Consumer Packaged Goods

Strategies for Effective Trade Promotion Planning

Fragile customer loyalty due to the low cost of switching between products, easy market entry for new players and competition for limited shelf space at retail outlets are amongst the biggest challenges for FMCG/ CPG industry. The answer to these challenges is-Effective trade promotion.

A robust trade promotion management (TPM) system is essential for organizations to reduce the unexpected deductions, monitor retailer promotion compliance, implement best practices for promotional campaigns, and have 'one version of truth' in planning and decision processes, which would result in optimum realization of the expected return on investment (ROI). Large consumer goods manufacturers are currently grappling with the challenges involved in implementing compelling TPM solutions and services. In order to improve sales margins and increase consumer consumption, manufacturers must look at sketching a strategic trade promotion plan for execution, evaluation, and recalibration.

This paper lists various channels through which inputs can be obtained for an effective TPM strategy:

  • Social Media Integration and Mobile Applications: Leveraging social media to mine for customer insights help CPG companies tailor customer-centric promotion strategies. Information provided by consumers through mobile apps help organizations in tracking promotion execution at store level
  • Community Collaboration: Promotion managers can collaborate with retail community to gain workable ideas based on their experiences, thereby serving information on how promotion events were received by customers at the stores, enabling promotion managers to execute events with high probability of success through joint planning
  • Mobile Enablement: Organizations must empower their sales representatives with mobile applications to capture real-time data, provide inventory status and perform other in-store activities. These smartphone applications can be integrated with TPM modules to access store-related information anytime-anywhere on a single application

A well- designed promotion plan provides competitive edge to organizations by maximizing returns and enhancing visibility at retail stores.

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