Frequently Asked Questions
Trade Promotion Management
What is trade promotion management?
Trade Promotion Management (TPM) is the process of planning, executing, and analyzing promotional activities to increase product sales. Effective TPM helps CPG companies drive incremental volume, maximize return on investment, and improve collaboration with retail partners.
👉 For a deeper dive, read our TPM blog article.
What is trade promotion optimization?
Trade Promotion Optimization (TPO) uses data and AI to evaluate past promotions and simulate future ones. It includes pre-evaluation, where different promotional scenarios—such as timing, discount levels, and mechanics—are compared before execution. This helps identify the most effective strategy to maximize ROI and reduce inefficiencies. Explore our roadmap to a winning promotion optimization strategy.
What is trade promotion forecasting?
Trade Promotion Forecasting (TPF) predicts the impact of planned promotions on sales volume and revenue. It leverages historical data, market trends, and machine learning models to estimate demand. Accurate forecasting helps companies avoid stockouts or overstocking and align supply with promotional demand.
👉 Discover how forecasting empowers sales teams.
What is the difference between Trade Promotion Management (TPM) and Trade Promotion Optimization (TPO)?
TPM focuses on the execution side of promotions—budgeting, planning, and tracking performance across retail partners. It ensures promotional activities are well-managed and aligned with sales goals.
TPO, on the other hand, is about strategic improvement. It uses data and AI to simulate promotional scenarios before they happen (pre-evaluation), analyze past performance, and recommend the most effective mechanics to maximize ROI.
👉 Explore the full TPM/TPO comparison on our blog
What is pre- and post-promotion optimization?
Pre-promotion optimization involves simulating and comparing promotional scenarios before launch—such as timing, discount levels, and mechanics—to identify the most effective strategy. It helps teams make data-driven decisions and avoid costly missteps.
Post-promotion optimization analyzes actual performance after the promotion ends. It evaluates what worked, what didn’t, and provides insights to refine future campaigns for better ROI and efficiency.
How can AI improve trade promotion effectiveness?
AI enhances trade promotion effectiveness by analyzing historical data, predicting outcomes, and recommending optimal spend strategies. It helps identify which promotions are likely to succeed, automates planning workflows, and improves promotional forecasting. The result: higher ROI, reduced manual effort, and smarter, faster decisions.
👉 Discover how AI streamlines the trade promotion optimization process
What does TPx refer to in the CPG landscape?
TPx is a collective term that stands for Trade Promotion Management (TPM), Trade Promotion Optimization (TPO), and often includes Trade Promotion Forecasting (TPF). It represents an integrated approach to managing, analyzing, and improving trade promotions in the consumer-packaged goods (CPG) industry.
Rather than treating each function in isolation, TPx solutions combine various data sources, predictive analytics, and automation to plan, execute, and refine promotions continuously. This holistic strategy helps CPG companies improve ROI, reduce inefficiencies, and align promotional efforts with business goals.
👉 Explore how TPx drives performance in The CPG Executive’s Guide to Advanced TPx
Can TPx tools help with budget control?
Yes—TPx tools play a key role in managing and controlling trade promotion budgets. They provide visibility into planned vs. actual spend, help allocate funds more effectively, and ensure promotions stay within budget. A critical component of this is managing Trade Funds, which are financial resources set aside for trade spending and promotional activities. TPx platforms allow teams to track fund usage, validate claims, and optimize fund allocation across retailers and campaigns.
👉 Learn how to use trade funds effectively
Is TPx only suitable for large CPG companies?
No—TPx (Trade Promotion Management & Optimization) is increasingly accessible and valuable for CPG companies of all sizes. While large enterprises were early adopters, modern TPx solutions are now designed to scale, offering benefits like automation, smooth data integration, and scenario planning that are just as impactful for mid-sized and growing brands. Smaller CPGs often face the same challenges as larger ones—limited visibility, manual processes, and inefficient promotions—but with fewer resources. TPx helps level the playing field by:
- Automating repetitive tasks, freeing up time for strategic work
- Improving forecast accuracy and promotional ROI
- Reducing risks tied to staff turnover or spreadsheet errors
- Enabling faster, data-driven decisions in increasingly dynamic retail environments
In short, TPx isn’t just for the giants—it’s a smart investment for any CPG company looking to grow efficiently and compete effectively.
What is the primary goal of trade promotions?
The primary goal of trade promotions is to increase product sales by influencing retailer behavior and consumer demand. Promotions are designed to boost visibility, encourage trial, and drive volume—especially during key selling periods. When managed effectively, trade promotions also strengthen retailer relationships and improve return on investment.
