CPG Chatter

As a long-time optimist,  I believe 2012 will be a very successful year — with or without significant improvements in the economy.  Businesses and consumers have proven to be both resilient and smart.  They are doing the best they can under the current circumstances and will continue to position themselves for great success when the economy finally recovers (and it will recover and eventually grow.)  One area that is clearly in a transition this year is trade promotions.  It remains important to Manufacturers and Retailers and the desire to improve its effectiveness is strong.

With that thought in mind, I wanted to share some Trade Promotion Management (TPM) predictions and insights for the coming year:

1. While trade promotion budgets will likely remain flat, expect to see a more ‘optimized’ use of funds. That means more tactics on more products in more targeted periods based on a better understanding of what consumers want and which promotions are working.

2. Understanding the profitability of individual trade promotion activity will be important. There will be a lot less of ‘just do what we did last year.

3. Expect to see a lot of trade promotion activity in the Natural and Organic space driven by both Retail and Manufacturer desires. Many consumers are just discovering this space and sellers need to get their attention.

4. With the triumph of Software-as-Service (SaaS)-based trade promotion management solutions, expect to see more and more companies abandon static spreadsheets for software-based tools. The perfect storm is forming for buyers – tremendous improvements in visibility and effectiveness can now be gained at a low cost and high ROI within the first year.

5. Many companies will take TPM efforts to the next level with the incorporation of corporate objectives and sales planning and tracking. A good TPM solution will help Consumer Packaged Goods (CPG) companies run business better (and be aligned with how they operate their business.)

6. Eventually there will be a marriage between trade promotion and consumer marketing. The courtship is now beginning (in many cases reluctantly.)

As the economy and technology continue to drive change, expect both CPG companies and consumers to continue to be resilient and focused on how to get the most out of the situation. Trade promotion activity will get even more intense and those with the best visibility into effectiveness will emerge as winners. Look for a big shift from Excel® to purchased SaaS solutions over the next two years. Also look for both manufacturers and retailers to invest heavily into 1:1 marketing. At some point, this will likely create a convergence of shopper marketing activities and trade promotion activities.  Now won’t that be interesting to watch!