Presented by Janet Dorenkott [email protected]
440-899-3296 x225
Joint Business Planning & Maximizing Trade Spend ROI
Kristy Garrey,440-899-3296 [email protected]
Janet & Kristy – Bio’s
• Over 20 years of experience in information technology.
• Founded Relational Solutions in 1996 and co-owns with
Rob York.
• Focused on data warehousing, data integration & business
intelligence solutions
• Specialize in the complex issues associated with integrating
point of sale and syndicated data for the CPG industry &
developed applications including POSmart and BlueSky,
designed for handling data complexities unique to CPG
companies.
• Member of Retailwire’s Braintrust
• Founder of the Demand Signal Repository Institute on
LinkedIn.
• Participated in the implementation of over 200 data
warehouse and BI projects for companies that include
Chrysler, Chase, Timken, Xerox, Glaxo, Smuckers, P&G
and many others.
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
Goals for Today
Define what JBPS requirements are today
Discuss the Win/Win Necessity
Explain why Trade Planning is so critical
to JBPS
Describe what retailers expect today
Define the role of TPM/TPO/TPI
Offer case study ROI’s
“Top 10
“Companies
on the
Move”Acquired BlueSky Integration Studio
“Best at integrating POS with
Internal data”
Cleveland
Weatherhead 100
Fastest Growing
Businesses
Oracle Developer of the Year
Data Warehouse & BI Consulting
1996 - 98 1999 - 01 2002 – 04 2005 - 06 2007 - 08 2009 - 10 2011 – 12 2013 2014
BlueSky“Coolest New
Technologies”
DataStage ETL Best ImplementorsAward
Informatica’sPartner of the
Year
Selects BIS to integrate POS & TradeEdge
Selects POSmart to
embed in DSR
Best Software”
Finalist
Company Background
“Data Warehouse of the Year!”
SAP Certification
& Partnership
Best of Cleveland Award
CGT Readers Choice Award
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
What is Joint Business Planning?
Identify Objectives
Level o
f D
iffi
cu
lty
Greatest Impact
New Product Analysis
Prioritize Objectives
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
Trade Spend ROI
Promotion Optimization
Potential Impact of OOS
Understanding Returns
Timeliness of Shipments
Buyer Meetings are not JBP
JBP is More & More Critical
Highest Spend Priority 2nd Highest Corp. Expense
Trade Spend: Typically 15%-20% of Gross Revenue
The Challenge
Time
Time required for data gathering and analysis across all retail segments is next to impossible
Resources & Coverage
How many resources are required to cover all promotions across all retail segments
Data integration
Integrating and aligning at a common level for planning data, shipments and consumption is very complex
No consistency across retailers
Clean historical data
For all data sources
Shipments – palets/cases to eaches
Consumption – syndicated data vs. direct downstream retailer
Trade Plans – spreadsheets or 3rd party application
Where is the COMMON REPOSITORY for harmonized, aligned data for ALL future learnings
Info
rma
tio
n
Time
R I S K
10 Days
Earliest Point when
an Accurate Decision
can be made
Amount of Information
Needed to make an
accurate decision
How Long Does it take to React?
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
Info
rma
tio
n
Time
LOW
RISK
Additional Information
Available when integrated
Amount of information currently
available to make a decision
1 Day
Increased
Employee
Productivity
Earliest Point when
an Accurate Decision
can be made is now 1 day
Faster, More Reliable, Consistent
Information
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
Kroger/Publix
Costco/Sam’s/
Convenience
Shipments
Other POS data
EDI/FF/txt/Access, etc
Wholesaler/Dist
AC Nielsen/IRI/Spectra/
TD Links/RSI/Mkt 6, etc.
Submit Reports
Most time spent gathering disparate data
•G a t h e r i n g
•C l e a n i n g
• I n t e g r a t i n g
•J u s t i f y i n g
?
Inconsistent reports leadto questionable decisions
Target/Giant Eagle
Wal-Mart, Shiloh
Retail Link, EDI/AS2
??
? ?
??
