An enhanced TPM solution and ongoing managed services help streamline operations and boost revenue

Hershey's trade promotion management transformation yields sweet rewards

Hershey's trade promotion management transformation yields sweet rewards
  • Case Study
  • April 16, 2024

If you’ve ever been tempted by a sweet deal on holiday candy or impulsively grabbed a two-for-one treat from the display by the cash register, then you know the power of good trade promotion. For a major consumer packaged goods (CPG) company like The Hershey Company (Hershey), trade promotion management (TPM) is a crucial piece of the business model, affecting revenue and operations at nearly every link in the retail supply chain. To continue delivering value and prepare for an upcoming ERP upgrade, Hershey decided to transform its TPM program enterprise-wide. PwC helped design and implement an SAP-based TPM platform, then helped integrate it into SAP S/4HANA and shifted into providing ongoing TPM managed services. As a result, Hershey can make better decisions — helping drive significant improvements in trade spend efficiency, forecasting and revenue growth — and make customers’ lives a little sweeter, one Kiss at a time.

CLIENT

INDUSTRY

Consumer markets

FEATURING

SAP
PwC's Managed Services

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2:09

Hershey PwC SAP video

~99.5%

accuracy in trade investment forecasts as a result of TPM upgrade

~730

basis point improvement in trade spend efficiency since implementing the new system

>50%

reduction in incidents in TPM system operations with the help of PwC’s Managed Services

A cloud-based TPM solution helps improve analytical rigor and operational efficiency

Hershey's recipe for success

Discover Hershey's recipe for Trade Promotion Management (TPM) success, resulting in improved trade spend efficiency, enhanced data accuracy, collaboration between the business and IT, and more.

Pour in milk

TPM strategy

Hershey relies on TPM to help boost revenue and coordinate retail marketing, pricing and displays. Working with PwC, Hershey adopted SAP’s TPM platform – offering more scalability, integration and analytics capabilities for improved performance and data handling.

Stir in sugar

Successful TPM platform implementation

Hershey, PwC and SAP collaborated to create a user-centric TPM platform with in-memory databases, ensuring efficient data handling and scalability as complexity grew.

Add in chocolate

PwC’s Managed Services support

Hershey trusts PwC to manage its TPM platform. PwC’s one-team approach offers dedicated and customized support, including day-to-day stabilization, issue management and ongoing enhancements.

The complete Hershey bar

The cohesive TPM system

Select results:

  • Achieve a 700+ basis point increase in trade spend efficiency
  • Improve data accuracy and provide better insights for informed decision-making
  • Help streamline front and back-office operations, improving collaboration
  • Create win-win-win promotions for customers, retailers and Hershey

Hershey's recipe for success

Discover Hershey's recipe for Trade Promotion Management (TPM) success, resulting in improved trade spend efficiency, enhanced data accuracy, collaboration between the business and IT, and more.

Pour in milk

TPM strategy

Hershey relies on TPM to help boost revenue and coordinate retail marketing, pricing and displays. Working with PwC, Hershey adopted SAP’s TPM platform – offering more scalability, integration and analytics capabilities for improved performance and data handling.

Stir in sugar

Successful TPM platform implementation

Hershey, PwC and SAP collaborated to create a user-centric TPM platform with in-memory databases, ensuring efficient data handling and scalability as complexity grew.

Add in chocolate

PwC’s Managed Services support

Hershey trusts PwC to manage its TPM platform. PwC’s one-team approach offers dedicated and customized support, including day-to-day stabilization, issue management and ongoing enhancements.

The complete Hershey bar

The cohesive TPM system

The cohesive TPM system helped Hershey:

  • Achieve a 700+ basis point increase in trade spend efficiency
  • Improve data accuracy and provide better insights for informed decision-making
  • Streamline front and back-office operations, improving collaboration
  • Create win-win-win promotions for customers, retailers and Hershey

SITUATION

Getting s’more out of trade promotion

Imagine you’re at the grocery store, checking items off your shopping list, when an end cap display of heart-shaped Reese’s Peanut Butter Cups catches your eye. The packaging and display feature fun, seasonal designs, and the sign says they’re “buy one, get one free.” It’s too good a deal to pass up. You buy two for your upcoming Valentine’s Day party and get two more free. That’s what Hershey might call a “peanut butter coup”: creating moments of goodness for its customers through successful trade promotion.

As one of the major CPG companies, Hershey relies on TPM — the orchestration of retail marketing activities like special pricing, in-store displays, etc. — as a central element of its business model. From product pricing, volume forecasting and supply chain planning to solving disputes, issuing payments and influencing the company’s financial statements, TPM plays a critical role in enterprise-wide operations. Having an accurate, efficient and well-managed TPM system helps set the bar high, giving Hershey more confidence in its data, its pricing and promotional decisions. It also helps Hershey differentiate in an increasingly competitive retail landscape. To continue to grow while also flexibly adapting to a future SAP S/4HANA ERP platform, Hershey decided to upgrade from a TPM system reliant on disparate, often outmoded processes to a streamlined, cloud-based solution.

Embracing the challenge

Because TPM touches virtually every aspect of the business, it is inherently complicated, requiring vast amounts of data to travel from account managers to retailers and back daily. For everything to run smoothly, all the data in the system must be correct; any inaccuracies can create a ripple effect, impacting analytics, decision-making and financials across the entire company. Hershey knew that to succeed it needed the guidance of a seasoned advisor. PwC’s wealth of experience with TPM and SAP implementations made it a fitting choice.

