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    Glossary

    For any business, but particularly in the Consumer Package Goods (CPG) sector, it is crucial to effectively handle trade promotions. With 93% of CEOs shifting their focus on growth, the battle for both shopper awareness and retail shelf space just got more intensive. Hence, it’s natural for the companies to dedicate around 27% of their revenue towards trade promotions.

    But considering the significant investment; mastering trade promotion management is now essential for maximizing return on investment (ROI).

    What is Trade Promotion Management (TPM)?

    Trade promotion management involves systematically planning and assessing promotional activities in order to boost sales and enhance collaboration between manufacturers and sellers.

    The trade promotion management process can be broken down into four key stages:

    Promotion Planning:

    In this stage, you define your objectives and identify your target markets to ensure your promotions align with your overall business goals. Analyzing past promotional performance is crucial here to inform your future strategies.

    Budget Allocation:

    Effectively distributing your budgets across different promotions and closely monitoring expenses is essential for optimizing ROI. Efficient management of trade spend is essential to avoid exceeding budgets and to ensure efficient utilization of funds.

    Promotion Execution:

    Collaborating with your retail partners to implement promotions effectively is a must. Utilizing a robust promotion management system can streamline this process and ensure that everyone is on the same page.

    Performance Tracking:

    Analyzing data from previous campaigns allows you to assess the effectiveness of each promotion using KPIs. This helps you refine your approach and enhance future promotional efforts.

    Wrapping Up

    Effective trade promotion management requires more than just giving discounts; it involves a strategic approach aligned with business objectives. Ongoing evaluation and adjustment are essential for maintaining achievements in a growingly competitive industry. By understanding the trade promotion management process and using appropriate tools, CPG firms can turn trade promotions into major sources of revenue.