Cracking the Code: Navigating Trade Promotions in Complex FMCG Companies
In today’s fiercely competitive FMCG industry,running successful trade promotions requires a coordinated effort across many functions,each with its unique challenges and deadlines. With so much at stake, the pressure to execute flawless promotional campaigns has never been higher.
In this blog we’ll explore the different aspects of running efficient trade promotions across functions and account teams and four ways you can better lead trade promotions.
This is where it gets murky
Managing internal processes often ends up taking a backseat to retailer collaborations which can lead to many different challenges. When so many functions are involved in the trade promotion process, it becomes a real challenge to run everything efficiently and smoothly.
Some of the common challenges that arise, related to managing promotions in large organizations include the following:
Different functions and account teams have their own way of managing promotions
“Salling Group, Coop, and Dagfora account teams all have their own practices when it comes to analyzing trade promotions.I don’t really have any visibility into what works on a top level, and I am not sure if we are doing a good job with promotions.” - Country Manager for a Danish FMCG company
“Sales is used to analyzing promotions in one way, finance uses a different data set for their promotion analysis, andmarketing is not reviewing the promotion performance. Many different departments are using their own self-made spreadsheets.” – Revenue Growth Management Director for a Nordic FMCG company
No Transparency on future trade promotion plans
“Uncertainty regarding future promotion plans is the biggest challenge in securing the supply.” – Supply Chain Director for a Finnish FMCG company.
“I don’t have visibility on what is planned with other chains, let alone what kind of marketing activations are planned ona store-level. This could lead to cannibalization of each other’s activities.”– Key Account Manager in a Finnish FMCG company
Lots of manual steps in the process can mean additional workload and problems with data quality.
“We have this shared spreadsheet that we are using for sharing information about upcoming promotions. I fill in information in one sheet, and our Customer Insights Manager copies it into another one. It is a lot of work to keep it updated and there are often mistakes.” – Key Account Manager in a Swedish FMCG Company
Considering the stream of different functions
Let’s take a deeper look at some of the different roles that are normally involved in the trade promotion process in a consumer goods company.
Sales management and leadership functions play a role in deciding on trade promotion strategy and guidelines. Meanwhile, key account managers and account directors are mainly planning chain promotions for selected retailers. They also negotiate trade promotion plans and review chain promotion results. Brand managers are focused on ensuring that brand activations in store are aligned with the brand objectives and media visibility.
Trade marketing managers are planning and reviewing in-store promotions and coordinating material creation and logistics.Controllers review promotion profitability and investments. While field sales is executing promotion plans on a store-level basis, and business analysts are supporting business stakeholders with in-depth promotion analysis.
This is all to say, the waters around promotion planning and analysis get muddled when many different functions have different processes surrounding trade promotions. Insights are lost, and a clear path towards profitable growth is out of sight.
Four tips on how to optimize trade promotion practices in any organization
Using the four steps listed below, any consumer goods company can start to better align their trade promotion processes.
1. Clearly define promotion processes across different retailers and functions
The first step to managing trade promotions efficiently and more effectively is to ensure that you have documented your holistic process thoroughly. This process needs to consider different timelines and practices defined by your different retailers. However, your internal promotion processes should be aligned across retailers.
If this process is daunting, try hiring expert consultants to facilitate and strategize the cross-functional work.
2. Form a single source of truth for promotion data
Ensuring a single source of truth for promotion data has endless benefits. Manage promotion master data in one solution and compliment it with different sales data sources, product information and COGS data. Create one source of truth, where everyone is using the same set of numbers is optimal.
When your data considers past and future promotions, all in the sameplace, alignment across functions improves tremendously.
3. Maximize transparency and use a campaign calendar for promotion planning
A campaign calendar can allow different functions to access the latest promotion plans directly at the source. For example, this could allow a key account manager to quickly identify if there are gaps during the peak seasons. A field sales manager would be able to see all the planned activities in a single view. Integrating with a CRM would improve this process even further. Brand managers can ensure that trade promotions benefit from media marketing in an optimal way. Additionally, a campaign calendar provides great context for promotion analysis for a business analyst. A campaign calendar enables seamless coordination between all roles and functions, providing clarity on upcoming plans, and ensures everyone remains aligned.
The new campaign calendar function that was recently launched in A² Trade Promotion provides a full-picture view of all trade promotions. Promotion campaigns have never been more aligned.
4. Use modular promotion reports to fulfill the needs across different functions
Ready reports that are tailored for the needs of different users and functions is essential. For instance, a key account manager could then easily track the promotion impact on sales for various brands in their chains. Similarly, a brand manager could analyze the promotion investment distribution across retailers and chains. Furthermore, a controller could delve into the specifics of promotion profitability, which would enable them to identify key areas of improvement.
Complex no more
By implementing these tips, navigating trade promotions in a complex organization will be streamlined. Efficiently managing trade promotions has never been more crucial, especially during times of volatility and increasing costs. In the consumer goods industry, achieving profitable growth is possible by using promotions to drive growth, instead of hindering it.