Executive Briefings

Too Much Talk About Trade-Promotion Optimization, Too Little Action to Make It Happen

Much of the technology buzz in the consumer products  industry today revolves around trade promotion optimization, or TPO. The press, business consultants and analyst firms continue to extol the potential virtues of optimization and predictive analytics tools, yet few clearly define what this means or more importantly what it requires to achieve success.

On the surface the promise of TPO, which is defined as the ability to predict which promotions will work and each will affect business results, can sound extremely compelling. However, the true usage of TPO, even among large enterprises, remains extremely limited. In fact, nearly 60 percent of CP companies are still relying primarily on Excel spreadsheets or other desktop tools to collect and harmonize data to calculate promotion effectiveness. If most aren't even using enterprise software for post-analysis, few are in a position to perform good pre-campaign predictive analysis and "what-if" scenarios. Further, market indicators have shown that the vast majority of manufacturers still have a long way to go to get there.

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Much of the technology buzz in the consumer products  industry today revolves around trade promotion optimization, or TPO. The press, business consultants and analyst firms continue to extol the potential virtues of optimization and predictive analytics tools, yet few clearly define what this means or more importantly what it requires to achieve success.

On the surface the promise of TPO, which is defined as the ability to predict which promotions will work and each will affect business results, can sound extremely compelling. However, the true usage of TPO, even among large enterprises, remains extremely limited. In fact, nearly 60 percent of CP companies are still relying primarily on Excel spreadsheets or other desktop tools to collect and harmonize data to calculate promotion effectiveness. If most aren't even using enterprise software for post-analysis, few are in a position to perform good pre-campaign predictive analysis and "what-if" scenarios. Further, market indicators have shown that the vast majority of manufacturers still have a long way to go to get there.

Read Full Article