Trade promotion management: A missing opportunity?
If you read Linda Tucci’s recent story on the efforts of Tasty Baking Co. to find a workable solution for trade promotion management, you may have been struck, as I was, about why TPM can be such a challenge.
After all, most of the biggest retailers in the world practice some sort of trade promotion management, either via vendor or home-grown solutions. Yet there seems to be a lack of effective software tools for optimizing retail partner relationships, as well as few standards to rally around.
TPM is not a new concept either, but even a top analyst covering the field, Gartner’s Dale Hagemeyer, has not found significant movement in the field since his most recent report, “Seven Key Considerations When Choosing a TPM Solution.”
Yet Tasty’s CIO, Chan Kang, is faced with real issues as he seeks to work TPM into his tightening budget. Though the company’s direct store delivery model produces quality data, “What we don’t do enough is measure the effectiveness of those promotions: how much lift, what is the baseline, the incremental profit — in other words, whether it was a good idea,” Kang said.
Kang is evaluating vendors, but even though industry groups like Trade Promotion Management Associates and the Vendor Compliance Federation are working to promote solutions for TPM, Tasty could be still confronted by vendor lock-in and integration issues with whatever solution it integrates.
Some observers are skeptical that TPM standards can be achieved, but this is one area that seems like a no-brainer for the Oracles and SAPs of the world to come together for the common good. Such cooperation could only help to increase the bottom line — for everybody.