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Promotion management in Recruitment

FMCG in 2011 Recruitment, an
integral part
Willing to 'work today for tomorrow's of your
turnover', manufacturers spend major marketing issues
budgets for promotional targets, but
Bierman's Quote
frequently results are out of pace with
investments.
Bluntly said: lots of money is spent, but nearly all promotional activities lose money.
Since October 2003, at the start of the price war by Albert Heijn, the scale of promotions
has increased dramaticaly, with pricing as central issue. Today's consumer buys from one
special offer to the next. And here is the onset of the spiral of misery.

Profit centre
Due to all the promotional volatility in Food and Drug, stock levels in retail grow
exponential. And subsequently, the manufacturer is asked to decrease these. Lots of sales
promotion -for instance in personal care- cost money twice. Who's kidding who?
And isn't the industry losing track at an alarming speed?
The most striking components are the depth of promotional discounts and the high cost
of flyers. Meanwhile, the flyer is making the retailer so much money that this medium in
itself has become an interestingprofit center for the retailer.

Fierce resistance
Manufacturers trying to reduce the discounts and the flyer costs that went wild, hit on
fierce resistance. Streetwise retailers have learned how to deal with this. They simply
threaten with sanctions. They now consider the profit on flyers as their lawful privilege or
as compensation for a disappointing trade margin.
This probably explains the interest in promo evaluation tools. But how exact and
purposeful are these tools? Are all relevant aspects observed?

Sales Promotion evaluation tools.

What is the resulting value of a specific sales promotion? Which element is successful
and what's more important, 'which element is ineffective'?
Historical numerical data about the effect of sales promotions in FMCG are no guarantee
for the success rate of subsequent promotions. One moment a promotion yields 500
display locations and a subsequent promotion doesn't even acquire half of these. Causes
are unclear. And what's remarkable: even retailers with all their quantitative scanning data
have great difficulties estimating the right promotional volumes. Even experienced
players in retail have their glitches in sales forecasting. Retail is a complicated line of
business.
But manufacturers have a world to win, just by observing the retailer's targets and
logistics with a critical eye.

The correct analysis. The proper knowledge. De right tools.

The success rate of a sales promotion in FMCG depends on many factors. Market
research agencies like Nielsen, GFK and IRI attempt to quantify variables but by doing
this they ignore the fact that qualitativeaspects determine the [quantitative] result
primarily.
For quantitatively oriented market research agencies it's simply impossible to incorporate
the many peripheral variables that are relevant in their research.
Considering the complex nature of quantitative research methods, especially complex
because it differs for every category in every single sales promotion, these methods are
gravely simplified. But by simplifying their research methods and the promo evaluation
tools, these agencies incorporate too many unknown factors in their result.

Pioneer stage
In sales and marketing organizations, sales promotion management is still in a pioneer
stage. Nothing is 'managed', nothing is verified and nothing at all is evaluated. Now
where's the concept of the 'learning organization'?
Bierman assists manufacturers to define their promotional strategies and to meet sales
promotion targets.
We have the relevant skills and technique at our disposal, enabling us to predict the
success rate or failure of an activity in sales promotion. And we can show how
corrections need to be made where necessary. No simulation but actual practice.

Pingpong session.
Call us for our interactive pingpong session: ''the sales promotion mix of the retailer'' and
we will show you the strategy of the [major] retailers in their approach of your market.
Or we can have a look at promotional logistics in your category.

The advice. The implementation

Bierman's consultancy doesn't stop at providing advice. Translating the findings into
practice and supporting Sales and Marketing are two of our core activitities. On request
and on behalf of manufacturers, we participate in sessions on head office level.

FMCG-nieuws "on line"

"Trends in Distribution and Food Marketing" is a publication by Bierman distributed
free of charge via e-mail. Our newsletters are based on information gathered by us during
our daily contacts with retailers. They are distributed to manufacturers in FMCG.
Publication is infrequent: only when there's something to report. Subscription is possible:
send an e-mail to josbierman@fmcg.nl with the text "free subscription" in the message
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