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Author's profile photo Mark Osborn

Trade Promotion Optimization in Consumer Products: The New Reality

The promise of trade promotion optimization has been top of mind for sales and marketing teams in the Consumer Products (CP) industry for years.  Yet the promise of trade promotion optimization – predicting promotion outcomes, building sustainable baseline volume increases, focusing spend on the most effective promotions, and maximizing revenue, volume and profitability for CP companies and their retailer partners – has yet to be realized for most companies.

Technical Feasibility versus Practical Reality

Technology advances over the last few years have finally made the mechanics of trade promotion optimization not only possible, but feasible.  Advances in in-memory computing have dramatically simplified data structures while enabling real-time data access, customer and consumer data is plentiful and readily available, advanced analytics solutions for modeling and optimization have moved into mainstream business intelligence, and flexible, simple user interfaces accelerate user adoption.

Yet feasibility enabled by technology still hasn’t always translated into a practical reality.  So, if technology is no longer a barrier, and the promise of trade promotion optimization remains a high priority for CP companies, what barriers do remain?  One might argue it’s the mechanics of trade promotion optimization itself – the data science talent required to develop and maintain models to optimize promotions, the ongoing challenges associated with harmonizing and normalizing massive volumes of high velocity, highly granular data, and the significant coordination required between sales and marketing teams running the optimization models and the IT teams managing the underlying data and systems infrastructures supporting the optimization processes.

A New Services-Based Approach

To help address these challenges, SAP is offering a new services-based approach to Trade Promotion Optimization that promises a new, and practical, reality for CP companies of any size.  SAP Promotion Sensing and Optimization is a bundled offering that includes the SAP Trade Promotion Optimization solution running with the SAP Demand Signal Management solution powered by the SAP HANA Platform.  Hosted by SAP via the SAP HANA Enterprise Cloud, the subscription-based offering includes data upload, cleansing and mapping services for integrating and harmonizing internal and external data sources along with consulting services for building optimization models as well as providing ongoing, value-add analyses of promotion effectiveness including volume decomposition and price elasticity.

See the Solution Live at SAPPHIRE NOW

To learn more, visit the Consumer Products area of the Consumer Industries Campus at SAPPHIRENOW.  SAP will feature demonstrations of this new offering in the Consumer Industries Campus in the demo theater area on Wednesday afternoon May 6th and again on Thursday afternoon May 7th.

And, for more information on this and other valuable Consumer Products topics check out the Consumer Products Sample Agenda and the SAPPHIRENOW and ASUG Agenda Builder online.  We look forward to seeing you in Orlando!


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