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Trading Up: Building Smarter Promotional Strategies

Source: www.businessobjects.com
Topic: Promotion

Sort Desciption: Promotional Strategies. Fact-based marketing and business intelligence tools are ... White Paper Trading Up: Building Smarter Promotional Strategies ...

Content Inside: A CGT White Paper Trading Up: Building Smarter Promotional Strategies Fact-based marketing and business intelligence tools are tightening up trade promotion measurement for consumer goods companies White Paper Trading Up: Building Smarter Promotional Strategies Sponsored by: IN ITS JULY-AUGUST ISSUE HARVARD BUSINESS REVIEW TOOK ON THE TASK OF reviewing and comparing 20 years of advice and theory on creating The High Performance Organization. With more than 10 research teams weighing in one conclusion about how to measure corporate performance stood out: Figuring out who stands tallest is far from straightforward; it depends upon which yardstick you use. The conclusion is highly applicable to the current practice of measuring the effectiveness of trade dollars spent by consumer goods companies with their retail customers. Consumer goods companies are standing taller in this area but exactly how tall depends on how trade spend is being measured. According to Hand Promotion Management manufacturers worldwide spend upward of $700 billion annually on trade promotions. Over $500 billion of that is spent in North America alone. Additionally trade promotion expenses (which range from 14-20 percent of revenues) rank second only to cost of goods sold on manufacturersprofit and loss statements. According to marketing and sales management consulting firm Cannondale Associates it accounts for as much as 54 percent of total marketing budgets. Before the current period of progressive accountability consumer goods companies maintained freewheeling untracked spending for their major accounts in the name of co-op advertising slotting allowances and failure fees to name a few. The current state is not perfect. Companies still pay for real estate at their key accounts without knowing exactly what that spending yields. But the concept of trade spend effectiveness is changing from a random sales stimulation tactic to a fact-based efficient management strategy that depends o ...

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