Trade Promotion Optimization: Finding the Missing Block in the Consumer Products Industry

Jul 11, 2017

CPG Industry

The consumer products industry has been struggling with how to find the right trade promotion optimization (TPO) strategy to not only boost its sales but to make a lasting impact on its customer base. For those who thought that trade promotion optimization is the magic wand needed to disrupt the market, the dismal performance of players in consumer products is surely a wake-up call to consider something more concrete and result-oriented. The problem, it has been realized, is not in trade promotion management or TPO in this case. Rather strategy makers have gone wrong in choosing the ‘one-size fits all’ approach.

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Lesson One from Trade Promotion Optimization: Custom Fit is the Right Fit

The sales team of any consumers products company will experience positive changes, only if it comes to term that success in the industry is a mix of cross-channel marketing, trade sales promotion, trade marketing, trade promotion management, along with TPO. Until recently the TPO has failed to draw enough profits for organizations, emerging as a challenge rather than a solution for the players in the industry. Lack of focused data is one prime reason behind this condition.

Industry experts at Quantzig strongly believe that the only way to come out of the TPO conundrum is to switch to methodologies which are appropriate to that consumer products company. Unlike the one-size fits all approach, the custom fit approach is more driven towards picking up the most useful data from the trade promotion analytics and utilizing it to reach actionable insights which will empower the sales as well as the marketing teams to revamp, relaunch, and refocus, the entire business strategy.

Fluid data backed with flexible analytics is thus the key to building a highly customized solution for specific manufacturers. Techniques like machine learning, neural networks, and decision tree learning have been employed by major players in the consumer products industry to leverage the market to their advantage.

Turning Trade Promotion Optimization Usable

Consumer products companies which have failed miserably with TPOs are the ones who did not pull in the sales team into their optimization strategy. Instead of adopting a singular approach, and following a static format, it is recommended that all departments work in tandem to provide a multidimensional perspective on things. This will result in the better crafting of the promotions and improved results of trade promotion optimization.

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