White paper: Comprehensive Trade Management (PDF) - Oracle

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Dollars in Millions Cumulative Trade Event Contribution $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 41% of events 175 350 575 700 Number of Events Trade promotion effectiveness varies widely by event Source: “Trade Promotion : A Framework for Growing Profitability” by Booz & Company, Oracle Insight creates these scenarios as attributes that provide even more depth to the level of analysis that can be done. This attribute-based pattern or trend recognition contributes to a higher quality analysis of both pre- and post-performance analysis. #6: Get real-time visibility to trade plans and promotion results Companies generally lack the end-to-end view of financial, marketing and sales resulting from effective promotions. This partial visibility of market conditions results in multiple forecasts for revenue, volume, and trade spend. Differences in understanding among functional teams limit collaboration both internally and externally. Manufacturers also can benefit from more timely data. Some retailers provide near-real-time access to sales results, which can be critical in the first few hours of a promotion. Many companies have not exploited real-time visibility in a systematic way to plan and respond to consumer uptake of promotions. In fact, many companies are not able to interactively incorporate this data into planning assumptions to identify any “exceptions” of assumptions to reality. Meeting the Challenges: Comprehensive Trade Management Implementing a true end-to-end integrated sales and marketing process that includes comprehensive trade management functionality can enable sales and margin improvements for both the consumer goods company and its trade channel customers. Comprehensive trade management starts with the consumer as the central focus. It enhances account and category management, productivity and collaboration to stimulate consumer demand. This multidisciplinary process requires an end-to-end suite of application solutions that are integrated together. For years, manufacturers have endeavored to assemble and integrate the appropriate components of a full scope end-to-end comprehensive trade management suite; but they have had to resort to a variety of different applications that often fail to fully and successfully integrate between each other. 14
How the Process Works A comprehensive trade management process encourages bestpractice interactions of account team, administrative and corporate stakeholders. It combines nine disciplines: 2 Retail Category Management 4 Promo Modeling & Simulation 5 Promo Optimization 1 Marketing Resource Management 3 Promotion Planning & Fund Mgmt 6 7 Retail Coverage Planning 8 Retail In-store Execution 9 Settlement & Deduction Management Business Intelligence and Analytics Retailer Performance Scorecard 1. Marketing Resource Management: Marketing campaigns are created with promotion objectives and funds that tightly align with corporate business requirements and trade calendars are created and distributed. 2. Retail Category Management: Brand and category managers analyze retail performance, pricing and share of all commodity volume (ACV) to ensure proper coverage of the company’s categories down the lowest hierarchy of product and to the lowest level of the retailer’s store organization. Also this is where the view of both the consumers’ habits as well as the individual branch store locations’ performance of POS data is analyzed – generating a significant portion of the story of “cause and effect” that drives consumer marketing. 3. Promotion Planning and Fund Management: Key Account Managers will review the marketing, brand and category objectives and begin formulating the detailed plans for promotions to support the sales volume forecast and demand plan, including determining the right combination of in-store merchandising support. 4. Promotion Modeling and Simulation: Promotion planners will be able to create multiple scenarios by performing simulation modeling to develop the most effective promotional combination. 15
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