Optimizing the Trade Plan with Applied Science
Note: I produced this product demo overview for DemandTec, my employer, to help show off some cool capabilities for the Trade Planning & Optimization software service. The movie runs ~2.5 minutes and has a pretty cool audio overlay…so turn those speakers up!
Consumer products manufacturers are under pressure to drive more volume — and profitable volume — without increasing the trade promotion budget. Problem is, most trade promotions don’t deliver economic value for the manufacturer nor do they drive an increase in category performance for the retailer. Selling in a bad plan like this to the retail trade is tough at best.
What to do?
Isolate plans that drive profitable volume for you, the manufacturer, and also hit key category performance objectives for your retail customer. Sounds easy, but doing this requires a quantified understanding of category behavior — including every item in the category — so that you can simulate events before they occur and isolate the good ones from the bad ones. Predictive software from DemandTec and others do just this, and help customer-facing sales teams develop win-win trade promotion events and entire category plans.
Some of the biggest CPG companies are using capabilities like this today, paving the way for a step change in how the industry goes to market.
Good stuff with that demo piece. You demonstrate the hardest part of the TPM process. the bottom up planning and execution. Do you guys also support the top down plans. For instance, CEO says we need to do +5% vs. LY, each Brand is tasked with a similar number (+/- depending on trends) and then each customer is given a Plan number to reach…the starting point where your demo picks up.
Thanks for the comments, Mark. To answer your question, the TPO software service is used by both headquarters and field sales teams today for a variety of use cases, with the focus being to drive innovation in bottom-up account sales planning. There are clearly the top-down simulation use cases like you describe where DemandTec adds value – both for the HQ planner that is establishing the guidlines and the field sales user that is tasked with building a plan.