Reasons Why TPM Came into the Picture In 2023

Trade promotion management includes all activities performed by the consumer goods sales team and related functions. Also, These activities customarily include setting volume and spend targets/budgets, planning and executing distribution changes, cost changes and promotions, dogmatic sales and spending, and resolving spending commitments with customers.

Part of the trade promotion management system or trade spent management system sales performance management system (SPMS), CPG Enterprise offers higher advanced capabilities for managing closed-loop business planning and trade facilitation management (TPM) processes. However, With transactional and advanced analytics, built-in insights, and best practices, the system implements integrated management for improved commercial decision-making, optimized deal enablement planning, and increased customer profitability, and achieves higher returns on transaction spend. 

When it came into the picture?

Each of these activities includes multiple functions such as approving activities, applying pricing terms (i.e. deducting invoices), providing sales quotes for demand planning, researching deductions and predicting end-of-month transaction occurrences. There are process steps. As brand sales, distribution, promotions and discounts increase and more people participate in the process, some foreseeable challenges arise.

• Transactions and business-critical tasks take a long time to complete
• Information is disorganized and outdated quickly 
• Performance is difficult to assess and re-predict. Another predictable outcome is the rapid expansion of trade spending. It is often worth 20% of total sales in dollars. A TPM system can help here. 

Management to Optimization

Trade promotion optimization (TPO) provides a more thorough understanding of promotion performance, learning whether the return on investment (ROI) is positive or unfavorable, tactics and discounts, and/or promotion frequency. Like TPM, TPO can run without a system. And like TPMs, TPOs have many dynamics and process steps that are difficult to perform manually. Also, Two specific symbols are data sources and simulations. His first TPO results to understand performance and ROI are commonly referred to as post-event analysis or PEA. 

A very typical input for PEA is point of sale (POS) data. Also, This indicates the number of products sold to buyers as part of the promotion. POS data can come from various syndication suppliers (NielsenIQ, IRI, Spins, etc.) or retailers. However, Other important details required for analysis already exist in the advertising plan part of the TPM system. If you do this without a system, you have to conduct the data and manage the reports. 

A TPO system with post-event scrutiny automates the formulation of these reports. Also, The second part of the TPO task, developing performance improvement strategies, can be improved through predictive baselines and simulations. The simulation calculates the promotion results for a combination of tactics (usually discounts, promotions and displays). This feature allows you to “test” different options while creating a custom plan. Unlike manual processes, the creation and maintenance of forecast baselines and promotional simulation models is part of the system in TPO services. 

Breaking the Barriers

To break down these barriers, many consumer goods companies are adopting integrated business planning (IBP) processes to facilitate cross-departmental information sharing and collaboration. Also, A common form of IBP is Sales & Operations Planning or S&OP. The goal of S&OP is for various stakeholders within the company to agree on a “consensus forecast.” The sales team’s inputs to S&OP are forecasts, including their assumptions about the future.

IBP goals can be achieved without a system. However, performing the process manually comes with overhead and known vulnerabilities, usually associated with Excel limitations. The IBP service provides the ability to scale processes to ensure repeatability. It also creates links between features by importing demand forecasts, exporting sales forecasts, and sharing forecasts. Finally, we’ll see how analytics evolves from Excel reports that must created and updated manually to automated reports that improve the speed at which you extract insights from your data. 

Pricing 

Where TPM and TPO have a Promotion (Revenue Management) scope, RGM has a Total Revenue Management scope. However, Given this scope, more emphasis placed on the unadvertised part of the business, the pricing that drives it, and the combination of pricing and advertising strategies to achieve your goals. A data science team usually required to get the RGM right. In addition to the promotion models used in TPO simulations, RGM value price elasticity models help understand how volumes can change in response to price changes. These can used for forward forecasting and retrospective analysis.  

These can used for forward forecasting and retrospective analysis. Other analyses common to RGM include:

• Categorize profits into categories such as brand profit margin, customer profit margin, service cost, tax, etc.
• A price ladder helps you understand the difference between your products (including your competitors) and your customers. 

Why Trade Management Software is Significant 

Streamline trade promotion management by planning together at an aggregated, detailed level and adding promotions, campaigns, and products without delay. Ad planners can adapt flexible models and calculations to meet changing needs. 

Make an Optimal Promotional Plan

Accurately align trade promotion plan costs with the dealer and end-customer demand signals across products, geographies and timeframes.

Identify and Track ineffective promotions

Increase deal planning capabilities while effectively allocating trade spending across the enterprise by tracking trade spending and trade ROI across venerable and actual data.

Analysis of Promotions with Visualization 

Generate zero-latency messages and dashboards on all your demand plans, forecast KPIs, and actual data. Enables highly interactive reporting and analytics on advertising data.

Turn Away from Email-Based Information Sharing

With zero-latency dashboards, organizations can share sourcing data with internal and external partners and suppliers to increase the visibility of cost-saving opportunities and accelerate planning decisions. 

Empower Master Data Management

End users can easily create and adjust master data for new lines, customers, and promotions in real-time. Empowering data and maintaining them becomes important. 

Final Words

A TPM adds design, control, automation, and vision to the sales planning and trade management. The arrangement becomes the sales team’s operating system. Add workflows to standardize, centralize, and document appropriate approvals. Your data is in control, so reports on sales, trade spend, and promotions are accessible at the click of a button.