Navigating the Trade Promotion Maze

Navigating the Trade Promotion Maze: Top 5 Challenges CPG Companies Face and How to Overcome Them

Trade Promotion Management (TPM) is a vital component of success for Consumer Packaged Goods (CPG) companies. In an increasingly competitive market, effectively managing trade promotions can make all the difference in maximizing profitability. However, this crucial aspect of business comes with its own set of challenges that CPG companies must navigate. Let's take a closer look at the top 5 challenges and explore their solutions.

1. Spreadsheet Chaos

Challenge: Deals are often managed in Excel, separate from the ERP/Accounting system, requiring manual data entry into multiple systems for reporting.

Solution: Utilize iTPM for real-time visibility to all stakeholders, along with financial controls and structured workflow.

2. Unpredictable Trade Spending

Challenge: Quarter and Year-end trade spending surprises.

Solution: iTPM can help reduce or eliminate surprises by using budget and accrual, ensuring you always know your net trade spend liability.

3. Disconnected Budgeting

Challenge: Trade budgeting is outside the ERP and disconnected from trade activities.

Solution: Implement a closed-loop system for complete financial visibility, including Budget vs. Planned vs. Actual vs. Latest Estimate vs. Earnings.

4. Tedious Deductions

Challenge: Deductions are time-consuming to process and aren't matched back to promotions and products.

Solution: iTPM will allow for easier deduction resolution that supports more accurate item and customer-level P&Ls.

5. Costly Third-Party Solutions

Challenge: Third-party TPM solutions are expensive and difficult to implement.

Solution: Choose a TPM that is built-in as a Native solution to your financial results in a unified platform, reducing implementation and future maintenance costs. This also provides real time analytics to the whole organization so stake holders can make timely decisions.

Trade Promotion Management is a critical aspect for CPG companies, but it does come with its fair share of challenges. By utilizing innovative solutions like iTPM, companies can overcome these challenges and optimize their trade promotion strategies.

From streamlining spreadsheet chaos to reducing unpredictable trade spending, implementing a closed-loop budgeting system to simplifying deduction resolution, and choosing a cost-effective native TPM solution, CPG companies can navigate the trade promotion maze and achieve greater success in the dynamic consumer goods market.

Click here to schedule a call with our CPG subject matter expert Ron Rubens