What is TPM & How does it Help Emerging Brands
To many, Trade Promotion Management (TPM) is tool used by sales teams in the Consumer Packaged Goods (CPG) industry. But if you strip away the tool, TPM is actually just good business practices that are used in the work done by sales teams and adjacent functions like Accounting, Finance, and Demand Planning.
So what is TPM if thought of a methodology? Our definition:
Trade promotion management is the combination of activities executed by CPG Sales teams and adjacent functions to plan and execute sales & “trade spending” – the expenses incurred to secure distribution, pricing, and promotion of their products at distributors & retailers.
These activities include:
- Annual planning & target setting
- Planning of tactical activities
- Execution of sales plans including:
- Approval of activities
- Application of pricing conditions (i.e. Off Invoice allowances)
- Delivery of sales estimates to Demand Planning
- Settlement of customer claims including check payments & deductions
- Analysis of business plans
- Pre and post analysis
- Macro and activity
How does it help? As a methodology, trade promotion management enables a CPG brand to know that they have good policies, processes, data, and controls in place for the sales function and trade spending expenses.
An important enabler of this is standardized, centralized, and synthesized information.
At inception, brands execute TPM manually with spreadsheets, & shared drives. As sales, distribution, promotions, and deductions grow, and more people are involved in the process, some predictable challenges emerge:
- Standardization, centralization, & synthesis that enables analysis becomes difficult & time consuming to scale, maintain
- Information become outdated quickly
- Assessing performance and re-forecasting becomes difficult
To overcome these challenges, CPG brands deploy TPM tools, like UpClear’s BluePlanner. Platform’s like BluePlanner are purpose-built to support the planning, execution, and analysis needs of fast-moving, highly-promoted CPG brands.