Client: Leading South American brewer
Industry: Consumer Packaged Goods
Business need addressed: The equivalent of $1 out of every $3 sales dollars was being deployed in support of less-than-optimally managed trade promotions.
Genpact solution: We introduced an app that lets all field sales and HQ marketing staff plan, track, evaluate, and settle payment for in-store and retailer ad promotions, and for other opportunities to feature and display client products
Business impact: Projected three-fold return in first year as a result of better control over promotion program expenses
For Consumer Packaged Goods (CPG) companies, trade-promotion strategy, planning, and execution with retailers are extremely important. At the same time, such companies face extraordinary margin pressure. This means that CPG companies cannot afford to waste even a fraction of the sizable sums they must regularly commit to promotions. For example, for the leading South American brewer/beverage maker we were helping, approximately US$10 billion was going to trade promotion and related program-management annually – and the company knew that there was room for improvement.
With cyclical downturns in several major South American markets creating more margin pressure, the company knew it had to get a tighter handle over the process if it was to acquire a better understanding of where promotional funds are spent and what impact spending has on sales volume.
Working with us to identify leaks, the client confirmed that planning, spend-reconciliation, and the evaluation of trade promotions were all being done using a disparate mix of spreadsheets and manual SAP uploads and downloads. This led company management to conclude that substantial benefits were to be had by replacing current ad-hoc planning, tracking, approval, and evaluation practices with a common process and application platform.
At first glance, the solution seemed to be as easy as it was obvious: a software application was needed to plan, budget, and track the cost/ benefit of promotional activities. Unfortunately, none of the off-the-shelf apps available proved to be a good fit for how the company conducted its business. To fill that void, the client decided to create its own app and made us a pivotal partner in the development process.
After closely assessing the actions of field sales and corporate marketing stakeholders, our reengineers began mapping out both “as is” and “to be” processes. Third-party software coding relied on our functional design specifications and ongoing consultations. Resulting app sub-modules included volume planning, account promotion planning, price planning, activity dashboards, account P&Ls, and the integration of trade-payment information within merchandizers’ smartphones. We also supported change management during pilot implementation, key-user training, and initial rollout.
Business impact delivered
The application is now fully functional. Benefits include better ROI, field people cost savings, more compliance, and better management visibility.