A study by Nielsen indicates that the consumer goods companies across the globe have doubled the amount of money they spend on trade promotions, and today about $1 trillion is spent annually on trade promotions by them. Trade Promotions such as coupons, bulk deals, and others help businesses get their products onto store shelves for a better consumer mind share, convert non-buyers to consumers, encourage repeat purchases, and make the brand stand out.

But, budgets are not bottomless, and without a formal trade promotion management framework to plan, analyze and predict the performance of promotions, you slash prices but erode your profit margins. With the right promotional tactics and recommendations, your business can ace promotions for an improved topline and the bottom line.

In this blog, we will be discussing some of the best practices a CPG company can implement in its Trade promotion practices for better success.

Is Your Trade Promotion Thinking Keeping Pace With How the Market Has Changed?

Consumer goods companies may still have the traditional thinking on trade promotions management, leading to a wrong idea of success. Tracking unimportant metrics or incorrect measurement of promotional sales leads to poor performance and reduced ROI.

The trade promotions management model can be highly complicated, and by breaking it down into Trade promotion management (TPM) and Trade promotion optimization (TPO), you are over-simplifying the process.

Take a closer look at how things are currently, and maybe you would want to go from implementation to measurement of trade promotions and then to best practices, planning, and optimization. This approach will help you test promotions thoroughly for better success.

Are You Measuring the Metrics That Actually Reflect Promotional Impact?

Most consumer goods companies focus on retail dollars or shipment dollars for measurement and try to equalize product volumes across. This approach fails when you have products of varying measuring units like beverages measured in cases and candies in pounds.

Convert these metrics into easily comparable ones across products. You may also want to measure your promotions by the incremental sales generated to help you estimate the impact on business without a particular promotion in place.

What metrics to choose depends on your business processes, but make sure that those do help you analyze promotions holistically.

Are You Choosing Promotional Mechanics That Actually Work for Your Brand and Price Point?

You may be envying new promotions that your competitor is running like Buy One Get One Free, Get 50, Bonus Packs, but are they successful? You may have interesting displays in stores, but without the price discounts, they don’t work. BOGO (Buy One Get One) helps lift the sales, but if your products are at a higher price point, you will need a percent off. Consumers are intelligent enough to let some promotions pass by. So you would be better off with fewer promotions but deeper ones. Choose what works best for your business.

The practical implication is that fewer, deeper promotions — mechanics that are specifically chosen for the price point, consumer profile, and competitive context of each SKU — consistently outperform a high-frequency promotional calendar of shallow discounts and tactical mechanics. Consumers are sufficiently price-aware to evaluate promotional value accurately, and promotions that do not meet their implicit value threshold are ignored rather than acted upon — generating cost without commercial return.

Ivy Mobility’s Ivy Recommender supports better promotional mechanic selection by providing AI-powered recommendations that reflect outlet-level purchase history and consumer behavior — giving sales reps the specific guidance to push the right promotional mechanics at the right accounts rather than applying a uniform promotional approach across a diverse outlet network.

Is Your Trade Promotion Investment Generating the Returns It Should?

CPG brands handle hundreds of promotions as the importance of trade promotion grows. With an exponential growth rate, you should be able to set up and implement trade promotions quickly and easily. With a robust solution that adopts a solid TPM framework, your business will achieve faster implementation and better optimization with minimized costs. The software will help you become data-driven with your trade promotions for long-term efficiency.

Fresh thinking on what promotional success means, measurement frameworks that capture incremental impact rather than promotional activity, mechanic selection grounded in evidence rather than competitive imitation, and TPM software that enables the data-driven approach that long-term promotional efficiency demands — these are the practices that separate the 40% of promotions that deliver genuine value from the 60% that consume budget without commercial return.

Ivy Mobility’s integrated route-to-market platform, combining Trade Promotion Management, the Ivy Recommender, Distribution Management, Retail Execution, and Ivy Insights analytics, provides the complete commercial infrastructure for CPG companies that want to make every promotional dollar work harder. Trusted by 100+ CPG brands across 20+ countries and 110,000+ users, built on AWS, Salesforce, and Azure.

By opting for a trade promotion solution with the right framework and technology, your business is up for success. Keep these best practices in mind when setting up your next promotion!