ATTENTION CPG MANUFACTURERS: FIVE WAYS YOU CAN STOP LEAKING REVENUE TO RETAILERS                   MEI Computer Technology...
Webinar will start in 5 minutes Superior Trade Promotion Management can lead to a competitive advantage  Source: Infosys
Webinar will start in 4 minutes 10-30%                     of revenue spent on trade                            promotions...
Webinar will start in 3 minutes 30%                  of your sales force’s time is spent                  manually managin...
Webinar will start in 2 minutes 65%                  of CPG Executives are feeling the                  pressure from reta...
Webinar will start in 1 minute 67%              of the marketing budget is used                  towards trade promotion s...
ATTENTION CPG MANUFACTURERS: FIVE WAYS YOU CAN STOP LEAKING REVENUE TO RETAILERS                   MEI Computer Technology...
PresenterRob BoisDirector of Product MarketingMEI Computer Technology GroupModeratorAbby ChitesterDirector of MarketingMEI...
Agenda•   Introductions•   Today’s Reality•   Technology & Processes•   TPM Performance Gaps•   Disciplined Approach•   Tr...
Who is MEI?          Headquartered in                               Established in 1983          Montreal, CanadaClient ba...
The Growth of Store Brands• 35% of shoppers are trying store brands for  the first time• Store brands cost 1/3 less than n...
The New Shopper• Moving to store brands                               • Millennials• Stock outs = brand                   ...
Rising Economy = Rising Costs                          Fuel                        Prices &                         COGS  ...
CPG’s Response:• Buy down price• Maintain share at any cost• Push volume over profitability• Shift dollars from advertisin...
The Result                              Tier 2 and 3                             brands can’t                             ...
The Tipping Point• Now that costs are increasing at the same  time as trade, margins suffer• Buying down price to retain v...
Tactic #1 – Change Measures• 74% of CPG companies still measure promotion  success by lift, and not profitability *• Above...
Tactic #2 – Innovate on Promotions• New product introductions are highly risky  and expensive• Consumers expect innovation...
Tactic #3 – Adopt a Culture of Change• CPG fears change therefore it rejects it• Think of trade as joint value, not a cost...
Tactic #4 – Promotion Rationalization• Just because you did it last year doesn’t  mean you should do it this year• Fewer l...
Tactic #5 – Adopt Centralized TPM• Nearly 60% of CPG firms still track trade  through Excel• Manual effort is staggering• ...
Trade Promotion ManagementHeadquarter PlanningAccount PlanningAccount ExecutionReconciliationPost Promotional Analysis
Conclusion• The status quo is potentially a road to disaster• Only shifts in metrics will change behavior and  process• In...
Q&A
Thank You       Rob Bois       617.418.1986       rbois@meicpg.com       www.meicpg.com
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Five ways to stop leaking revenue

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Five ways to stop leaking revenue

