SOURCE: Aberdeen Group

August 13, 2008 10:00 ET

Legacy and Home-Grown Trade Planning Stall Trade Marketing ROI

65% of Manufacturers Lack Collaborative Tools That Aid Visibility Towards Retail Execution

BOSTON, MA--(Marketwire - August 13, 2008) - Aberdeen, a Harte-Hanks Company (NYSE: HHS), surveyed more than 100 enterprises in July 2008 to determine the extent of coordination required between manufacturers and retailers towards building cogent and coherent trade promotion management (TPM) processes. The research revealed 65% of manufacturers currently use a combination of legacy trade promotion systems and home-grown trade marketing processes that lack collaborative tools or customer analytics related feature/functionality for using shopper insights to develop optimized trade promotions. These collaborative data sharing, planning and execution-related analytical tools enable visibility towards shelf-level promotion product display, shopper marketing insights, and sales performance data in varied retail segments such as grocery, specialty or general merchandise.

"Aberdeen's research shows point of sale (POS) transaction data from retail locations is still a hurdle for 66% of manufacturers. The low levels of transaction data sharing cause increased complexities in tracking promotion effectiveness at the store or field level," says Sahir Anand, senior analyst and co-author of the Responsive Trade Promotion Management benchmark report. These retail-level tribulations mean that sales and marketing departments at manufacturing companies are currently using: 1) assumption-based forecasts, 2) repetitive planning of promotions, and 3) reactive approach toward controlling cost of promotions, which is currently impacting 63% of companies.

According to Nari Viswanathan, Research Director and co-author of the report, "Best-in-Class companies have reformed their assumption-based traditional approach to trade promotion management by infusing more precision in the planned promotions through real-time data and targeted segmentation. These companies have improved their forecast accuracy and controlled trade spending by centralizing the enterprise usage of product, customer, and location data."

Overall, Aberdeen data indicates that the TPM process landscape is fragmented. There are significant variations of IT solutions that are present in companies. Spreadsheet use and assumption-based forecasts are rampant amongst two-thirds of manufacturers surveyed. Trade promotion excellence is not about reducing the amount of spend but primarily about improving its efficiency. "Sixty-five (65%) of Best-in-Class and 75% of all others do not have executive mandate for trade promotion staff to integrate planning, execution and effectiveness analysis. Hence, the biggest challenge facing the CPG industry is getting senior leadership to shift its thinking in this regard and to view TPM as a cross functional marketing platform not a stand-alone sales tool," says Sahir Anand (Co-Author of report, Senior Research Analyst, Retail & CPG practice within Aberdeen)

A complimentary copy of this report is made available due in part by the following underwriters: Adesso, Kineticsware, Business Objects, and SAP. To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=5230.

To access all of Aberdeen's complimentary research please visit http://research.aberdeen.com

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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