What is the best practice in promotion management? (1)

Filed in archive Research on October 3, 2007

Trade Promotions Planning is one of those things which they call it CRUCIAL in retail industry and it has always been a struggle for supply chain managers because if not managed in a good way, will create a mess in inventory levels.

Because of such issues, Aberdeen Group recently conducted a research to find out what Best-in-Class companies do in the area of trade promotion management. In this post and another one later this week, I try to provide a brief summary of their report.


According to Aberdeen, the current state of the trade promotion management is not satisfactory and 75% of the companies are having problems with their systems. On the other hand, companies are aware that if they can manage this task, they would be able to achieve a higher category profit, higher forecast accuracy, and reduced trade overspends.

Aberdeen also noticed that there are a number of factors which cause Best Practice companies to be able to manage their systems in a better way. To mention some of the important ones:

- Leading companies use POS (Point Of Sales) data as a base for their plans
- They also use cross functional teams from finance, marketing, planning, etc. to come up with their plans.
- They try to analyze the historical demand data at the retail level (specially in presence of promotions).
- They also try to use different means to achieve visibility in supply chain