Booz & Company recently conducted the bi-annual refresh of its Customer Planning and Trade Spend study, surveying an extensive set of firms across several sectors in the consumer packaged goods (CPG) space. The survey asked questions about trade spending, customer planning and how trade agendas affect sales. The results indicate that a majority of the companies believe they spend too many resources on trade management and are unhappy with the quality of the tools/systems available to manage investments. Interestingly, even the companies identified as leaders have the potential to significantly improve their trade-to-sales ratios through building out their capabilities.
On November 21, 2013, during a CGT web seminar, Booz & Company reviewed the findings alongside panelists from Kimberly-Clark, Kraft Foods and McCormick & Company, who discussed common pain points in the areas of customer planning and trade investment management, strategies to increase the effectiveness of investments, common frustrations associated with customer planning, best practices that define the leaders, and where companies are investing in IT systems and tools related to trade management.
Steven Treppo, officer at Booz & Company, kicked things off by revealing that “dissatisfaction levels remain high across many areas of customer planning and trade spend management,” citing that 85 percent of respondents felt that current spending is inappropriately high for the long-term health of their business. “Overall trade spend levels are constant with 2010 but remain significantly higher than 2008,” he added. When it comes to funding allocation, structure design continues to be a key focus area. Other findings include:
-Some companies are increasing their attention to the base business; most are focusing planning on promotion and merchandising. “Just 35 percent of respondents develop plans with systematic assessment of base growth levers for majority of accounts,” he said.
-The customer planning and trade management ecosystem encompasses different systems and tools that require integration. “Over two-thirds of respondents indicated usability and lack of integration across tools as a key focus area for the future.”
-Many companies have implemented execution systems and are now looking to enhance their planning capabilities.
Treppo closed, “Achieving excellence in trade promotions is a journey and companies are in different stages.”
Craig Nowokunski, vice president North American Customer Development for Kimberly-Clark, Brian Giroux, vice president Sales, Beverages for Kraft Foods and Scott Bolonda, vice president and GM of US Consumer Product Division Sales and Marketing for McCormick & Company, next shared real-world examples to support the findings from the study.