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SOLUTION

Unwrapping success with SAP S/4HANA and PwC Managed Services

PwC and Hershey collaborated with SAP to develop a TPM system capable of accurately handling massive amounts of data efficiently and at speed. User adoption was one of the key focuses in the design. TPM implementations often fail because of what some call “the adoption spiral of death” — when technology is too slow or inefficient, users learn to work around it, reverting to ad hoc processes and offline spreadsheets. Before you know it, your expensive, state-of-the-art TPM platform has become a burden rather than an asset.

Integration amid a move to SAP S/4HANA

To avoid that problem, the team implemented the newest version of SAP trade management, a technology designed to help drive faster, more predictable system performance. Using in-memory databases, the SAP-based platform was well-equipped to handle massive simultaneous data aggregations and segregations across Hershey’s many products. And as the amount of data in the system grew over time, the platform could accommodate the increased complexity.

Throughout the build, PwC, SAP and Hershey continued to work in lockstep, developing a range of critical features which then influenced SAP’s standard TPM offerings. PwC shared observations about capabilities that would help Hershey merchandise more effectively with retail partners like grocery and convenience stores, enabling SAP’s product team to tailor the solution to Hershey’s needs in real time. With enhanced speed and purpose-made technical improvements as key ingredients of the new platform, Hershey aimed to keep user satisfaction high and process breakdowns low.

The one-team approach

Following successful implementation, Hershey folded the ongoing maintenance of the platform into a larger enterprise contract with its existing managed services provider. However, the complexity of managing a TPM platform makes maintenance an especially delicate process. Hershey realized that to keep the platform running at its fullest potential, it needed a team of highly specialized SAP TPM professionals with a deep understanding of both its technology and its business process. Having helped with the technology implementation and upgrade, PwC’s Managed Services team was fully equipped to lead the day-to-today management of Hershey’s TPM operations.

PwC’s dedicated one-team approach helps Hershey have a direct line of backup for any problems that are unusually complex and dedicated support to make continuous improvements. For example, after observing Hershey’s yearly challenge of rearranging product organization hierarchies on New Year’s Eve, PwC’s Managed Services team created a process efficiency program to help automate the arduous process of making master data changes. A consistent provider across design, implementation and management can keep the platform running effectively and stabilize day-to-day incidents quickly, taking pressure off the company’s business and IT teams and improving operations companywide.

The triangular collaboration between Hershey, PwC and SAP continues to prove mutually beneficial. Hershey receives swift, targeted support as PwC manages an industry leading TPM platform, including innovating solutions specific to its needs; SAP garners valuable, real-time client feedback, allowing it to continuously enhance its products; and PwC enjoys direct access to industry leading SAP technology as it’s developed.

RESULTS

A solution chock-full of efficiencies

The new platform helped transform the sales and trade planning process to drive improved trade efficiency and TPM operations from front to back. Unifying disparate processes onto a single cloud-based platform dramatically improved TPM data accuracy, reducing the friction and complexity of day-to-day operations while enabling more data-backed decision-making. Meanwhile, PwC’s Managed Services support helped keep the platform running smoothly, resulting in a more than 50% reduction in incidents in TPM system operations. With fewer incidents and more efficient processes, employees were able to spend less time on administrative work related to weekly volume and promotion updates, assortment maintenance, process constraints, incident management and reporting. Instead, they were able to reinvest that time in more meaningful areas — including a deepened focus on driving customer attraction and loyalty.

Outcomes obsessed = sweet results

Hershey’s new TPM platform has helped to drive significant bottom-line benefits. By injecting another level of analytical rigor and insight into its TPM system, Hershey compels employees to demonstrate, in granular detail, how their plans are built toward company goals. Advanced data analytics tools like A/B testing deliver deeper insights about consumer shopping behaviors, driving more efficient, impactful trade promotions such as customized candy displays and engaging environmental retail design. As an added benefit, Hershey can work with its retailers to create win-win-win promotions: where the customer, Hershey and the retailer all benefit from incremental volume while offering its sweet treats at lower prices.

The advanced analytics also enable more effective financial decision-making and revenue growth management. Hershey has experienced significant benefits from the program within its first five years, with consistent growth in customer return on investment (ROI). As the company looks to the future, its accurate, efficient, well-run TPM continues to deliver value and enable Hershey to do what it does best: delivering sweet experiences and moments of goodness to customers everywhere.

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Are you ready to drive TPM transformation?

Tranformation Leader

As an outcome-driven leader, your role is to champion ongoing change and foster a strong culture of transformation. Trade promotion management is an area ripe for disruption and bold thinking. Break down silos, align initiatives and streamline a critical business function that impacts the entire organization. Embrace the opportunity to revolutionize TPM. Consider solutions like SAP’s TPM platform and PwC’s Managed Services support to help you get there.

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Chief Information Officer

You understand the need to leverage cloud-based platforms and data to uncover insights, as modernization is key to growth. A comprehensive platform can dramatically improve TPM data accuracy and drive more informed strategy and decision making. As you adopt cloud technology, keep the user experience in mind to enable easier adoption and future productivity.

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Chief Operating Officer

Discover the power of an upgraded TPM solution to achieve your goals: supply chain resilience, digital solutions, task automation and upskilling the workforce. Trade promotion management unifies processes and significantly improves data accuracy. Managed correctly, it can help build trust in technology, boost efficiency and deliver bottom-line benefits.

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Chief Marketing Officer

In the competitive retail landscape, personalized customer experiences require a blend of art, science and digital transformation. Every buying decision is data-driven, so it's crucial to use insights to build consumer trust. A top-notch TPM platform is essential for strategizing retail promotions, connecting with partners, creating memorable experiences and boosting sales.

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Ethan Dameron

Principal, Strategy&, PwC US

Bill Strasser

SAP AES Leader, PwC US

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