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Author: Nick Marr

How to Combat Price Erosion with The Help of TPM

Trade spend efficiency percentage gains are no longer the big goal for major FMCG companies. Most of them have pretty mature trade promotional optimization (TPO) programmes in place to enhance and improve their trade promotions, but once you have that under control, where do you go next? How do you shift these programmes from one-off exercises to long term sustainable profit growth?

The global consumer goods industry has gone through a number of very distinct periods of fundamental change over the past few decades, each with a very distinct revenue management challenge associated:

  •        The breaking down of borders across Eastern EU resulted in many new growth markets, becoming instantly accessible for expansion of big well known western brands
  •        BRIC country market growth provided the next big opportunity for global consumer goods firms
  •        And in more recent years mass CPG brand consolidation has become a trend, as many organisations began searching out routes to enhanced margin through the right portfolio mix and efficiencies across their businesses

The current period is one of managing global price erosion. An infinite stream of 'me too' brands taking up any spare production capacity are making significant inroads to markets, taking advantage of less brand-loyal consumers. They leverage clever marketing campaigns and new routes to market. Never has price comparison been so visible to so many shoppers at the point of purchase, which, along with the breadth of choice, has been a key reason for mass price erosion. 

Investments in digital transformation is no longer the only thing needed to provide statistical and financial analysis of trade spend decisions now and in the future: these programmes need to help to find a real solution to the question "How do I pragmatically and sustainably raise my consumer price and brand equity?"

Technology must not just be focused on telling people the price they need to sell to sell goods at in order to make money - the programmes used to achieve this must also include ways that help businesses that price strategy to market and apply it successfully.

Which is where Prometric steps in. A trade promotions management and optimisation tool, it can help your business to find and take advantage of which areas you can successfully reform your pricing strategy in. It can allow you to make an informed decision that will yield results quickly and pragmatically. In a world where data is king, Prometric can help you to find the best ways in which to sustain long term profit growth.

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