PRIVATELABELPROFIT

1、w. frank dell ii, cmcdellmart & companymay, 2001dellmart & company2q category management introduction distributor program supplier programq private label profitability introduction activity based costing net profit applicationsdellmart & company3q provide an overview of category manageme

2、nt and its processq identify strengths and weaknessesq outline a suppliers approachintroductiondellmart & company4q categorya distinct, manageable group of products/services that consumers perceive to be interrelated and/or substitutable in meeting a consumers needs.q category managementthe dist

3、ributor/supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer value.introductiondellmart & company5frompushsalespersonbuyer/sellercost averagingdealssales driverstopullbusiness teamaccount managementcost to ser

4、vepay for performanceprofit driversintroductiondellmart & company6fromdata protectiondatashelf managementwin/losefasttodata sharingknowledgeassortment managementwin/winfastestintroductiondellmart & company7copps corporation - wisconsin, usaq snack category 3 year increase 87% year 1 33% year

5、 222% year 315%q candy category 2 year increase 111% year 160% year 232%introductiondellmart & company8q started in the 50s & 60sq brand general managerproductdevelopmentpromotionsadvertisingprofit & lossresponsibilitybrandmanagementintroductiondellmart & company9brand managementsnap

6、, crackle & popvstony the tigervsgeneral millscategory managementkelloggvsgeneral mills&breakfast alternativesintroductiondellmart & company10strategy business processscorecardcollaborative trading partner relationshipsinformation technologyorganization capabilitiesdistributordellmart &a

7、mp; company11q manage the category as a strategic business unitq develop strategic category plans based on category goals, competitors and market conditionsq determine price, merchandising, promotion and product mixq collaborate with suppliersdistributordellmart & company12category definitioncat

8、egory rolecategory assessmentcategory scorecardcategory strategiescategory tacticsplan implementationcategory reviewdistributordellmart & company13q what products are in a category?q how will categories be grouped?source: ecr category managementcategorysub-categorysub-categorysegmentsegmentsegme

9、ntsegmentsub-segmentsub-segmentsub-segmentsub-segmentsub-segmentsub-segmentsub-segmentsub-segmentdistributordellmart & company14qdestinationto be the primary category provider and help define the retailer as the store of choice by delivering consistent, superior target consumer value.qroutineto

10、be one of the preferred category providers and help develop the retailer as the store of choice by delivering consistent, competitive target consumer value.qoccasional/seasonalto be a major category provider, help reinforce the retailer as the store of choice by delivering frequent, competitive targ

11、et consumer value.qconvenienceto be a category provider and help reinforce the retailer as the store of choice by delivering good target consumer value.distributordellmart & company15distributorshare&efficientlycontribution&productivitymarket share&benchmarksbuyer profile&purchas

12、e behaviordistributormarketconsumersuppliercategorysub-categorysegmentbrandskudellmart & company16consumercurrent target retention level_ purchase incidence_ satisfaction rating_share category of department_ category of market_sales category $_ growth_ sales/sq. ft/week_profit gross profit $_ gr

13、oss margin_ gross profit sq. ft/week_private label sales_ % of gross profit_ gross margin_product supplydays of supply_inventory $_turns_gmroi_service level_distributordellmart & company17category rolesattract strategy - traffic building - image enhancingbuild loyalty strategy - transaction buil

14、ding - turf protectormicro marketingdc/store receiving - auto replenishmenttransportation - dsd, backhauldc/store handling - cross dock - sale-ready packagingdc/store receiving - auto replenishmenttransportation - dsd, backhauldc/store handling - minimize handling - reduce shrinktransportation - red

15、uce transit timedc/store handling - reduce shrink - sale-ready packagingdc/store receiving - auto replenishment dc/store handling - minimize handling - reduce shrinkacquisition strategy - best quality/reliability - best cost & termstransaction strategy - all edi & eftacquisition strategy - b

16、est quality/reliability - best cost & termstransaction strategy - majority edi & eft acquisition strategy - best quality/reliability - best cost & termstransaction strategy - some edi & eftacquisition strategy - low costfull service - (if necessary)differentiated - (from competition)

17、 build loyalty strategy - transaction building - turf protectingcluster marketingsemi-service - (if necessary)non-differentiated - (from competition)attract strategy - traffic building - excitement creatingcluster marketingbuild loyalty strategy - transaction buildinguniform marketing self service -

