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When Vendors and Retailers Go All Over the MAP

by James Kennedy , 27.05.2014

When CPG, HBA, and other manufacturers invest millions of dollars in promotion campaigns, the goal is to build deeper relationships – not just with consumers, but also vendors and retailers. And to give their dollars a solid shot at paying off, manufacturers design elaborate campaigns. By dropping on a certain date, and ending on another, manufacturers can control their investment and measure the effects of their promo dollars on sales.

To make all of this happen, manufacturers rely on their vendor and retailer partners to play by the rules. But, as we all know … rules were meant to be broken.

By stepping outside the designated promotional periods, or guidelines, vendors and retailers may seek to extend the discount, or tack on other offers. None of this is to the manufacturer’s advantage – but, chances are, he’ll never find out.

The fact is that tracking promotion compliance can only happen in one, arduous way – daily checking of print advertising in a plethora of markets. Multiple circular versions need to be collected and analyzed by researchers who know what they are looking for. GfK is one of the few firms that take on this tedious process; and the rewards for the manufacturer are significant.

With compliance data in hand, manufacturers can do much more than scold. They can engage in meaningful conversations with their vendors to better strengthen their relationships. Regular meetings with the vendors can revolve around a scorecard of compliance against the issued policy.

In addition, manufacturers can refer to the findings in annual meetings with their vendors to boost co-op spend and advertising placement. For the manufacturer, competitive activity is monitored too, helping them understand the moving forces in the marketplace that contribute to the sales of their products.

To justify continuing, and even expanding today’s promotional programs, manufacturers need to know they are getting maximum bang for their bucks. The focus on marketing ROI is relentless, and true cause-and-effect numbers are only as reliable as compliance with the program’s parameters. That is why the dogged task of capturing and recording promotion activity, while anything but high-tech, is still powerful.

James Kennedy is Managing Director of GfK’s Promotion & Causal Retail team for North America. He can be reached at james.kennedy@gfk.com.

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