We Don’t Plan That Way

A CPGToolBox client heard from its sales team that they have never planned promotional events to the product SKU or product group level; in their words “We don’t plan like that!” That comment led to an interesting thought: why should a consumer goods manufacturer deploy a trade promotion management (TPM) solution, and should it conform to the yesterday process or build to the tomorrow process? Further, what are the objectives of the various stake holders in the organization and are they at cross purposes? This blog attempts to explore these issues, which will ultimately lead to change management issues…or not. More and more, trade promotion management solution initiatives are being driven by the finance department because, in part, trade promotion spending is growing steadily higher with return on investments growing steadily lower. A noted observer of the trade promotion space recently noted that the average trade dollars expended by CPG manufacturers has exceeded 20% of gross revenues, and that number is approaching double that 20% range in some categories and geographies. This pundit went on to declare that TPM solutions were no longer a source of competitive advantage, but TPM solutions are, in fact, a necessity. The sales team cannot be allowed to fight the effort to move to a more granular planning process; just because “We don’t plan that way.” In order for the tomorrow process to work, everyone from the senior management team to the rank and file account managers must be on board. Often times the account management teams fear that someone is scrutinizing their trade funds expenditures, and sometimes the account managers do spend money...