👉 Learn more on our blog
What is post-event analysis in trade promotion?
Post-event analysis (PEA) is the process of evaluating the performance of a completed trade promotion. It compares planned vs. actual results—such as sales uplift, ROI, and execution quality—to identify what worked and what didn’t. PEA helps CPG companies refine future promotions, eliminate waste, and improve return on trade spend.
What are common mistakes in trade promotion planning?
Common mistakes in trade promotion planning include relying on outdated data, underestimating the importance of pre-evaluation, poor alignment between sales and marketing teams, lack of visibility into trade fund usage, and failing to measure post-promotion performance. These issues can lead to missed opportunities, overspending, and reduced ROI.
👉 Learn how to avoid these pitfalls
How does a TPM solution improve upon spreadsheet-based approaches?
Spreadsheet-based trade promotion planning is often manual, error-prone, and fragmented—making it difficult to track performance, collaborate across teams, or respond to market changes. A modern Trade Promotion Management (TPM) solution replaces these limitations with a centralized, intelligent platform that offers:
- Automation of repetitive tasks like accruals and claims management
- Clear visibility into budgets, forecasts, and promotional performance
- Scenario planning and AI-driven recommendations to improve ROI
- Data consistency across teams, eliminating version control issues
- Integrated analytics that connect planning with execution and post-event evaluation
For a deeper dive, check out The CPG Executive’s Guide to Advanced TPx
What data do you need for successful trade promotions?
Effective trade promotions rely on a combination of commercial flow data, execution inputs, market dynamics, and performance analytics:
- Sell-in data tracks how much product is shipped from the manufacturer to the retailer or distributor.
- Sell-out data captures consumer purchases during the promotional period.
- Sell-through data is relevant in indirect routes to market, where products pass through intermediaries before reaching retailers.
- Execution data—such as second placements and leaflet distribution—helps assess how well the promotion was implemented.
- Market dynamics, including competitor promotions and pricing, provide essential context for evaluating performance.
Performance-focused metrics help quantify impact:
- Baseline sales estimate what sales would have been without the promotion.
- Incremental sales measure the uplift generated by the promotion.
- Promotional spend tracks the investment made.
- Customer contribution identifies which customers drive the most value.
- ROI is derived from combining sales and spend data to assess profitability.
Together, these inputs provide a full picture of promotional effectiveness—from supply chain execution to consumer impact and financial return.
What are scenarios in trade promotion optimization?
Scenarios in TPO are simulated versions of potential promotions. They model different combinations of mechanics—such as discount levels, timing, and product mix—to estimate their likely impact on sales, margin, and ROI before execution.
How are scenarios used in TPO?
Scenarios are used to compare promotional options side by side. By forecasting outcomes based on historical data and AI models, teams can quickly identify the most effective strategy and avoid underperforming promotions before they go live.
What is an example of scenario planning?
A CPG team might simulate three versions of a back-to-school promotion:
- 20% off for two weeks
- Buy-one-get-one-free for one week
- 15% off with in-store display support
TPO tools forecast the expected uplift and ROI for each, helping the team choose the most profitable option.
How to evaluate promotion effectiveness?
Evaluating promotion effectiveness involves measuring both sales impact and financial return. Key metrics include:
- Incremental sales: The uplift in sales directly attributable to the promotion.
- Baseline sales: The expected sales without promotional activity, used for comparison.
- Promotional ROI: Return on investment, calculated by comparing promotional spend to incremental revenue.
- Execution metrics: Such as distribution, compliance, and timing, to assess how well the promotion was implemented.
Importantly, account managers must define measurable objectives—whether it's driving volume or profit, gaining market share, or increasing visibility for a new brand. Even a promotion that doesn’t return a profit can still be successful if it achieves its strategic goal.
👉 Explore the five levers to boost effectiveness on our blog
What are the steps in the promotion process?
The trade promotion process typically follows a structured cycle to ensure strategic planning, execution, and evaluation. Key steps include:
- Budgeting – Allocate funds and set financial targets
- Planning – Define objectives, select products, and choose promotional mechanics
- Forecasting – Estimate expected uplift and ROI using historical and predictive data
- Pre-evaluation and optimization – Simulate scenarios and refine mechanics before launch
- Internal approval and negotiation with the trade – Align with retailers on terms, timing, and execution details.
- Execution – Launch the promotion across selected channels
- Monitoring – Track performance and adjust if needed and possible
- Post-evaluation – Analyze results based on actuals, compare against forecasts, and capture learnings for future planning
Should TPM and TPO be implemented in the same system?
