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P-O-Inted Observations on Collaborative Promotion Optimization

The Promotion Optimization Institute (P-O-I) just concluded their Fall Joint Business Planning Summit in Chicago, IL and attendees and participants left with as many questions as they received answers.  Under most circumstances that would signal trouble for an industry association; after all, the general expectation is that conference participants will be able to bring their questions and concerns and receive all answers before they leave.  However, for the Promotion Optimization Institute, LLC and CEO Michael Kantor, it was purposeful and part of his overarching plan and strategy to have the Summit conclude with attendees having collected questions to answer upon their return back to their jobs and roles in their companies.

P-O-I is focused on increasing efficiencies and effectiveness of retailer/manufacturer relationships through collaboration.

The 4th P-O-I Summit focused on the importance and relevance of collaboration as a strategic weapon between trading partners.  With a skillful building of the topics impacting promotion collaboration and optimization, Kantor was able to create a thematic imperative that pulsed through each presentation provided to the attendees and raised the importance of assessing and examining the industry assumptions and accepted practices or “givens” before determining what actions to initiate.

The day and a half event kicked off with a Keynote Presentation and Panel Discussion that set the tone at the onset when Dr. John Stanton, Professor of Food Marketing at St. Joseph’s University animatedly admitted, “This is hard stuff!  We are all self-interested parties with our own objectives, metrics, tools, and evaluation criteria.  So what works for Sales may conflict with Marketing; what Operations values differ from IT, what sellers pursue may be in contrast to what buyers or procurement seeks; and Shoppers are often forgotten in the discussions held between retailers and manufacturers.”  Stanton was aided in his presentation by his colleague; Dr. Ron Klimberg who focused on the quantitative or business intelligence challenges facing those trying to collaborate in their striving to have one version of the truth, and an agreed upon set of data all could accept; and the very specific challenges and applications were given a very real face in the successes, struggles, and steps shared by Rob Colarossi, VP of Category Development at Hostess Foods on his journey to improving his Trade Promotion Management (TPM) efforts from a collection of homegrown databases, forms, spreadsheets, and the like to a more automated approach that gives visibility into the business opportunities while managing expenses.


With the theme of promotion collaboration established, the conference attendees then heard how Del Monte approached their journey to move up the ladder from Trade Promotion Management (TPM) to Trade Promotion Optimization (TPO) and become more focused on leveraging their insights into actionable tactics that mutually benefit both Del Monte and their retail partners.  In what would be referred to often and used an example by other presenters, Pam Brown, Director of Trade Promotions and her team spoke of the importance of establishing clear goals, securing senior executive backing, and creating the training and support necessary for people to harness the power of the tools and processes to improve their performance.  The importance of having a vision and outlining a migratory path to achieve that vision was reinforced through the three (3) year journey outlined by Del Monte’s Trade Promotion team that included a change of CEOs, delays in approvals, expectations of near immediate turnaround, etc.

The Summit then allowed for attendees to attend breakout sessions based on their interests in either new research conducted by P-O-I and CapGemini, tools used by Manufacturers/Retailers to optimize trade investment, align assortment, improve loyalty measures, or to network further with other attendees at the booths set up by vendors and sponsors to allow for additional learning or connections with industry experts.  The P-O-I provided snacks and beverages ensured that the vendor booths were always busy with demos, discussions, and people congregating to better understand how to apply the tools.

As one of the invited international attendees and a presenter, Trevor Barrett discussed how international food manufacturer, Premier Foods, PLC was able to migrate to a unified TPO system across numerous customers (retailers), categories, countries, and acquisitions of brands; each with their own nuanced way of doing business.  The complexity of being able to retain a consistency of approach in such a dynamic environment was facilitated by a reliance on SAP applications that allowed Premier to track, manage, monitor and correct trade performance in categories as diverse as bread and cakes, sauces, soups, etc. 

