The phrase “Trade Promotion Management” means different things to different organizations, and the results on this year’s list support that theory. In a Q&A with Gartner Research Managing Vice President Dale Hagemeyer, he commented that larger consumer goods (CG) companies are typically more evolved and are pursuing optimization, or TPO. That means investment in Oracle, CAS, DemandTec or M-Factor. Meanwhile, smaller companies are pursuing TPM as capabilities become more mature and are delivered in lower cost formats. That means MEI, Synectics and Adesso Solutions made the list.
CGT: As the economy improves little by little, is activity in this market picking up?
Hagemeyer: I have seen a big uptick in interest in TPM since June 2010. Companies got tired of fretting about the economy and got to work on getting better control of trade spending. I find this pragmatic attitude to still be the case today.
CGT: What trends in this area are worth exploring? Which ones may be hype?
Hagemeyer: Key trends include continued interest in Software-as-a-Service delivery, analytics and usability, and optimization. I think these trends continue to be worthwhile into the future.
I’m particularly bullish on TPO. There is just too much complexity in the promotions for an account manager to understand what an outcome will be or how to optimize it. Many don’t even have a level of data integration to be able to tell whether a promotion broke even or actually made money, so there are steps like data integration that are critical before TPO can really become valuable.
There are more references of TPO than last year, showing that when times got tough(er) companies showed real commitment to focusing on promotional outcomes. At the same time, there hasn’t been much focus on anything really superfluous because tough times tend to weed that out quickly.
In the future I see greater integration of downstream data into TPM/TPO processes to be worth pursuing. This will take advantage of more recent data and allow for compliance monitoring in more real time.
Customer Experience: DemandTec
DemandTec connects consumer products companies and retailers, providing common tools to transact, interact, and collaborate on merchandising and marketing activities. DemandTec customers, including ConAgra Foods and General Mills, have collaborated on nearly four million trade deals.
SMB Market: Oracle
“Promotion follow-up requires very precise analysis of numerous parameters and a mastery of the costs comprising a single lot. We could not precisely analyze the profitability of these activities without the granularity provided by Oracle’s Hyperion Essbase! ”
– André Guthleben, Financial Controller, Categay Innovation Center, Cadbury Europe (August 2010)