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    Promotion Management in FMCG in 2011: This Page Is Also Available in Dutch

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    Guru Raja
    This document discusses promotional management challenges in the fast moving consumer goods (FMCG) industry in 2011. It notes that while manufacturers spend major budgets on promotions, the results often do not justify the investments. Retailers have also increased the scale and costs of promotions, with pricing as the central issue. Manufacturers trying to reduce promotional discounts and costs face resistance from retailers, who now view profits from promotions as their right. The success of promotions depends on many qualitative factors that are difficult for market research agencies to incorporate into their quantitative evaluation tools. Sales promotion management in many organizations remains in a pioneer stage with little management, verification, or evaluation of strategies and results.

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    Promotion Management in FMCG in 2011: This Page Is Also Available in Dutch

    Uploaded by

    Guru Raja
    25 views3 pages
    This document discusses promotional management challenges in the fast moving consumer goods (FMCG) industry in 2011. It notes that while manufacturers spend major budgets on promotions, the results often do not justify the investments. Retailers have also increased the scale and costs of promotions, with pricing as the central issue. Manufacturers trying to reduce promotional discounts and costs face resistance from retailers, who now view profits from promotions as their right. The success of promotions depends on many qualitative factors that are difficult for market research agencies to incorporate into their quantitative evaluation tools. Sales promotion management in many organizations remains in a pioneer stage with little management, verification, or evaluation of strategies and results.

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    This document discusses promotional management challenges in the fast moving consumer goods (FMCG) industry in 2011. It notes that while manufacturers spend major budgets on promotions, the results often do not justify the investments. Retailers have also increased the scale and costs of promotions, with pricing as the central issue. Manufacturers trying to reduce promotional discounts and costs face resistance from retailers, who now view profits from promotions as their right. The success of promotions depends on many qualitative factors that are difficult for market research agencies to incorporate into their quantitative evaluation tools. Sales promotion management in many organizations remains in a pioneer stage with little management, verification, or evaluation of strategies and results.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    25 views3 pages

    Promotion Management in FMCG in 2011: This Page Is Also Available in Dutch

    Uploaded by

    Guru Raja
    This document discusses promotional management challenges in the fast moving consumer goods (FMCG) industry in 2011. It notes that while manufacturers spend major budgets on promotions, the results often do not justify the investments. Retailers have also increased the scale and costs of promotions, with pricing as the central issue. Manufacturers trying to reduce promotional discounts and costs face resistance from retailers, who now view profits from promotions as their right. The success of promotions depends on many qualitative factors that are difficult for market research agencies to incorporate into their quantitative evaluation tools. Sales promotion management in many organizations remains in a pioneer stage with little management, verification, or evaluation of strategies and results.

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    This page is also available in Dutch

    Promotion management in Recruitment


    FMCG in 2011 Recruitment, an
    integral part
    Willing to 'work today for tomorrow's of your
    turnover', manufacturers spend major marketing issues
    budgets for promotional targets, but
    Bierman's Quote
    frequently results are out of pace with
    investments.
    Bluntly said: lots of money is spent, but nearly all promotional activities lose money.
    Since October 2003, at the start of the price war by Albert Heijn, the scale of promotions
    has increased dramaticaly, with pricing as central issue. Today's consumer buys from one
    special offer to the next. And here is the onset of the spiral of misery.

    Profit centre
    Due to all the promotional volatility in Food and Drug, stock levels in retail grow
    exponential. And subsequently, the manufacturer is asked to decrease these. Lots of sales
    promotion -for instance in personal care- cost money twice. Who's kidding who?
    And isn't the industry losing track at an alarming speed?
    The most striking components are the depth of promotional discounts and the high cost
    of flyers. Meanwhile, the flyer is making the retailer so much money that this medium in
    itself has become an interestingprofit center for the retailer.

    Fierce resistance
    Manufacturers trying to reduce the discounts and the flyer costs that went wild, hit on
    fierce resistance. Streetwise retailers have learned how to deal with this. They simply
    threaten with sanctions. They now consider the profit on flyers as their lawful privilege or
    as compensation for a disappointing trade margin.
    This probably explains the interest in promo evaluation tools. But how exact and
    purposeful are these tools? Are all relevant aspects observed?

    Sales Promotion evaluation tools.


    What is the resulting value of a specific sales promotion? Which element is successful
    and what's more important, 'which element is ineffective'?
    Historical numerical data about the effect of sales promotions in FMCG are no guarantee
    for the success rate of subsequent promotions. One moment a promotion yields 500
    display locations and a subsequent promotion doesn't even acquire half of these. Causes
    are unclear. And what's remarkable: even retailers with all their quantitative scanning data
    have great difficulties estimating the right promotional volumes. Even experienced
    players in retail have their glitches in sales forecasting. Retail is a complicated line of
    business.
    But manufacturers have a world to win, just by observing the retailer's targets and
    logistics with a critical eye.

    The correct analysis. The proper knowledge. De right tools.


    The success rate of a sales promotion in FMCG depends on many factors. Market
    research agencies like Nielsen, GFK and IRI attempt to quantify variables but by doing
    this they ignore the fact that qualitativeaspects determine the [quantitative] result
    primarily.
    For quantitatively oriented market research agencies it's simply impossible to incorporate
    the many peripheral variables that are relevant in their research.
    Considering the complex nature of quantitative research methods, especially complex
    because it differs for every category in every single sales promotion, these methods are
    gravely simplified. But by simplifying their research methods and the promo evaluation
    tools, these agencies incorporate too many unknown factors in their result.

    Pioneer stage
    In sales and marketing organizations, sales promotion management is still in a pioneer
    stage. Nothing is 'managed', nothing is verified and nothing at all is evaluated. Now
    where's the concept of the 'learning organization'?
    Bierman assists manufacturers to define their promotional strategies and to meet sales
    promotion targets.
    We have the relevant skills and technique at our disposal, enabling us to predict the
    success rate or failure of an activity in sales promotion. And we can show how
    corrections need to be made where necessary. No simulation but actual practice.

    Pingpong session.
    Call us for our interactive pingpong session: ''the sales promotion mix of the retailer'' and
    we will show you the strategy of the [major] retailers in their approach of your market.
    Or we can have a look at promotional logistics in your category.

    The advice. The implementation


    Bierman's consultancy doesn't stop at providing advice. Translating the findings into
    practice and supporting Sales and Marketing are two of our core activitities. On request
    and on behalf of manufacturers, we participate in sessions on head office level.

    FMCG-nieuws "on line"


    "Trends in Distribution and Food Marketing" is a publication by Bierman distributed
    free of charge via e-mail. Our newsletters are based on information gathered by us during
    our daily contacts with retailers. They are distributed to manufacturers in FMCG.
    Publication is infrequent: only when there's something to report. Subscription is possible:
    send an e-mail to [email protected] with the text "free subscription" in the message
    header or message body.

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