Posted by Stacy Jackson
Recently I posted about the critical steps in foodservice trade promotion management (TPM). The foundation of those critical steps for any TPM solution is standardization. I pulled the transcript of a webinar about Standardization & Communication in Foodservice Trade Promotion Management presented by Roth Block, COO – Answers Systems and Tom Rector, President – Foodservice University®. This information is too good not to share again - at least in this summary form. To view the original webinar recording, visit FoodserviceU.com.
Standardization is the functional operating structure in which a trade promotion management system resides. Foodservice manufacturers should divide their system into two subsets and do a deep dive into each to ensure standardization and consistency. Those subsets are “Rules of Engagement” and Back Office Procedures. For today’s post, let’s focus on Rules of Engagement. In my next post, we will touch on Back Office Procedures.
Rules of Engagement
A foodservice
trade promotion deal/offer includes a manufacturer, a distributor, and an operator. Without boundary definitions for how trading partners engage with one another, things can definitely go awry. Rules of engagement can be defined via contract standardization. Key elements in contract standardization include:
- Agreement Format and Constraints: By using a trade promotion management application such as the ContractPro® solution, manufacturers can rest assured that any contract created by any sales representative or broker will be in the appropriate format, allow for categorization by program type (bill-back, performance-based, category allowance, marketing program funds, etc.), and include key contract constraints such as qualifying SKUs, categories, time frame, eligible parties, terms & conditions, and volume forecast.
- Approval Hierarchy: A best-case scenario for a trade promotion management solution is that it will allow for both a mechanized and manual approval process. Some contracts may meet a manufacturer’s margin and volume threshold. In those cases you may opt to allow your system to “auto approve” contracts meeting those minimum thresholds. In other cases you can route contracts up the chain of command for manual approval by a Region Director or corporate-level staff member.
- Contract Communication: When considering communication of your contracts, a manufacturer must consider internal and external audiences that need to know about the deal. A central repository for contracts, such as the ContractPro solution, provides visibility and transparency throughout your organization. Your external audience (distributors, operators), and therefore need another means of receiving communication of the deal. ContractPro clients have access to a contract letter that contains standardized terminology, client-approved legal terms, eligible SKUs, time frames.
Check back for my next post when I will review Back Office Procedures for foodservice trade promotion management.
Technorati tags:
trade promotion management,
foodservice,
contract management,
ContractPro,
Answers Systems,
Foodservice University