Yes—integrating Trade Promotion Management (TPM) and Trade Promotion Optimization (TPO) into a single system delivers significant benefits. TPM handles the operational side of promotions, while TPO adds strategic intelligence through scenario planning, forecasting, and ROI analysis.
A unified solution enables:
- Seamless data flow between planning and optimization
- The ability to optimize as you plan
- Data-driven insights for faster, smarter decision-making
- Elimination of silos, reducing errors and duplication
👉 Learn more about why TPM and TPO should seamlessly integrate
What are the key benefits of TPM/TPO software?
TPM (Trade Promotion Management) and TPO (Trade Promotion Optimization) software help CPG companies move from manual, spreadsheet-based processes to intelligent, data-driven promotion strategies. Key benefits include:
- Improved forecast accuracy through AI and historical data modeling
- Higher ROI by identifying and executing the most effective promotional scenarios
- Permanent visibility into budgets, performance, and execution
- Automation of repetitive tasks like claims, accruals, and reporting
- Cross-functional collaboration with consistent data across teams
- Scalability for companies of all sizes, from emerging brands to global enterprises
👉 Learn more on our blog
How to choose the right TPM solution?
Choosing the right Trade Promotion Management (TPM) solution starts with understanding your business needs. Look for a solution that supports end-to-end promotion planning, daily accruals, claims handling, fund management, and performance tracking. It should integrate easily with your existing systems and offer flexibility for both direct and indirect routes to market.
Advanced TPM solutions also include optimization capabilities, allowing you to simulate scenarios before running promotions. This ensures your promotions are not only well-managed but also strategically sound.
Trade Spend Management
What is trade spend in CPG?
Trade spend refers to the investment that consumer-packaged goods (CPG) companies make to promote their products through retailers. This includes discounts, promotional allowances, in-store displays, and other incentives aimed at increasing product visibility and driving sales. Managing trade spend effectively is crucial for maximizing ROI and ensuring promotional activities align with strategic goals.
👉 To explore how trade spend impacts profitability and how leading CPG companies are optimizing it, check out our full article
What’s the difference between trade spend and trade promotion?
Trade spend is the overall investment CPG companies make to support retail sales, while trade promotion is a specific short-term investment aimed at generating incremental sales—through tactics like discounts, temporary price reductions, or in-store visibility.
Why is trade spend optimization critical for CPG companies?
Trade spend can account for up to 20% of a CPG company’s revenue. Optimizing it ensures that every euro or dollar spent delivers measurable value. Without optimization, companies risk overspending on low-impact promotions, missing growth opportunities, and eroding margins. Smart trade spend management drives profitability and competitive advantage.
What are common challenges in managing trade spend?
CPG companies often struggle with fragmented data, lack of visibility into ROI, and misaligned promotional planning. These issues can lead to overspending or underperforming promotions.
Why do CPG companies invest heavily in trade spending?
Consumer-packaged goods (CPG) companies invest significantly in trade spend to drive retail sales. These investments—such as lump-sum payments to secure listings, fees for shelf space, in-store promotions, and incentives like EDLP (Everyday Low Pricing)—help boost product visibility, drive volume, and secure shelf space. When managed strategically, trade spend can enhance brand competitiveness and deliver measurable returns, while also improving collaboration with retailers.
👉 Learn more about the impact of trade spend in CPG
What types of trade spend are there?
Trade spend refers to the investment CPG companies make to promote their products through retailers. It typically falls into two categories:
- Contractual trade spend (also known as trade terms): These are long-term agreements with retailers, such as listing fees, shelf space allowances, and everyday pricing support.
- Promotional trade spend: These are short-term incentives like discounts, in-store promotions, and temporary price reductions aimed at boosting sales during specific campaigns.
Effectively managing both types is essential for maximizing ROI and ensuring that promotional activities align with strategic business goals.
👉 To gain further insight, check out our full article on trade spend
What are the risks of unmanaged trade spend?
Poorly managed trade spend can lead to budget overruns, low-performing promotions, and missed revenue opportunities. Without visibility and control, companies may overspend on ineffective tactics or fail to align promotions with strategic goals. This can erode margins, damage retailer trust, and reduce overall competitiveness.
How can CPG companies improve trade spend ROI?
By using data-driven tools for planning, forecasting, and post-event analysis, companies can optimize promotional investments, reduce waste, and focus on high-impact activities that drive measurable returns.
What are trade accruals?
Trade accruals are financial provisions that CPG companies set aside to account for expected trade spend—such as promotional discounts or retailer incentives—that have been incurred but not yet invoiced. Since trade promotions often span multiple periods and involve delayed billing, accruals ensure that costs are recognized in the correct accounting period. Accurate trade accruals are essential for reliable financial forecasting and performance tracking.
