I’ve always wondered why executives don’t devote more time and energy to the strategy and positioning of pricing, trade spending and operator allowances. The amount of money spent on these activities is staggering. Just about everyone agrees that these add up to being the 2nd or 3rd largest item on the corporate P&L.
Consider this; with executive engagement, a trade pricing strategy promises a strong return on investment [up to 10x more than competing activities]. So, what are you waiting for?
Let’s talk about creating a corporate strategy that articulates the ‘who, what, and why’ and provides clear guidance on processes and execution for your entire organization. Identify your target customers, their needs, a value story for how you can meet the needs, and the expected benefits of success.
There are 2 general approaches to trade spending strategy:
- The Offensive Expectation: trade dollars should be positioned as performance-based and value-generating mechanics. These are complex to manage, monitor and audit. With this approach, build out a resource model to support and ensure you can accomplish your goals without spending your benefits on administration.
- The Defensive Expectation: trade dollars are focused on avoidance [not opportunity] and will be earned mostly on purchases alone. In this approach, simplification of the process structure is recommended in order to minimize an administrative investment.
What are you doing to address the opportunity? I’ve written a guide to help you through this process. Soon you’ll have a trade strategy positioning statement and you can begin communicating your strategy inside and outside of your organization. Download the guide, get started, and reach out if you have questions.