  1. 1. ATTENTION CPG MANUFACTURERS: FIVE WAYS YOU CAN STOP LEAKING REVENUE TO RETAILERS MEI Computer Technology Group Inc.
  2. 2. Webinar will start in 5 minutes Superior Trade Promotion Management can lead to a competitive advantage Source: Infosys
  3. 3. Webinar will start in 4 minutes 10-30% of revenue spent on trade promotions Source: AMR Research, Forrester & TPMA
  4. 4. Webinar will start in 3 minutes 30% of your sales force’s time is spent manually managing trade promotions Source: Infosys
  5. 5. Webinar will start in 2 minutes 65% of CPG Executives are feeling the pressure from retailers to provide insight and ideas to drive incremental sales. Source: AMR Research, Forrester & TPMA
  6. 6. Webinar will start in 1 minute 67% of the marketing budget is used towards trade promotion spending Source: Infosys
  7. 7. ATTENTION CPG MANUFACTURERS: FIVE WAYS YOU CAN STOP LEAKING REVENUE TO RETAILERS MEI Computer Technology Group Inc.
  8. 8. PresenterRob BoisDirector of Product MarketingMEI Computer Technology GroupModeratorAbby ChitesterDirector of MarketingMEI Computer Technology Group
  9. 9. Agenda• Introductions• Today’s Reality• Technology & Processes• TPM Performance Gaps• Disciplined Approach• Trade ROI• Questions
  10. 10. Who is MEI? Headquartered in Established in 1983 Montreal, CanadaClient base is made up Over 40 Employees with50 clients ranging from Offices throughout North $30M to $3B in sales America A leading developer of Offers a complete and proven trade promotion solution that enables consumer management software for packaged goods CPG the Consumer Packaged companies to successfully plan, Goods (CPG) industry execute and analyze all aspects of the trade promotion management cycle
  11. 11. The Growth of Store Brands• 35% of shoppers are trying store brands for the first time• Store brands cost 1/3 less than national brands• Retailers are rationalizing down to one or two national brands• Consumers believe store brand quality is at or near that of national brands
  12. 12. The New Shopper• Moving to store brands • Millennials• Stock outs = brand • Gen X swap • Gen Y• Less responsive to • Boomers advertising Less brand Fragmented loyal Higher Cost Expectations conscious• Expects high quality • Cutting coupons• Expects innovation • Shopping for deals• Fickle • Highly price sensitive
  13. 13. Rising Economy = Rising Costs Fuel Prices & COGS Retail Price Pressure
  14. 14. CPG’s Response:• Buy down price• Maintain share at any cost• Push volume over profitability• Shift dollars from advertising to trade
  15. 15. The Result Tier 2 and 3 brands can’t compete Deductions & Margins get post-audits eroded increase Retailers increase Promotion pressure for trade measures get dollars skewed Trade spending increases
  16. 16. The Tipping Point• Now that costs are increasing at the same time as trade, margins suffer• Buying down price to retain volumes becomes unprofitable• Innovation suffers• Trade spending gets out of control
  17. 17. Tactic #1 – Change Measures• 74% of CPG companies still measure promotion success by lift, and not profitability *• Above the line and below the line tactics are disconnected• The true cost of volume and share is not known• Track the true long-term effects of promotions• Consider that market share goals may actually erode margin goals* CGT Trade Promotion Effectiveness Survey 11/09
  18. 18. Tactic #2 – Innovate on Promotions• New product introductions are highly risky and expensive• Consumers expect innovation to come from national brands• Innovate on tactics, bundling, and cross- channel promotions• Give the perception of product innovation without the costs
  19. 19. Tactic #3 – Adopt a Culture of Change• CPG fears change therefore it rejects it• Think of trade as joint value, not a cost of doing business• Encourage creativity with promotions• Don’t settle for “we’ve always done it this way”
  20. 20. Tactic #4 – Promotion Rationalization• Just because you did it last year doesn’t mean you should do it this year• Fewer less complex promotions could yield similar or better results• Shifts in the overall marketing mix could produce significant results − What if we shifted 20% from trade to online advertising?• Shifts in regional of even banner/store mix can also pay large dividends
  21. 21. Tactic #5 – Adopt Centralized TPM• Nearly 60% of CPG firms still track trade through Excel• Manual effort is staggering• Central visibility is non-existent• Metrics can’t be tracked• History isn’t recorded• Copy-paste becomes the de facto promotion planning method
  22. 22. Trade Promotion ManagementHeadquarter PlanningAccount PlanningAccount ExecutionReconciliationPost Promotional Analysis
  23. 23. Conclusion• The status quo is potentially a road to disaster• Only shifts in metrics will change behavior and process• Inability to track and mange trade centrally is a show stopper• Don’t fall victim of retailer “entitlement”
  24. 24. Q&A
  25. 25. Thank You Rob Bois 617.418.1986 rbois@meicpg.com www.meicpg.com

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