Dale Hagemeyer of Gartner Research provided some context for those attendees looking to assess how all of the various vendors score or compare to each other on strengths of offerings (always a dicey proposition to pull off when many of those vendors were in attendance!).  Hagemeyer explained the metrics he used, how he evaluated the offerings, but reiterated that “more is not always better” if the need can be met with a vendor that is better suited to the opportunity and can provide it without extraneous features.  While concluding that the scoring was somewhat subjective and based on his assessment, few disputed his approach or differed in their assessments of the vendors and capabilities.

Six Sigma Process as a Tool

Kevin Kroymann, Hormel’s National Trade Marketing Manager then shared in very personal terms that resonated with the attendees how critical it is in the meat (or any commodity driven business) to be very mindful of ROI and to maximize efficiencies and effectiveness in creating trade events.  Sharing  insights into how the Six Sigma culture of Hormel and the values it maintains infuse the approach taken by Hormel Trade Marketing both within the company and with their retail partners; Kroymann’s pride in the successes they have had against bigger competitors was clearly evident and in large measure the result of the ability to collaborate more effectively with retailers based on more skillful use of insights, trade promotion analytic capabilities, and the understanding of how to best communicate that with their trading partners.

Steve Jankauskas, Vice President of Business Development for Annie’s Inc. opened many attendees’ eyes by sharing how Annie’s is able to leverage insights that go far beyond the “standard” price elasticity studies available from syndicated data providers through the use of Sequoya’s predictive modeling capabilities.  By sharing examples of how Annie’s has been able to collaborate with their retail partners to maintain or even raise prices based on the insights derived from the research on shopper price tolerances and the impact on purchase behaviors; Jankauskas proved that meeting price points or being the lowest cost in the market is not always the best strategy for either the retailer or the manufacturer.

Day one of the Summit concluded with a truly inspiring story of success from Gabe Gabriel, CEO of the retailer, Haggan & TOP.  Leaning on his considerable experience with both Pepsi and Albertson’s, and coupling that with his background as an Army Ranger, Gabriel shared how Haggan transformed itself from a nearly defunct and irrelevant retailer with no point of strong differentiation from competition into a very competitive retailer that shoppers and employees now view quite positively.  The photos of “before and after” were enough to keep the late afternoon attendees spellbound, but the passion and enthusiasm he spoke with of the collaboration with manufacturers aiding in the transformation was enough to convince all in attendance of the positive future Haggan has under his tutelage. 

Collaboration is to Co-Labor

Day two began with Win Weber of Winston Weber and Associates, Inc. challenging the attendees to consider whether they truly have a collaborative strategy at all, and if so, whether they are incorporating all of the necessary components.  He began his presentation by making a clear distinction between “joint business planning” where one party or the other gains an advantage over the other and collaborative planning where the gain is mutual.  Then, Weber shared his company’s multi-stepped process for ensuring that regardless of the level of sophistication or willingness of the retailer to collaborate; there was a viable business planning approach that was consistent in intent, although not in detail or allocation of resources.

The mid-morning presentation was given by Accenture’s Alex Kushnir and Gary Adams who addressed the benefits of Business Services for certain processes and business needs and SaaS or homegrown developed and maintained solutions for other situations.  When looking at the benefits of off-loading some of the “non-value added tasks and functions” of owning the databases, updating software, and ensuring access at all times to the data versus increased time with trading partners to collaborate; the opportunities became obvious when the right circumstances were identified.

The next presentation was on “Big Data” and was given by Hitachi Consulting.  Using Schwan’s as the example, Hitachi was able to show how all of the varying and disparate sources of data can be “harmonized” regardless of whether it was strictly quantitative, tightly controlled and collected, or pulled from social media postings.  By collecting the data where it resides and being able to aggregate it into something meaningful that Schwan’s is able to use in planning and initiating activities with retailers that is proactively addressing opportunities (as opposed to reactively responding after significant lagtimes), Schwan’s was able to improve distribution, improve incremental opportunities, and develop more accurate forecasts.

