The Types of Companies that will Evaluate Trade Promotions Fall into 4 Categories.

 

  1. Suppliers of Syndicated Data (i.e. IRI and AC Nielsen)
  2. Consulting companies (e.g. Accenture, Bain).
  3. Boutique modeling companies.
  4. Analysis Companies using robust software.

 

There are also a number of companies that claim to analyze Trade Promotions but do so in the context of selling a product (e.g. digital signage, POP suppliers, retail services).  These companies are primarily in the business of selling a service and use Trade Promotion Analysis and Execution as part of a sales pitch which is to buy their service or product.  

 

  1. Suppliers of Syndicated Services.  These companies (primarily IRI and AC Nielsen) make money selling syndicated data.  Both in their competition with each other and to convince companies to buy more of their services, they make the data as useful as possible and try to find ways to have an ROI for the purchases of the data.  Analyzing Trade Promotions is an area where they offer services to enhance the value of their data.  The primary advantage of these types of services for evaluating the impact of Trade Promotions is that it is free to the buyers of the Syndicated Service, are easy to implement (requiring virtually no in-house work or expertise), are easy to understand and can be used by the sales department with retailers.  The disadvantages are that the same models and marketing factors are used for every product so it is not customized, the people working on the account are not Trade Promotion Experts but primarily sales people or client service people and the models or calculations can produce inaccurate answers leading to wrong decisions.
  2. Consulting Companies.  The advantages of using top tier Consulting Companies is that they have the best talent one on one that they can hire, they will deal at the most senior levels so create a process where the whole company focuses resources towards a clear goal and will work to help collect the necessary data and complete an analysis that is both tactical (in that it has measurements of Trade Promotions) and strategic in that it sets directions for what should be done.  The disadvantage is that they are very expensive and can cost 7 figures for a single study, they don’t have a proven model to analyze Trade Promotions so build a customized solution, once the study is done they leave and unless there is an in-house expert who can pick up their work and maintain top management support the processes set up eventually end and the value of what was provided is lost. 
  3. Boutique Modeling Companies.  There are a number of Boutique Modeling companies which have experience in the field of Trade Promotion.  The advantages of these companies is that they are generally staffed by experienced and knowledgeable people with an expertise and experience in Trade Promotions and Analytics.  They tend to be reasonably priced and bring models that have been successful used with other companies combined with the expertise of the owners of the Company.  They typically don’t come in at senior levels so the impact of their work is more tactical than strategic.  When specific issues or tactical analysis is required they can bring value as the principals of the Company will work hands on with the Companies hiring them.  The disadvantages are that they are small and don’t have the depth to bring a robust sustainable system and process that will be supported by senior management.  Usually they have a champion in the Company hiring them and as long as the Champion is there, value is provided, but when the Champion leaves the work is usually forgotten and any systems and process put in place are eventually dropped. 
  4. Analysis Companies using Robust Software.  This would include a company like SPAR.  The advantages of SPAR is that it has software and a model that is build based on the the mathematical best answers, factors in all marketing conditions and can work using different modeling techniques with different categories and under different situation.  It is less expensive than the Consulting Companies but more expensive to those buying syndicated Data Services (since the analysis is provided free) and more expensive than the Boutique Modeling Companies.  It also provides the most accurate quantification of the impact of Trade Promotions on Incremental Sales, Profit and Consumption.  The disadvantages of SPAR is that it can be more expensive than some alternatives, it does not help in the development and design of promotions, it requires work by Company to gather data to allow for an analysis that is customized for a specific brand and there needs to be someone with sufficient knowledge to be able to work with a sophisticated model.

Which type of service is best to buy depends on the objective.  The large CPG’s Companies with large Trade Promotion Budgets and in-house expertise tend to go with Consulting Companies as this is a Top to Top sale with a significant commitment in money and resources or a Company with Robust Software as they are willing to spend money to get the best possible analysis.  Companies under Budget pressure buying Syndicated Services will go with the free analytics offered by the Syndicated Services and rarely will try to justify spending more money on other alternatives.  The Boutique Firms are best when someone has a specific need to analyze something and wants to work with a knowledgeable expert.  The direction a Company will go depends on the value of getting the most accurate answers, the willingness of top management to support a project, the available budget and the skill of the in-house people to use a more sophisticated approach.Type your paragraph here.