18、 (if necessary)non-differentiated - (from competition)self-servicenon-differentiated - (from competition)category rolescategory strategiesprocurementdistributionmarketingin-store servicedestinationroutineoccasional/seasonalconveniencedistributordellmart & company18traffic buildingtransaction bui

19、ldingprofit contributioncash generatingexcitement creatingimage creatingturf defendinghigher ring-up, impulse purchasinghigher gross margin, higher turnshigher turns, frequently purchasedimpulse, lifestyle-oriented, seasonalcategory strategiescategory strategies characteristicsfrequently purchased,

20、highly promoted, impulse, unique items, seasonalused by retailers to draw traditional customer basehigh share, frequently purchased, high % of salesdistributordellmart & company19prime store location - high traffic - high exposure timehigh cube allocation (cube to time supply) leadership - best

21、value (per unit or use) - entire categorycompetitive/consistent - equal to competition (per unit or use) - sub-categories - segments - major brands/sku - reduce shrinkcompetitive/seasonally - close to competition (per unit or use) - sub-categories - segmentsnon-inflammatory - within reach to competi

22、tion (per unit or use) - major brands/skuscomplete variety - sub-categories - segments - brands - skusbroad variety - sub-categories - segments - major brands - major skustimely variety - sub-categories - segmentsselect variety - major brands/skushigh level of activity (if necessary) - high frequenc

23、y - long duration - multiple vehicles average store location - high frequencyhigh cube allocation (cube to time supply)average level of activity (if necessary) - average frequency - average duration - multiple vehiclesgood store location - high trafficaverage cube allocation (cube to time supply)ava

24、ilable store locationlow cube allocation (cube to time supply) seasonal/timely activity (if necessary) - multiple vehicleslow level of activity - multiple vehicles category rolescategory tacticsassortmentpricingshelf presentationpromotiondestinationroutineoccasional/seasonalconveniencedistributordel

25、lmart & company20flagshipcash machinemaintain/growcore trafficunder firerehabsales dollarslowhighhighlowgrossmarginpercentdistributordellmart & company21sleeperwinnersquestionableopportunity gapsmarket growthretailershare ofmarketlowhighhighlowdistributordellmart & company22staplesniches

26、necessitiesfill-insreachfrequencylowhighhighlowdistributordellmart & company23vp merchandisingbuyerbuyerbuyeradministrationretail pricingadvertisingspacedistributordellmart & company24product supplyspace allocationretail merchandisingcategory analysisretail pricingadvertising coordinationpri

27、ce/data integritymarketing servicesallowance/cost controlcategorymanagementdistributordellmart & company25responsibilitiesretailerswholesalersnegotiation with suppliers84.6%determine investment buys76.9%determine promotions- items/schedule73.1%sales/profit/market share goals57.7%develop strategi

28、c alliances53.8%budget development50.0%strategic category planning46.2%competitive store analysis34.6%optimize by store clusters26.9%develop shelf plan-o-gram86.4%83.1%71.2$69.5%66.1%64.4%61.0%61.0%44.1%42.4%26.9%distributordellmart & company26number of categoriesretailerswholesalers1 to 9920.0%

29、16.7%100 to 19930.0%16.7%200 or more27.5%25.0%average number191148distributordellmart & company270.00%10.00%20.00%30.00%40.00%50.00%weeklymonthlyquarterlysemi-annuallyannuallysporadicretailerwholesalerdistributordellmart & company281. official approach leaves out consumern merchandisers see

30、cm to lift salesn executives see cm to raise marginsn neither see it for what it was intended: framework for understanding the consumer2. wide gap between results and expectationsn cornell study ranged from 3 to 8 point lift in ebitn 73% of cm practitioners rate experience “somewhat” or “not at all”

31、 successfuln many of the few that claim success cant support it with metrics3. official approach is too complicatedn only 15% claim to be following the guidelinesn ceo at large chain: “wed have to hire 14 full-time people just to fill out and maintain the templates.”n personnel talent a problem4.“on

32、e-size-fits-all” is not workingn 40% dont even see need to assign rolesn half do not employ activity-based-costingn industry current-state is too diverse. take merchandising approaches: high/low, every-day low, premium, limited selection, semi-warehouse, superstore, etc.distributordellmart & com

33、pany29category leaderrespected supplierpreferred suppliercost reductionalliancesupplierdellmart & company30availablesalesgross marginshared.p.p.categorymanagementsupplierdellmart & company31differencessupplierretailer storebrandscheck your bias at the doorbring your knowledgesupplierdellmart