👉 Learn how modern CPG companies are improving accrual accuracy and visibility
Why do trade accruals matter in financial forecasting?
Trade accruals ensure that promotional and contractual trade expenses are recorded in the correct accounting period, even if invoices haven’t been received. Accurate accruals help finance teams manage budgets and report earnings more reliably. Inaccurate accruals can distort financial performance and lead to compliance risks.
👉 Read more on why trade accruals deserve your attention
Which trade spend KPIs should I track?
To measure trade spend effectiveness, CPG companies should track key performance indicators (KPIs) such as ROI on promotions, incremental and baseline sales, promotional lift, spend efficiency, and trade spend as a percentage of revenue. Customer contribution is also essential—it helps identify which customers generate the most sales and profit, guiding smarter investment decisions on where to allocate trade spend more or less.
👉 Explore the 5 essential KPIs for trade spend effectiveness
What are the benefits of trade spend management software?
Trade spend management software helps CPG companies plan, track, and optimize their trade investments more effectively. It improves visibility into spending, enhances forecasting accuracy, reduces manual errors, and enables data-driven decision-making. With the right tools, sales teams can maximize ROI, align promotions with strategy, and respond faster to market changes.
👉 Discover the power of trade spend management software for CPG sales teams
Demand Forecasting
What is demand forecasting for consumer goods?
Demand forecasting in the consumer goods industry is the process of predicting future customer and consumer demand using historical sales data, market trends, and other influencing factors. Accurate forecasts help CPG companies align production with demand, free up working capital, optimize inventory, and plan promotions more effectively.
👉 Learn more about demand forecasting
What is an unconstrained demand forecast?
An unconstrained demand forecast estimates the true customer demand for a product without factoring in supply limitations like inventory shortages or production capacity. It reflects what customers would buy if there were no restrictions, helping CPG companies identify growth opportunities and plan more effectively.
👉 Learn how unconstrained forecasting drives success in CPG
What data do you need for demand forecasting in CPG?
Effective demand forecasting in the CPG industry relies on a combination of historical sales data, promotional calendars, and seasonality trends. Integrating these data sources helps improve forecast accuracy and supports better planning across the supply chain.
What's a baseline in demand forecasting?
A baseline in demand forecasting represents the expected sales volume of a product in the absence of any promotional activity. It reflects the “normal” or underlying demand driven by factors like seasonality, distribution, and pricing—excluding the effects of trade promotions or marketing campaigns. Establishing an accurate baseline is essential for evaluating the true impact of promotions and optimizing trade spend decisions.
What’s the difference between a baseline and a forecast?
A baseline represents expected sales without any promotional activity—it’s the “normal” demand. A forecast includes all known factors, including promotions, seasonality, and market shifts. The difference between the two helps CPG teams isolate the impact of trade promotions and plan more effectively.
How does zero-touch planning improve demand forecasting?
Zero-touch planning uses AI and automation to continuously update forecasts without manual intervention. It improves accuracy by integrating sell-in, sell-out, and—where relevant—sell-through data, while reducing human bias and lag. For CPG companies, this means faster decision-making, more reliable baselines, and better alignment between trade promotions and demand forecasts.
What are key features of demand forecasting software in CPG?
The best demand forecasting software for CPG companies combines AI-powered predictive models with robust data integration, scenario planning, and collaborative tools. It connects directly to the promotion plan and translates volume forecasts into value, enabling teams to improve accuracy, respond faster to market changes, and align supply with true commercial demand.
👉 Explore how demand forecasting software empowers CPG companies
What's the role of AI in demand forecasting?
AI plays a transformative role in demand forecasting by processing vast and complex data sets to uncover patterns, predict future demand with greater precision, and adapt forecasts in real time. In the CPG industry, AI-driven forecasting reduces error rates, enhances agility, and supports smarter decisions across sales, supply chain, and finance. It also saves time—automating analysis and speeding up planning.
👉 Explore AI demand forecasting challenges and solutions in CPG
Revenue Growth Management
What is revenue growth management (RGM) in the CPG industry?
Revenue Growth Management (RGM) is a strategic approach used by CPG companies to drive sustainable, profitable growth. It involves analyzing and optimizing key levers such as pricing, promotions, product mix, and customer strategy to maximize revenue and margin. RGM helps businesses make data-driven decisions that align commercial execution with long-term value creation.
👉 Learn more about RGM in CPG
Why is RGM important for consumer goods companies?
