Trade promotion management (TPM) is a set of processes and tools that allow a company to manage trade promotions. A trade promotion is a marketing campaign directed at wholesalers and/or retailers instead of to the end users of a product or service. For example, a wholesaler/retailer may receive a special price or discount for a product or product group for a specific period in addition to allowances they may have already negotiated.

Throughout the years, Southeast Computer Solutions has worked with clients in implementing and integrating trade promotion management tools. For one client, we built a TPM solution with Sage 100. Another client was using a third party TPM solution that sits on top of Salesforce.com. We've integrated the third-party solution with Sage Enterprise Management, and lastly, we've been able to configure Sage Enterprise Management (Sage X3) to handle many aspects of the TPM process using Sage Enterprise Management out-of-the-box functionality.

In this blog series, we'll discuss each of these implementations in detail. We'll start by discussing general TPM features to lay the foundation for the implementations we've done.

TPM may include features or functionality to address some or all of these business needs:

Volume Forecasting

Defines what kind of lift in the normal run rate of a product or group of products is expected due to a promotion.

Financial Forecasting

Defines the financial impact that's expected due to a promotion.

Trade Spending Budget

Defines a budget for trade promotions and then applies promotions against the budget to ensure that the organization is working within set boundaries.

Deduction Process

Ensures that the promotion parameters are captured, reviewed, approved, and implemented so the business system can properly invoice a customer and ensure proper revenue recognition.

Settlement Process

This process is a reconciliation of what the customer paid for versus what they were entitled to based on the promotion. A customer won't pay what they're invoiced if they've negotiated allowances. The settlement process may include capturing the payment and having a review/approval process that allows a customer to argue when they disagree with the allowances taken.

These are the general features, functions, and processes a customer needs to successfully manage trade promotions.

In the next submission, we'll discuss what Southeast Computer Solutions did for a Sage 100 client. For more information about trade promotion management, please contact us.