion Execution Account & Promotion Planning Strategic Objective Planning Contracts & Promotion Templates Promotion Optimization Promotion Strategy Planning Account Management Promotion Pre- Assessment Volume & Profitability Modeling Promotion Optimization
  12. 12. Marketing Sales Finance Supply Chain Account & Trade Promotion Management connects processes across departments to maximize program spend effectiveness at both the brand and customer levels Trade Promotion Effectiveness Settlements & Claims Customer Profitability Analysis Claims & Deduction Management PromotionAnalytics FundsAnalytics Totalcustomerview Post-PromotionSalesandVolume Decomposition DecomposeofActualRegularand PromotedSalesandVolume TotalCustomerandCategoryImpact Analysis
  13. 13. Account and trade promotion management performance KPI Industry Benchmark Improvement Potential Percent of total sales volume sold on promotion Deductions as percentage of sales Percent promotion effectiveness (meets promotion goals- volume, profit), the finance function 15% 75% 25% 25% 60% 40% 0.5% 5.0% 2.7% 0% 60% 20% Source: SAP Internal Value Engineering
  14. 14. One Single Number !!! Collaboration Financial Goals Trade Promotion Management Marketing Initiatives Supply Chain Demand Planning BI Reports
  15. 15. Sales Performance  Develop optimal plan balancing/optimizing across volume, revenue, and profit objectives  Upscale sales force by utilizing easy-to-use predictive capabilities  Improve promotion forecast and plan accuracy Effective Trade Spending  Optimize promotion performance  Fully leverage available budget  Meet manufacturer and retailer objectives Collaboration  Transition fact-based promotion planning with retailers from post-event to pre-event  Demonstrate joint value/profitability with channel partner Business Value
  16. 16. Gracias! Raúl Alejandre García Industry Expert Consumer Products raleja@hotmail.com http://www.linkedin.com/in/mxraleja

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