Trade promotion management (TPM) software helps companies plan, execute and analyze trade promotions to increase sales. These promotions can include special offers, discounts, coupons, and other marketing efforts.
TPM software is commonly used in industries such as consumer goods, retail, and manufacturing to optimize trade promotions and drive sales growth. It helps manage all aspects of trade promotions from planning and budgeting to execution and analysis, including features such as promotion planning and forecasting, budget management, approval workflows, reporting and analytics, and tools for managing partnerships with retailers or distributors.
Trade promotion optimisation (TPO) is a functionality that operates as an extension to a trade promotion management (TPM) solution. While TPM focuses on process improvement, TPO focuses on optimizing the trade promotion spend by analyzing the performance of trade promotions and identifying opportunities to improve their effectiveness. TPO software can include features such as promotion analytics and reporting, budget optimisation, and predictive modelling.
Trade Promotion Management (TPM) plays a critical role in driving sales and increasing profits for a business. TPM software allows companies to manage and optimize the effectiveness of their trade promotions, which can include activities such as special offers, discounts, coupons and other marketing efforts. The importance of TPM is highlighted by the following points:
1. Trade promotion spending is often significant and can be in the same range as a company's EBIT, making it essential to scrutinize.
2. Trade promotions are often challenging to manage due to the high degree of fragmentation and complexity.
3. Proper management of trade promotions can have a material impact on sales and profit, while poor management can have the opposite effect.
4. The management of trade promotions can be cumbersome, making TPM software a valuable tool to simplify the process and make it more effective.
Trade Promotion Management (TPM) refers to the set of processes and tools that companies use to plan, execute, and measure the effectiveness of trade promotions. This typically includes activities such as budgeting, deal negotiation, compliance tracking, and performance analysis.
Trade Promotion Optimisation (TPO) is a subfield of TPM that involves using advanced analytics and mathematical models to optimize the design and execution of trade promotions. This typically includes activities such as forecasting sales lift, simulating the impact of different promotions and pricing strategies, and allocating resources (e.g., budget, display space) to maximize return on investment.
In short, TPM is the general process of managing trade promotions, while TPO is a specific approach that uses analytics and optimization techniques to make trade promotion more effective and efficient.
The most effective solution for tracking trade spend will depend on the specific needs and circumstances of a company, but there are several approaches that are commonly used:
TPM software: One of the most popular solutions for tracking trade spend is the use of Trade Promotion Management (TPM) software. These systems provide a centralized platform for managing trade promotions, including budgeting, deal management, compliance management, performance analysis, reporting, and forecasting. They can help companies automate processes and improve the accuracy of data collection and analysis, making it easier to track trade spend.
POS data analysis: Many companies use Point-of-Sale (POS) data analysis to track trade spend. This involves collecting and analyzing data from retailers on sales, transactions, and inventory levels to understand the impact of trade promotions on sales. It allows companies to measure the lift generated by trade promotions and track the ROI of their trade spend.
Collaboration with retailers: Some companies collaborate with retailers to track trade spend. This may involve sharing data and working together to track the impact of trade promotions on sales, creating a better understanding of how trade spend is impacting both the manufacturer and the retailer.
Spreadsheet: Some companies rely on spreadsheet to track trade spend and other trade promotion activities, but it can be time-consuming, prone to errors and lack the ability to automate and streamline the process.
Combination of methods: Some companies may use a combination of these methods, to get a complete and accurate picture of their trade spend.
Regardless of the approach taken, it is important that the solution used provides accurate and up-to-date information, is easy to use and provides insights and analysis that can help improve decision-making process. It is also critical that the solution is able to integrate with other data sources and systems to provide a comprehensive view of the company's trade promotion activities.
Trade Promotion Management (TPM) software is typically used by consumer goods manufacturers and distributors to plan, execute, and measure the effectiveness of trade promotions. This includes companies that produce a wide range of products such as food, beverages, personal care, household items and many other fast moving consumer goods. TPM software can be used by both small and large companies. It allows these companies to optimize the design and execution of trade promotions, which can help them improve sales, manage costs, and build relationships with retailers.
Some specific examples of companies that may use TPM software include consumer packaged goods manufacturers, consumer electronics manufacturers, consumer durables manufacturers, and food and beverage companies. These types of companies typically have a large number of products, a wide range of retailers and distributors, and complex trade promotion landscapes, making TPM software a valuable tool for managing these complexities and tracking the impact of trade promotions on sales. TPM software can help to streamline the process, automate the routine tasks, improve decision-making and increase the transparency in the organization.
The main difference between trade promotions and consumer promotions is the target audience:
Trade promotions are targeted towards retailers and distributors, and are used to influence their buying decisions. Trade promotions may include incentives such as discounts, free goods, or advertising allowances to encourage retailers to stock and promote a product. They are used to boost sales and drive market share
Consumer promotions, on the other hand, are targeted towards end customers, and are used to influence their buying decisions. Consumer promotions may include discounts, free samples, or contests to encourage customers to purchase a product. They are used to increase brand awareness, boost sales, and drive market share.
The main purpose of the trade promotions is to increase the sales of products to the trade by offering special deals and incentives to retailers and wholesalers. Trade promotions can help manufacturers or distributors to increase their product’s visibility, achieve higher sales targets, and also to gain market share.
While the main purpose of consumer promotions is to increase the sales of products to consumers, ie the end-user, by offering special deals and incentives to consumers. Consumer promotions can be used by manufacturers or distributors to increase brand awareness, drive sales, and also to compete with other brands in the market.
Trade and consumer promotions can be used together to create a more comprehensive promotional strategy. Trade promotions can help to increase product availability and in-store promotion while consumer promotions can help to drive customer demand.
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