Phy-gital Roundtable: Breakfast Roundup from Germany and Netherlands

02 May '15 | Debjyoti Paul

German Shoppers: Meet Them in the Fast Lane to Phy-gital

15 January '15 | Ralf Reich

Shoppers Will Share Personal Information (But They Don’t Want to be “Friends”)

15 January '15 | Anil Venkat

Modernize or Perish: Property and Casualty Insurers and IT Solutions

14 January '15 | Manesh Rajendran

Benelux Reaches the Phy-gital Tipping Point: Omnichannel Readiness is Crucial

13 January '15 | Anil Gandharve

The New Omnichannel Dynamic: Finding Core Principles Across Industries

13 January '15 | Debjyoti Paul

Technology does not disrupt business – CIO day 2014 Roundup

02 December '14 | Anshuman Singh

Apple Pay – The Best Is Yet To Come

02 December '14 | Indy Sawhney

Digital transformation is a business transformation enabled by technology

01 December '14 | Amit Varma

3 Stages of FATCA Testing and Quality Assurance

06 October '14 | Raman Suprajarama

3 Reasons why Apple Pay could dominate the payments space

18 September '14 | Gaurav Johri

Beacon of Hope: Serving Growth and Customer Satisfaction

05 August '14 | Debjyoti Paul

The Dos and Don’ts of Emerging Technologies Like iBeacon

30 July '14 | Debjyoti Paul

What You Sold Us On – eCommerce Award Finalist Selections

17 July '14 | Anshuman Singh

3 Steps to Getting Started with Microsoft Azure Cloud Services

04 June '14 | Koushik Ramani

8 Steps to Building a Successful Self Service Portal

03 June '14 | Giridhar LV

Innovation outsourced – a myth or a mirage or a truth staring at us?

13 January '14 | Ramesh Hosahalli

What does a mobile user want?

03 January '14 | Gopikrishna Aravindan

Sales Baseline – The million dollar question in Trade Promotion Management

Posted on: 23 February '12

Over the past few years, I’ve been attending workshops with business teams on aligning business processes with Trade Promotion Management Optimization (TPM & TPO) systems. These sessions would typically lead to broad level agreements on processes across different functional areas touching finance, sales, marketing and supply chain amongst others.

As part of the context and objective setting, business users highlight the following as the business problems that they would like the new solution to address:

  1. Assess the effectiveness of promotions
  2. Connect all functional areas with a single view of promotional information
  3. Improve forecasting
  4. Measure promotion impact using different sources of data – POS, primary, syndicated, etc.
  5. Variable and fixed funds management
  6. Learn and improve future planning

In these detailed sessions where we try to put a structure and process to find solutions for the above problems across organizations, a common thread comes out – availability of baseline sales data.

Over the course of implementations, I realized that agreeing and putting a structure around baseline sales is very critical for the acceptance of the solution and, ultimately its success. The reason being, sales baseline plays a critical role in:

  1. Calculating the increment
  2. Agreeing targets with the trade
  3. Negotiating with the trade for funds commitment in the year ahead
  4. Evaluating the effectiveness of promotions
  5. Ultimately, in approving and launching which promotions to run and which to drop

When sales baseline plays such a critical role, why is it such a tough nut to crack? The following graphic puts a perspective to this challenge.

 

Few ways to address these issues are:

Process:

  1. Identify a clear owner who will provide sales baseline to be used by promotion planners
  2. Agree and publish the process of calculating and arriving at the sales baseline
  3. Agree on the levels at which promotions will be planned (for example – brand level, pack size or a SKU from a product perspective; outlet or chain or a region from a customer perspective)

System:

  1. Have flexible configurations to allow promotion planners to plan promotions at different levels for product and customers, as agreed
  2. Based on the maturity of the business, allow planners to edit system provided baseline numbers with workflow approvals in place, to validate these edits

Does this resonate with what you have encountered in your organization? With Trade Spends increasing and organizations looking for optimizing spends, a base for comparison and benchmarking becomes all the more pertinent.

Praveen Srivatsa

Praveen Srivatsa is a Program Director in the CPG & Manufacturing Industry Group with more than 13 years of experience in the Information Technology industry. For the past 8 years, he has been working in CRM & Trade Promotions Management domain with Fortune 500 CPG organizations and retailers. Business process alignment with IT systems and conducting cost benefit analysis of IT projects are his areas of expertise. Praveen was involved in implementing a TPM solution for a world leading CPG organization in more than 30 countries in Asia Pacific, Middle East and North Africa, Central and Eastern Europe and Latin American countries.