| Automation of trade marketing and distribution | | | | exempts them from the costly and inefficient task of |
| The Consumer Packaged Goods (CPG) industry | | | | following paper trails on claims, a lengthy process that |
| today has seen a historically unprecedented amount | | | | retailers often exploit to their own advantage. |
| of pressure being placed on manufacturers. With | | | | Advantage #4: No trade marketing initiative is |
| increasing consolidation across distribution and retail | | | | complete without accurate analysis of profitability, |
| channels, manufacturers are struggling for visibility, as | | | | which is by no means an easy task. Automated trade |
| well as struggling to meet customer demand | | | | marketing solutions allow manufacturers to analyze |
| profitably. | | | | profitability based on a wide variety of key |
| Significant Spending | | | | performance indicators (KPI). |
| In this scenario, one of the most difficult and costly | | | | Solutions for CPGs |
| challenges facing manufacturers is how to maximize | | | | A variety of SAP and Siebel solutions are available for |
| returns from trade spending, or spending aimed at | | | | automating trade marketing. Oracle Trade |
| marketing to distributors, wholesalers and retailers. | | | | Management, for instance, is a comprehensive |
| According to one survey by AC Nielsen, trade | | | | solution for CPGs. With emphasis on integrated |
| marketing spend consumes 11 per cent of sales, | | | | business flows, it is aimed at helping manufacturers |
| making it the second largest cost; next only to the | | | | adopt best practices to align data, automate |
| cost of goods sold. Additionally, trade marketing also | | | | processes, and analyze customers and promotions. |
| places a significant burden on administrative | | | | Siebel eConsumer Goods 7 is another CPG-specific |
| resources. | | | | solution, which incorporates industry best practices |
| Despite this, studies show that most trade marketing | | | | for trade promotion management, trade funds |
| and promotion programs are neither cost-effective | | | | management, and deduction resolution. It delivers |
| nor efficient as sales and marketing tools. Research | | | | pre-built integration with back-office systems, |
| suggests that nearly 90 per cent of trade marketing | | | | including SAP. |
| initiatives do not produce a positive return on | | | | The SAP CRM Trade Promotion Management and |
| investment. | | | | Marketing Development Finds solutions are designed |
| The problem exists partly because of ineffective | | | | for companies using trade funds to promote |
| business processes that characterize most | | | | turnover, and having difficulty making decisions on |
| manufacturer-retailer relationships: relationships not | | | | where and how they are spent and accounted for, |
| altered because manufacturers fear the reactions of | | | | as well as their efficacy. |
| their prized customers who have thus far profited. | | | | Among analytics applications, the Oracle Siebel |
| The bigger problem, however, lies in the sheer | | | | Analytic Applications for Trade Management come |
| inability of most manufacturers to properly track and | | | | with an open architecture that provides far greater |
| control trade spending. | | | | accessibility to the data warehouse supporting a |
| Thus, if CPG companies can redirect inefficient | | | | range of analyses. The SAP® xApp™ Analytics |
| spends and reduce excess promotion costs, they | | | | Composite Application for Consumer Products |
| stand to gain a dramatic increase in returns from | | | | provides information on a variety of KPIs such as |
| sales. | | | | trade promotions by channel, tactic analysis by sales, |
| Significant Spending | | | | actual versus planned promotion sales, actual versus |
| Automation solutions offer CPG companies a number | | | | planned budget and budget availability. |
| of significant advantages in the area of trade | | | | Time Saved = Money Earned |
| marketing and promotion: | | | | If retail companies can adopt industry best practices |
| Advantage #1: They allow manufacturers to analyze | | | | with regard to planning and execution of trade |
| markets segmented on the basis of consumers/ | | | | marketing initiatives backed by fully integrated |
| products, and plan and execute full-cycle trade | | | | automated solutions, they will have a chance to |
| marketing initiatives accordingly. They also allow | | | | capitalize on every spent dollar of their trade funds. |
| manufacturers to accurately plan their initiatives and | | | | And this considerable saving in time and costs means |
| incorporate anticipated incremental sales volumes into | | | | significant increase in profits. |
| sales forecasts. | | | | To know more about <a rel="nofollow" |
| Advantage #2: They provide real time data on trade | | | | onclick="javascript:_gaq.push(['_trackPageview', ' |
| fund spending, promotional performance and so on, | | | | outgoing/article_exit_link']);" href=" Oriented |
| as well as allow for the reallocation of funds across | | | | Architecture </a> and <arel="nofollow" |
| accounts and channels. Automated solutions also allow | | | | onclick="javascript:_gaq.push(['_trackPageview', ' |
| field sales agents to easily monitor retailer compliance | | | | outgoing/article_exit_link']);" href=" industry</a> |
| remotely or through store visits. | | | | check out |
| Advantage #3: Many solutions also let manufacturers | | | | ITCINFOTECH website. |
| automate deductions, claims and settlements. This | | | | |