Sir; It seems that hardly a day goes by without news of another large retailer turning up the pressure on suppliers (‘Multiples ‘rip up’ the code’, The Grocer, February 5, p4). Sainsbury has recently extended its payment terms; Tesco plans to introduce e-auction for certain branded items. How can consumer goods manufacturers retain a healthy bottom line?
One of the likeliest areas for improvement - and one dear to every retailer’s heart - is the trade promotions budget.
It is a chilling fact that more than half a food company’s total marketing budget may be spent on trade promotions, the majority of which are likely to be unprofitable. In the current climate, retailers are unlikely to accept any diminution of trade funding: quite the contrary. So the need for control systems to manage the process and to measure its true effectiveness has never been more urgent.
Suppliers who invest in Trade Promotions Management (TPM) quickly discover what a huge difference it makes to the bottom line. TPM helps brand manufacturers to rise to the challenges thrown down by their retail trading partners. By reducing the waste associated with most trade promotions, suppliers are able to lower their costs and improve their profit, and satisfy customers.