Trade Promotion Management: Bayer’s global success story
Trade promotion success is a foundational piece in how manufacturers build profitability through the value chain.
Achieving this locally is challenging. Achieving this globally requires significant investment in tools that allow them to thrive.
Enter, Tom Marriage, Global Digital Lead - Commercial Planning.
In this guide, Tom shares insights on how Bayer achieved global success in trade promotion management (TPM). He discusses the evolution of TPM, critical questions companies should ask and how to set up for success.
The journey of trade promotion management
Tom has spent 20 years navigating the complexities of TPM. Reflecting on his journey, he emphasizes the importance of starting with a clear end goal rather than reacting to challenges as they arise.
"Most companies have already begun their trade promotion management (TPM) journeys, even if it's just with basic Excel spreadsheets," Tom notes.
"It's never too late to assess where you are and where you want to go. Building a roadmap and regularly reviewing progress is crucial.”
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Key questions for trade promotion management success
Tom highlights several fundamental questions manufacturers should consider:
Understanding your RGM strategy: What is your Revenue Growth Management (RGM) strategy, and what is the role of TPM in that strategy?
KPI management: What are your KPIs? How will you manage and deliver against KPIs?
Data requirements: What insights from the data do you want a trade promotion management (TPM) solution to provide?
Purpose of TPM: How and by who is TPM being utilised? Do you have visibility and an understanding of trade spend effectiveness?
Current and desired state: How proficient are you at managing trade spend and where do you need to be in relation to your RGM strategy? Do you have the appropriate resources and capabilities to deliver a future state? Is your business ready to do things differently to unlock long term growth?
Flexibility and framework: What level of flexibility is realistic for local markets, and can a global framework accommodate this?
Mapping the trade promotion management pathway
For Tom, establishing a trade promotion strategy before implementation enabled stakeholders to achieve alignment early in the process.
This structure provided visibility at both global and local levels, allowing sales teams to track spending per account, assess spend effectiveness and, ultimately, decide on future spend allocations.
Mapping the TPM pathway for Bayer was a collaborative effort involving TELUS, Tom and other Bayer stakeholders:
Foundational phase: Defining customer listings, terms and fund management, baseline demand integration and post-event ROI
Controlled volume planning: Annual planning of promotional volumes, new product introductions, long-term agreements, baseline adjustments for demand planning and variable rate spend accruals
Total volume planning: Consumption-based planning, accruals harmonization, incremental demand integration and budget tracking
Advanced phases: Commercial value adds and integrated net revenue management, including gross to net management, ERP settlement integration, joint business plans, advanced analytics, trade promotion optimization and predictive modeling.
Tom advises that while AI is a hot topic, foundational and intermediate phases must be in place first to avoid data noise.
Reviewing progress
Once a company has mapped out its pathway, Tom suggests measuring proficiency in each phase and element. He uses ratings such as reactive, workaround, in control, fully managed and expert. For global or multi-market operations, this assessment should be done for each market, considering individual market differences.
Balancing global and local needs
Tom acknowledges the challenge of balancing control and agility when deploying a global TPM solution.
"You don't want to impose something that might not work for an individual country, but you also need to challenge markets when they claim to be different," he explains. “Understanding the details of what each market is doing and comparing it to others is crucial. Often, a global solution can work for most markets with some localized tweaks.”
Core principles for trade promotion management success
Tom outlines five core principles for successful trade promotion management (TPM) implementation:
Know before you go: Understand your current state and what you want to achieve before launching or optimizing a system
Get the right people involved: Form a steering committee, project management team and project operations team with various business disciplines and IT roles
Leverage expertise: Consult and outsource to experts to avoid the pitfalls of building your own TPM solution
Calibrate to your needs: Be intentional about the TPM system features you require; don't pay for unnecessary features
Flexibility within a global framework: Understand local market needs and ensure the system can flex within a global framework.
Strategic framework summary
Start with strategy, not systems: As Tom learned over 20 years at Bayer, most companies jump straight to technology without understanding their current state or desired outcomes—a mistake that leads to expensive workarounds
Build in phases, not all at once: The pathway that worked starts simple with customer listings and fund management, then gradually adds complexity through volume planning before reaching advanced analytics and predictive modelling
Don't rush to AI: While AI sounds exciting, jumping to advanced analytics without proper foundations just creates data noise—get the basics right first
Challenge the "we're different" mindset: The reality is that while markets claim to be unique, most can work within a global framework with some localized tweaks—the key is understanding what each market actually does versus what they say they need
Follow the five principles that work: Know where you're going before you start, get the right mix of people involved, don't try to build everything yourself, only pay for features you actually need, and keep some flexibility for local markets
Measure progress honestly: Using simple ratings from "reactive" to "expert" helps track how well each market handles different trade promotion management (TPM) elements—it's a practical way to see where you really stand
Work with the right partners: Bayer's success came from collaborating with experts like TELUS rather than trying to figure everything out internally
Remember the end goal: All the technology and processes should ultimately help you make better decisions about trade spend and drive profitable growth
Ready to boost your trade promotion profitability?
Source: 2024. Tom Marriage, ‘Harmony from Discourse: Trade Spend’ at TELUS Consumer Goods’ RGM Forum in London.
