White paper: Comprehensive Trade Management (PDF) - Oracle
White paper: Comprehensive Trade Management (PDF) - Oracle
White paper: Comprehensive Trade Management (PDF) - Oracle
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process. Sales executives today need to know both the baseline<br />
and lift to understand the incremental growth necessary to achieve<br />
the desired ROI.<br />
Retail execution is also not easily managed. Manufacturers face<br />
challenges in planning and executing at store level, including sales<br />
and merchandiser coverage, routing, order and asset management.<br />
Consolidating and tracking retail compliance on ads, display, shelf<br />
space, assortment and price is difficult. Limited scorecard<br />
capabilities reduce manufacturers’ ability to evaluate retail<br />
performance and profitability.<br />
The intent of<br />
<strong>Comprehensive</strong> <strong>Trade</strong><br />
<strong>Management</strong> is not only<br />
to be more strategic, but<br />
also to leverage a<br />
growing wealth of point<br />
of sale data that enables<br />
more alignment between<br />
individual tactical<br />
decision making by the<br />
rep and the store buyer.<br />
Goals and objectives vary<br />
with so much more<br />
regularity, depending<br />
upon the combined<br />
environments of channel<br />
and supplier that the<br />
consumer-centric model<br />
must enable a better<br />
response to the<br />
marketplace demands.<br />
#5: Transition promotion planning from an art to<br />
a science<br />
Promotion plans are still too often the result of guesswork or<br />
inertia (minor revisions to last year’s plan). 74% of planned trade<br />
expenditures are based on history, perpetuating poor historical<br />
performance. 11 Data driven analytical models are already more<br />
reliable than traditional methods of estimating performance under<br />
most conditions, and more importantly, they make it possible to<br />
plan hundreds of localized promotions that would be beyond the<br />
capacity of manual approaches.<br />
What is often missing is the capability to generate insightful and<br />
appropriate decision making power without the stress, time and<br />
pain required in today’s analytical processes. The problem is<br />
complex, compounded and confounding. The primary post event<br />
measure is still sales volume, not profitability or ROI. Of 52% of<br />
companies that measure post event performance, only 48%<br />
measure ROI 12<br />
Analytics can help with promotion evaluation as well. Lack of<br />
analytics contributes to over-spending of trade budgets,<br />
misallocation of marketing resources, and inaccurate financial<br />
reporting. The problem most vendors have struggled with is the<br />
dynamic effect that environmental conditions (e.g. seasonality,<br />
weather, competitive deals, etc.) will have on the pre and post<br />
evaluation of performance. What is required is a sound attributebased<br />
statistical science that takes the pure historical facts and<br />
11 Consumer Goods Technology/AMR Research “2009 Sales and Marketing<br />
Report,” June, 2009<br />
12 Ibid<br />
13