Profitable Revenue Growth with best in class RGM and TPM capabilities
This years’ Revenue Management study confirmed that FMCG organisations are committed to volume, revenue and profitability growth, which shows their renewed attention to revising and reshaping their pricing strategies, portfolio mix and trade promotion tactics. Plus, despite ongoing uncertainty and huge logistical challenges, FMCG’s indicated the intention to increase their trade investments across multiple commercial levers, markets and channels going forward.
The challenge remains, however, in balancing volume and profit margins to ensure ROI growth which is being squeezed by supply chain challenges and higher consumer demand, meanwhile trade promotion management continues to be a time and effort consuming process for almost half of FMCGs. (RM Study 2022 – 45% of FMCG companies indicated most aspects of TPM are time consuming and require effort)
Top Barriers to Revenue Management Success
While there isn’t a silver bullet solution to succeed in this ever-changing environment, FMCG’s will need to overcome data quality barriers to become agile and infuse the right revenue management capabilities and mindset across their organisations in order to deliver against their growth ambitions.
Facing these internal challenges, plus the external macro-environment challenges ahead, requires a clear and holistic view of revenue management levers, and how they impact a FMCG’s profit and loss. Therefore, an integrated view of revenue management and the ability to scale best practice, adapt pricing and promotional strategies in an agile way reduces the need for short term tactical fixes.
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Ambitions for the Future
The good news is that many FMCGs have embraced the TPM journey by better equipping their people with TPx tools and systems. Over half of FMCGs surveyed in our Revenue Management study expressed intent to invest in expanding their TPM systems across geographies in the next 12 months, embedding AI-driven analytics into the TPM systems, and integrating TPx and RGM to achieve a holistic, strategy to execution, revenue management digitisation.
It might sound like a long journey to get there, but it doesn’t have to be. It’s what Kantar XTEL has been doing for CPGs for over three decades, and this experience has enabled the development of a proven approach that is based on hands on knowledge of what works, and what doesn’t.
Wherever you are in your journey, we can help you.
Balancing volume and margin for revenue and profit growth to drive long term brand value has always been the focus of commercial teams. Imagine realizing profit, revenue and volume goals year on year. This is the promise of RGM. Kantar XTEL is making this a reality combining TPM governance and spend optimization with RGM analytic capabilities - embedded within our clients for the long term - to make through the line commercial activity and spend efficiency a reality. Talk to us about how we make this a reality for you.