A recent survey of more than 1,000 CPG businesses within Australia shows that 78% of companies believe their pricing decisions could be improved.
The first stage for many organisations is realising that you may be at the “birth” stage, where there is disparate planning and reporting cycles, demand & financial forecasts and a lack of overall governance. As an organisation moves up the cycle, this means typically systemising promotion planning, trade spend management, then pivoting into more sophisticated pricing and promotional analytics. If we were to aggregate the learnings that we have from different types of organisations across the consumer goods sector, we would typically see the four following demonstrable benefit areas in moving to a TPM system:
1
Improved revenues, margins and cashflow – at times, up to a 10% saving in trade spend investments over a 2-3 year period.
2
Improved forecast accuracy – up to 15-20% improvement in forecast accuracy driving cashflow, working capital improvements and better inventory management through significantly reduced over-stocking in trade
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