JTPP: Changing the Game in Trade Promotions Planning and Analysis
By Todd Bortel,
Senior Consultant at Cannondale Associates
a special arrangement, presented here for discussion is a summary of
a current article from The
Journal of Trading Partner Practices (JTPP),
the official online publication of the Vendor Compliance Federation
(VCF), Trade Promotion Management Associates (TPMA), and the Federation
of Credit and Financial Professionals (FCFP).
observers would agree that if the practice of trade promotion today isn’t “broken” it
is at least seriously flawed. Far too much time is spent negotiating
deals and running the treadmill required to put together the weekly ad.
Far too little time is spent evaluating promotions that have been run
and using the information to put together more effective plans for the
future. The result is inefficiency.
indicates that, with few exceptions, the three most applicable descriptions
for current practices are “simple,” inconsistent,” and “biased.” These
findings were shared during the July, 2009 Trade Promotion Management
Associates conference in San Francisco. During this same session, DemandTec
introduced a recommended action plan that consumer products manufacturers
should consider to improve their own success.
this joint presentation are included in the paragraphs that follow.
and manufacturers have roles to play in overcoming organizational barriers.
however, the first step is to eliminate the significant inefficiency
caused by inconsistency within the organization. By establishing internally
consistent approaches to planning and analysis, retailers can simultaneously
raise both the quality of work being done and the productivity of the
managers doing that work. Once internal consistency is established, retailers
can then move on to the larger task of establishing consistency with
must recognize that whatever their concerns about the lack of objectivity
from their vendors, collaboration remains a huge opportunity, and is
a risk worth taking. For collaboration to work, there must be equal participation,
and equal control by both parties, and that work must be based on explicitly
stated mutual goals.
joint TPMA presentation, DemandTec offered up a tangible example of how
manufacturers are seizing this opportunity. To drive even greater value
with retail category buyers, leading manufacturers are now developing
trade plans that highlight total category performance metrics versus
simply focusing on the impact on the vendor’s own portfolio. These more
objective plans call out the source of gain for items on promotion, including
other national brands and even private label items. Time-starved category
buyers appreciate the greater objectivity and comprehensiveness of this
approach to trade planning.
need to be more aggressive about leveraging vendor resources (tools and
knowledge) with respect to trade promotion planning and analysis. But
it should also be noted that manufacturers have much more to offer; they
can be a way to overcome organizational barriers as well. Vendors can
be a valuable resource in improving the quality and quantity of work
done by retail category managers by assisting with capabilities enhancement
and process improvement efforts. Only by making fundamental changes in
the work process and approach for their line managers can retailers hope
to truly “change the game” for the future.
What should retailers be doing to improve the efficiency of trade promotions?
What challenge does collaboration around trade promotions present versus
other shared practices?