34、 & company32q consumer is the common focusq mutually agreed objectives, strategies, tactics and scorecard measuresq rewards support collaborative goalsq relationships and trust are earned, not givenq information sharing is essentialq win/win is critical for successq multifunctional access and co

35、mmunicationq openness to change traditional attitudes and relationshipssupplierdellmart & company33preparationexecutioncoordinationn create teamn develop plann collect informationn develop toolsn package programn target customersn present plann establish goalsn organize teamn develop scorecardn

36、establish schedulen share informationn perform analysisn develop plann implement plann monitor resultsn modify plansupplierdellmart & company34q provide introduction to activity based costing (abc)q identify net profit applicationsintroductiondellmart & company35q gross margin ineffective ma

37、nagement toolq simple relationship - cost vs retail priceq not a predictor of profitintroductiondellmart & company36 sales - cost of goods sold = gross margin + direct revenue - abc costs = net profitintroductiondellmart & company37q abc is a cost allocation or assignment methodologyq cost a

38、ssignment based on: activities - tasks within a process drivers - factors creating costsabcdellmart & company38abcdppsalesyesyescost of goodsyesyesdirect revenueyesyesheadquartersyesnowarehouseyesyestransportationyesyesstoreyesyesabcdellmart & company39q headquarters management merchandising

39、 finance & accounting human resourcesq warehouse management labor benefits space utilitiesq transportation labor equipment suppliesq stores management labor benefits space utilitiesabcdellmart & company40product-inproduct-outbuyingdistributionstore operationsadministrationabcdellmart & c

40、ompany41distribution centerdirect store deliverydrop shipwholesalerstoreabcdellmart & company42abcdellmart & company43edible29%non-edible9%frozen7%dairy15%bakery4%hbc4%gen. merch.1%all other31%ediblenon-ediblefrozendairybakeryhbcgen. merch.all otherabcdellmart & company44edible20%non-edi

41、ble7%frozen7%dairy18%bakery4%hbc3%gen. merch.1%all other40%ediblenon-ediblefrozendairybakeryhbcgen. merch.all otherabcdellmart & company45edible29%non-edible10%frozen10%dairy30%bakery5%hbc3%gen. merch.2%all other11%ediblenon-ediblefrozendairybakeryhbcgen. merch.all otherabcdellmart & company

42、46qprivate label products achieved results superior to branded in the following categories:baby food & formulableachrfg dipshair conditionerbaking cups/papercharcoalrfg sour creamhair spray/spritzbaking needsdiapersenglish muffinshome health diagnosticsbottled waterpet suppliersadult incontinenc

43、einternal analgesicscandytobacco productscold/allergy/sinus liqmouthwashcoffee creamerfz fruitcold/allergy/sinus tabshaving creampastafz potatoes/onionscosmetics - nailweight control liq/pwdpowdered milkfz prepared vegetableseye care productsauto fluids/antifreezespices/seasoningsother frozen foodsf

44、irst aid treatmentsfilmsugarrfg butterfood care productsplastic bottlesvegetablesrfg cottage cheeseabcdellmart & company47applicationsdellmart & company48q logical presentationq reasonable assumptionsq demonstrate knowledge of businessq promote benefits consumer sales customer profitsapplica

45、tionsdellmart & company49q life blood for retailers and suppliersq primary driver of growthq replacement vs cannibalization strategyapplicationsdellmart & company50q select items for replacement low sales matching consumer target marketsq collect customer and competitive dataq run modelq pre

46、sent current sales and net profit projected sales and net profitapplicationsdellmart & company51q most coveted merchandise elementq interacts with pricingq shelf space is greatest item costapplicationsdellmart & company52too littleq consumer cant findq reduced salesq lost salestoo muchq lowe

47、r profitsapplicationsdellmart & company53$-$5.00$10.0012345678facingssalesq excess space does not increase salesq minimum - case plus order cycle minimizes stocking laborapplicationsdellmart & company54q determine minimum units and facingsq identify net profitq test & evaluate alternativ

48、es increase unit sales increase facingsq present current sales and net profit projected sales and net profitapplicationsdellmart & company55q price discussions should not be tabooq price too high lost salesq price too low lost sales lost profitapplicationsdellmart & company56low price image gross margin quality ratiohighapplicationsdellmart & company57q recall up to 200 item pricesq frequently purchas