Brian Fox, VP of Category Management at Ralcorp (formerly American Italian Pasta Company) discussed how the introduction of LEAN techniques allowed for the company to go from inefficient spending due to poor forecasting, inventory management, and poorly planned product launches, etc. to a company that is viewed as a strong partner that retailers now rely upon and choose to develop strategies with; all the while continuing to improve their strategic and executional strengths.  Fox explained how this was all done under the tightest of budgetary constraints..  With enormous pride and enthusiasm for the process, Fox invited the attendees to make it their own and to implement it in their companies.

The next presentation was given by Megan Margraff, Chief Analytic Officer for Spire, LLC who showed how aligning promotional performance with shopper behavior over time can provide greater context and insight than merely measuring the “lift” of a given event during the promotional period.  With numerous examples, Margraff demonstrated how promotion duration, purchase cycle times, incrementality vs. subsidization, etc. all impact each other and failure to identify their effects on each other may provide a less than accurate view of the value of any given promotional event.

After a day and a half of intense and challenging presentations that forced attendees to examine their own strategies and processes; their own training and reinforcement, and their own tools and applications, many were glad for the experience – and had pages of notes, and a few questions to ask themselves and others in their organizations they were taking back to answer in order to continuously improve their own efforts. The next P-O-I Summit is April 14-16, 2013 in Chicago, IL

P-O-I has as one of its core purposes, the education, and certification of professionals in the industry to become more collaborative.  With that intent, P-O-I is launching (March, 2013) a curriculum for professionals to complete to become certified in collaborative marketing (see:

The Certified Collaborative Marketer (CCM)™ credential is the advanced professional certification that with POI and Dr. John L. Stanton at Saint Joseph’s University delivers tangible value to CPG/Retail Leaders. It demonstrates your command of the critical sales, marketing, and merchandising collaborative skills demanded by today’s evolving Retail/CPG environment to create and optimize; promotional plans, assortments, brand/category/store sales and profits. The CCM is unique among CPG and Retail professional credentials — designed specifically for sales, marketing, and merchandising professionals (e.g. Grocery, Drug, Mass, Club, Dollar).

A Collaborative Marketer understands mutual KPI’s (e.g., item/category profit, volume, share, promotion optimization, in stock position, trip and basket volume/profitability), translating into significant advantage for your company, and career advancement for you.

Roles that are considered as candidates for the CCM Program
• CPG Sales/Mktg.
• Category Mgt.
• Supply Chain Management
• Trade Marketing
• Sales Finance
• Brand Marketing
• S&OP (Demand Planning)
• Retail Marketing
• Retail Advertising
• Purchasing
• Retail Category Management
• Retail Marketing
• Loyalty and Analytics
• Retail Merchandising
• Pricing

Achieving the CCM demonstrates your professional expertise in planning, executing, analysis, shopper insights, leadership, and decision support – essential skills sought after by successful CPG/Retail executive team leaders.

The CCM offers the critical knowledge, skills, and abilities needed to collaborate both internally and with trading partners effectively, to effectively compete in today’s complex CPG/Retail environment. The POI Education Advisory Board members are successfully leading the way in key leadership roles at top companies from CPG, Retail, and solutions providers around the world. Onsite orientation/classes SJU consists of 1.5 days 12-20+ Retailer/Manufacturer Executives who move through the program together.

Busy professionals can take advantage of the various learning formats at their desks, or at convenient locations. Certification will be achieved in a blended format using both classroom and online content. Onsite orientation and Collaborative Marketing exercise are held at Saint Joseph’s University, Philadelphia, PA. 15 minutes from Philadelphia International Airport (PHL). Hotel/Travel recommendations to follow.

The CCM delivers a solid return on your investment. Certified Collaborative Marketers (CCM)™ will be able to effectively collaborate both internally, and with partners on a variety of subject areas promotional plans, assortments, category sales and profit. The CCM will understand mutual KPI’s (assortment, brand, category, volume, share, promotion, in stock position, basket building, in store execution, etc.) deliver capabilities and results for companies that they would otherwise have to outsource and continually subsidize.


David Zahn