Best practices in trade promotion
There’s a good post here at SupplyChainer.com citing new Aberdeen research on best practices in trade promotion. This caught my eye because promotions are one of the biggest sources of demand volatility that companies face. According to Aberdeen, the current state of the trade promotion management is not satisfactory and 75% of the companies are having problems with their systems.
Promotions represent a significant demand management challenge…and opportunity. Companies that can successfully execute promotions and rapidly respond to the changes that come out of a promotion (good and bad) are going to be at a competitive advantage compared to the market.
A well thought out plan is a requirement before launching a promotion, one that ties together all aspects of the business. But a thorough plan supported by strong execution capabilities isn’t enough. The reality today more than ever is that you can’t plan your customers, so you have to be able to manage at the moment and deal with whatever realities come your way. Customers may not react to the promotion in the way you expected - leaving you with the potential for excess inventory. Or, demand may exceed supply. Or, just as likely, demand for the blue product may outpace that of the red product (this week, but next week that could change too).
If you’re like most companies, you scramble to cope with these situations. Empowering people to respond to change is the key to automating this critical process and ensuring that you optimize customer satisfaction and operating performance.
