Maximising trade investment returns
Increase margins through effective planning, execution and measurement of trade investments
Industries such as Consumer Packaged Goods (CPG) and Fast Moving Consumer Goods (FMCG), have enhanced their customer and branding strategies with trade promotions. As a source of sales uplift, market penetration and greater customer loyalty, trade promotions can offer potentially rich rewards. However, forecasting trade spend to maximise ROI is a challenging and data intensive task involving complex variables such as base-line volume and multiple sources of POS data.
Without effective planning capabilities, based on accurate source data and complex modelling variants, the risks can negatively affect margins and profitability.
In order to benefit from capacity planning (CP), organisations should be:
- Setting KPIs: Many planning implementations lack any way to analyse ROI and maximise the value of key strategic investments like advertising and promotions (A&P) costs. Best practice CP starts with the setting of market priorities and accurate targets as key performance indicators (KPIs) rather than simply focusing on bottom-up planning.
- Evaluating financial returns: Businesses are coming under increased pressure to demonstrate the value of any return on trade investments. But planning and executing top-down or bottom-up commercial plans without financial evaluation can severely impact the ability to measure profitability.
- Developing 'what if' scenarios: The best-laid plans can be subject to unpredictable change, yet some planning implementations do not offer the flexibility to model 'what if' scenarios. This can leave businesses vulnerable to vagaries of external market forces and rapidly changing customer demand.
- Meeting inventory demand: Many planning implementations lack the ability to enable the effective stock and inventory level management. Without this, customer expectations cannot be met, harming loyalty and retention levels, as well as negatively impacting brand value and share price.
The business benefits of proactively maximising trade investments returns can be fed back into the business to support better strategic execution and develop more successful trade investment programmes that build brand, customer retention and profitability.
Business benefits
- Meet business targets: Effective promotional planning ensures that budgets can be accurately matched to spending. This is important for making the most of investments and accurately determining ROI.
- Ensure profitability: Analyse promotional effectiveness by account, brand and other criteria to properly evaluate the success of a promotions strategy. This eliminates any element of trial and error and builds repeatable processes based on best practice for success.
- Increase forecasting accuracy: Speed time to market, quickly identify opportunities to maximise future growth and respond to changing business requirements through the rapid development of contingency plans.
- Integrated supply chain: Match supply to promotional demand through the efficient management of inventory and service levels. A finely tuned and integrated supply chain view can help maintain brand value and capitalise quickly on opportunities for growth.
Bluefin Solutions can:
- Provide insight into understanding how SAP Commercial Planning can have significant benefits across your organisation.
- Evaluate a strategy for building a business case and roadmap for the implementation of SAP Commercial Planning.
- Help evaluate which SAP Planning tool is right for your Commercial Planning requirements.
- Support the technical delivery of your SAP Commercial Planning solution.
SAP planning technology solutions
SAP Business Planning and Simulation (BPS), SAP Integrated Planning (IP), and SAP BusinessObjects Business Planning and Consolidation (BPC).