The study also reveals that CPG companies have changed their trade promotion investments since the start of the economic downturn in 2008. According to the study, 71% of CPG companies have increased their trade promotion spending in response to the economic downturn in 2008, 23% more than once. 27% of executives participating in the study believe their return on investment (ROI) has increased by more than a quarter since the downturn, while 16% believe that their ROI has declined.
53% believe their company’s trade promotion performance is good, but could be improved. However, 28% believe it to be either “totally ineffective” or in need of significant improvement, and only 19% view their trade promotion performance as industry leading.
Ed Stark, a managing director in Accenture’s Consumer Goods & Services practice, says “... the right approach to trade promotions is to blend... technology with talent... and make better use of predictive analytics... (however) the heroic efforts of individuals in CPG companies... hide many of the failings of their trade promotion efforts... and the successes achieved often occur in spite of, not because of, the tools, talent and processes at their disposal... ”
65% of the executives identify the establishment of more cost effective processes as a key method of improving their trade promotions performance. 57% say they prefer to contract for outsourced talent in the promotions area rather than hiring talent directly. And, 29% indicate both a need for greater flexibility in resourcing, and a difficulty in attracting the right caliber of talent.
54% of respondents view predictive analytics as important or very important for companies seeking improvements in performance, and 56% rated predictive analytics as being very desirable, or the most desirable way, for their company to improve its trade promotion efforts. However, 24% believe predictive analytics has limited importance.
Alex Kushnir, a managing director in Accenture’s Consumer Goods & Services practice, concludes that “... companies are not making the most of the data that their technology investments have generated... more worrisome, a large proportion of survey respondents do not trust the data... “
Other key findings from the study included;
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