ContextConsumer Goods industries often have a high share of their expenditure invested in trade marketing. Often this is historically grown into a highly fragmented, unmanaged trade invest scheme with only few pay-for-performance elements included that are not consistently used. Potentially even missing a governance process to manage spend allocation on an ongoing basis. This leads to situations where high invests can be given to retail partners with little or even negative growth, without even knowing.
Revenue SolutionOliver Wyman established a fact-driven process for top-down allocation of trade spend to trade partners and categories, resulting in a harmonized and exhaustive trade invest grid. In order to maintain trade spend optimization sustainably, Oliver Wyman has developed a Trade Spend Management tool. This tool allows for full transparency of trade spend globally, simulating decisions on marketing investments on a client level, and leveraging management reports to steer trade spend on a strategic level. Impact
Typically, a collection of measures is installed during a trade spend transformation that leads to benefits of 1.5-2 percentage points EBIT margin improvement.