Revenue Growth Management (RGM) is essential for CPG companies because it enables them to grow profitably in increasingly competitive and complex markets. By optimizing pricing, promotions, product mix, and customer strategies, RGM helps businesses make smarter, data-driven decisions that protect margins, unlock growth opportunities, and align commercial execution with long-term goals.
👉 Evaluate your RGM strategy
Is RGM only for large CPG companies?
Not at all. While RGM originated in large enterprises, modern tools make it accessible and scalable for mid-sized and growing CPGs looking to improve margin and efficiency.
How does RGM differ from traditional trade promotion management?
While Trade Promotion Management (TPM) focuses on planning, executing, and analyzing promotional activities with retailers, Revenue Growth Management (RGM) takes a broader, more strategic view. RGM integrates pricing, assortment, pack architecture, and promotional strategies to drive sustainable growth and profitability across the entire value chain. Unlike TPM, which often operates in silos, RGM uses advanced analytics and cross-functional collaboration to align commercial decisions with long-term business goals.
👉 Learn more in The CPG Executive’s Guide to Strategic RGM
What are the best practices for implementing a successful RGM strategy?
To implement a successful RGM strategy, consumer goods companies should focus on cross-functional collaboration, data-driven decision-making, and continuous performance tracking. Best practices include aligning pricing and promotion strategies with consumer behavior, leveraging predictive analytics to optimize demand forecasting and trade investments, and embedding RGM into commercial planning cycles.
👉 Explore actionable insights on our blog.
What role does data play in effective RGM?
Data is the backbone of successful RGM. It enables CPG companies to make smarter decisions across pricing, trade spend, promotions, and assortment. With AI-powered analytics, teams can uncover patterns, forecast outcomes, and optimize trade investments. When data is clean, connected, and accessible, RGM becomes a strategic engine for profitable growth.
Can RGM improve collaboration between sales, finance, and marketing?
Yes. RGM platforms unify data and workflows across teams, enabling shared visibility, aligned goals, and faster decision-making across commercial functions.
Is RGM only for large CPG companies?
Not at all. While RGM began in large enterprises, modern tools make it scalable and accessible for mid-sized and growing CPGs aiming to boost margin and efficiency.
👉 Discover how RGM supports companies of all sizes in The CPG Executive’s Guide to Strategic RGM
What features should I look for in revenue management software?
Effective revenue management in CPG goes beyond optimizing pricing and promotions—it requires full visibility across the entire business, including indirect routes to market. Leading solutions support end-to-end processes, from planning and execution to actualization through daily accruals. They also offer a fully integrated, native P&L at any level of granularity, enabling precise financial insights without relying on external add-ons. As true SaaS solutions, they ensure scalability and adaptability across markets without added complexity or cost.
👉 Explore critical capabilities on our blog.
Can RGM tools integrate with ERP?
Yes, modern RGM tools are designed to integrate seamlessly with ERP systems. This integration enables frequent data flow across pricing, promotions, and trade investments—eliminating manual work and ensuring a single source of truth. Visualfabriq’s solution, for example, supports automated data integration from ERP and syndicated sources, enabling AI-powered forecasting and scenario planning across the full revenue cycle.
What business outcomes can RGM software deliver?
RGM software empowers CPG companies to drive profitable growth by aligning pricing, promotions, and trade investments with strategic goals. It delivers outcomes such as improved forecast accuracy, optimized trade spend, and faster decision-making through AI-powered insights. By integrating planning and execution across teams, RGM tools help businesses anticipate demand, reduce inefficiencies, and turn revenue growth into a repeatable, data-driven process.
How does AI enhance Revenue Growth Management?
AI empowers RGM by turning complex data into actionable insights. It helps CPG companies forecast demand, optimize pricing and promotions, and simulate outcomes with greater accuracy. This enables faster, smarter decisions that drive profitable growth.
How does RGM improve forecast accuracy and trade spend efficiency?
RGM improves forecast accuracy by unifying data across sales, marketing, and finance, enabling AI-powered models to predict demand with greater precision. This clarity helps teams align on targets and reduce planning errors. For trade spend, RGM tools optimize investment by comparing different promotional scenarios, identifying high-ROI promotions and tracking performance—turning spend into strategic growth.
Can RGM help manage indirect and hybrid routes to market?
Absolutely. Revenue management tools like Visualfabriq’s are built to bring clarity and control to complex go-to-market models. By integrating data from direct, indirect, and hybrid channels, RGM enables smarter forecasting, cleaner financial tracking, and more accurate trade planning. Features like sourcing and distribution ratios, dual commercial/logistic views, and AI-powered sell-through modeling help CPGs manage fragmented data and optimize performance across all routes to market.
👉 Learn more about route to market data intelligence on our blog
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