Trade Promotion Management

You are in: Industries We Serve

• Consumer Products
  • Solutions
    • Transformation through Technology
    • ERP Integration
    • Finance & Employee Transformation
    • Service-Oriented Architecture for Consumer Products
    • Transformational Outsourcing
    • Consumer-Driven Replenishment
    • Radio Frequency Identification (RFID)
    • Supply Chain Management
    • CRM, Sales & Service Mobility
    • Customer Profitability
    • Global Data Synchronisation
    • Trade Promotion Management
    • Business Intelligence
    • Product Lifecycle Management

Investing in the Right Incentive Programs With Retailers to Enhance Sales

Consumer products companies’ trade promotion budgets have escalated to 14% or more of the average firm’s gross revenues. Despite significant investment, many companies wonder “How profitable are my promotions?” Capgemini helps clients better understand the costs of promotions, along with what works and what does not, so they can focus promotions on efforts that will increase profits.

Achieving Reduced Spending and Increased ROI

Capgemini has experience with leading companies in all areas of the promotions management process. As an example, Capgemini worked with a European cheese company to implement an SAP CRM Trade Promotion Management (TPM) solution that has resulted in efficiency gains and more effective evaluation of promotions. A number of benefit areas have been identified, including a reduction in manual administrative work of up to 12% to 15%; a potential sales increase of 1% to 8%; a reduction of invoice record write-offs; and margin improvement.

Capgemini’s approach to TPM focuses on identifying key benefit areas, including field account planning, sell-in and negotiation, retail execution, validation and settlement, and evaluation and analysis. By improving trade promotion processes, manufacturers can expect to achieve:

• 10% to 25% reduction in trade promotion spending, with no change in sales volume.
• 1% to 4% increase in pre-tax earnings.
• Increased trade promotion ROI of more than 25% on average--and more than 200% for some events.
• 40% reduction in outstanding deductions balances.
• Reduction in trade spending from 17% of sales to 13% of sales.

These benefits are achieved through improvements in:

• Planning: An effective, formal plan should be based on past history, the nature of the customer, the brand/product, and corporate objectives.
• Executing: Having the right processes and tools in place avoids costly deductions expenses and overspending due to poor accounting.
• Analysing: Studies show that anywhere from 50% to 90% of promotions are not profitable. Integrating key information regarding promotions helps manufacturers target those that yield results.

Contact Us

If you have specific business needs or objectives that you would like to discuss, or if you’d like a consumer products specialist to get in touch with you, contact us.