3 min read

Trade promotion management software: What it is and why it’s necessary

Bob Debicki

CPG & Retail Industry Head

Trade promotions are key to retail, CPG, and food service industries. Without effective trade promotion management software, businesses run the risk of overspending—and worse.

For manufacturers and their trading partners, trade promotion is a necessary component of a successful business. It not only can increase sales to meet revenue goals, but it can also grow market share to find new customers or expand into new categories. How are trade promotions done and why is it essential to have a robust trade promotion management software 

What is trade promotion management? 

A trade promotion can mean different things for different industries. For consumer products and goods (CPG) brands, a trade promotion is an invitation for customers to purchase or try a product at a discount. This is intended to drive demand, whether it is to move existing products to decrease a surplus or to create demand for a product in a new category. For food service, trade promotions are usually intended to provide incentives for distributors or operators. In turn, trade promotion management is the need to track, measure, and execute on all the moving parts and details of trade promotions, like manufacturing, distribution, and point of sale. It’s critical to ensure that trade promotions deliver the results necessary to make the promotion profitable, so it’s essential to have the ability to track the implementation, measure the redemption rate and other KPIs, and execute at the level necessary to drive outcomes at a manageable cost structure. 

Is trade promotion management software necessary?

Absolutely. Promotional dollars are expected by retailers and are the price of doing business. If your brand isn’t willing to invest in promotional programs, often, trading partners find one that is. With line of sight into every promotional price, tactic, duration and overall effectiveness, promotional opportunities can be tracked and adjusted to continuously drive toward the expected business value. Furthermore, cross-functional collaboration among supply chain, marketing, and finance allows leaders to keep an eye on promotion efficacy with much less care and feeding allocated to the process. This reduces the possibility of leaving money on the table or overspending. The ability to monitor, adjust, and optimize trade promotions is critical, and without using trade promotion management software, teams are left in the dark. 

What does trade promotion management software do? 

In short, it makes trade promotion planning and management easier and more effective. Although functionality across software varies, Anaplan offers several key components necessary for successful trade promotion management. With Anaplan, trade promotion managers can: 

  • Create an effective trade promotion plan. From the very beginning, Anaplan provides the ability to optimize trade promotion planning and create the framework necessary to then track and optimize the effort.
  • Use historical spending to set financial targets. Decrease overspending by using real, aggregated data to find the trade promotion’s most appropriate goal.  
  • Enable cross-enterprise promotions alignment. With every stakeholder on the same page, all teams can adjust their plans and track KPIs. 
  • Accurately plan unit volume. Another key to  overspending reduction, improving the ability to better estimate the unit volume needed can reduce surplus and the need for additional price manipulation or lengthened promotional periods. 
  • Track and identify ineffective promotions. Manage margin and decrease overspending by referencing both historical and actual data.  
  • Analyze promotion effectiveness, tactics, pricing, and execution. Using data visualization, reports, and dashboards, trade promotion management leaders can identify what’s working and what isn’t. These dashboards enable customized reporting and alerts to keep teams confident that trade promotions are performing as expected.

Why use trade promotion management software? 

Simply put, without trade promotion management, promotions are liable to veer off-course. If this happens, financial targets won’t be met, spending and margins will be imbalanced, and the overall impact of the promotion will be less than necessary. Trade promotion management software enables the most intelligent planning, analysis, and execution of trade promotions as possible, making them an effective way to stay within financial parameters.  

Conclusion 

Trade promotions are a staple of CPG and food service industries. Without the ability to effectively manage the promotions to meet financial goals, each promotion is at risk of causing overspending, product surplus, and even impact customer perception. Anaplan provides top trade promotion management software to maximize ROI on trade promotions and keep businesses on the leading edge. 

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