Why You Need To Care About Technology
Publix/Meijer
POSmart
Consistency
• Easy Access to Information
• Improved Productivity
Streamline DataGathering
Synchronize, Integrate & Validate POS
Wal-Mart/Shiloh
EDI /AS2/Retail Link
Promo/Forecasts
Kroger/Publix
Nielsen/Spectra/RSI
Shipping
Sam’s/Costco
Walgreens
IRI/Mkt6/NPD
EDI, AS2
Target/POL/IR
Wholesaler/Dist
Convenience
Productive Meetings
The Importance of Integration & Harmonization
Military,
Distributor
Budget
Nielsen, IRI,
TD Linx, etc.
Shipments
Forecasts
Reports
Scheduled
Shipments
Sources
RetailersWalMart
Food Lion
Costco
Kroger/DunH
Home Depot
Sam’s
Distributors
POSmartIntegrate, Validate,
Synchronize & Manage
BlueSky
Or Other BI Tool
Can feed other systems
POS
Integrator
BIS
EDI, Text, Flat
Files, Access,
Retail Link,
Partners
SAP, JDE,
DB2, Oracle,
JDA Users access
via web
3rd Party Data:
AC Nielsen/IRI
Spectra/NPD
Forecast
Shipments,
Promo, Vendor
TradeSmart
POSmart
An Enterprise Architecture
What is TPM, TPO & TPI?
TPM – Trade Promotion Management
TPM is defined as the upfront process of creating trade promotion
plans
There are many trade planning applications
SAP, Siebel, Oracle, IBM, Excel Spreadsheets,etc.
Typical Users – sales reps, marketing, trade teams
Weakness
Very little exposure to success factors
Relies on sales rep “hunch” factor
Little understanding of actual outcomes
No ROI analysis
What is TPO & are Companies
really doing it?
TPO – Trade Promotion Optimization
The choice of trade promotional activities and their timing are
arranged so the predicted results will progress the achievement of the
company's sales and marketing objectives.
According to AC Nielsen, only approximately 1% of all CPG companies
are implementing TPO
Low adoption rate due to complexities of gathering, harmonizing and
feeding back trade spend information
TPI – Trade Promotion Intelligence
The ability to leverage an enterprise architecture. Automation,
integration and harmonization of various trade components
The intersection of plans, shipments and consumption as it relates
to trade promotions
The ability to accurately analyze the outcomes of trade
promotions and compare to planning expectations across all retail
segments
The ability to understand whether or not promotions were
properly executed and the amount of retail compliance
Leverages a common repository for all historical promotions which
enables multi-year analysis/comparison of trade spend initiatives
Offers the ability to feed results to other systems – planning,
supply chain, predictive, merchandising, etc.
Rule-based system. Allows for a streamlined process where
ROI calculation is consistent and accurate
Process driven capabilities allowing visibility to non-compliant
events
Insight into planned spending to retail execution by event or
product is visible up the hierarchy
Use cost information to understand your true margins and
contribution
Provide visibility to historical pricing to protect against margin
erosion
Knowing “sell-through” and supply chain visibility by
incorporating shipments
Requirements of Trade
Intelligence
• ROI: Measures effectiveness/efficiency of a trade promotion event
• Promotion Effectiveness Index: Which promotions generate the largest
incremental gains
• Incremental Weeks: Promotion generated x additional weeks of sales
• % Lift: Promotion drove x% increase in sales
• Promotion Efficiency: % of promoted volume that was incremental to the
brand/PPG
• % Sell Through: Remaining inventory affects event ROI and forward buy.
• Promo Event Tactics Analysis – Results indicate potential revisions to
tactical mix to improve ROI.
• Purchase Frequency Analysis: Optimize promo event timing, compliment
the product life cycle.
Utilize the results of important KPI’s to positively affect and direct
current and future Trade Marketing.
Shipments are Key!
Relational Solutions, Inc.
Revenue is not the whole picture
Revenue – COGS – Trade Spend = ROI Dollars
What are your initial margins? How far can you afford to discount?
Did having too much cause margin erosion in non promoted weeks? (subsidize
regular sales unnecessarily)
Be Truly Collaborative with your Retail Partners!
Case StudyThe Category Team is presenting its trade
promotion results to the retailer and needs
understand which promotions are working
best and which ones need adjustments. A
report with traffic lighting is needed to easily
highlight areas of importance.
Relational Solutions, Inc.
Relational Solutions, Inc.
Joint Business Planning Sessions requires
Collaboration between retailers &
Manufacturers.
Manufacturer ships cases/pallets/displays,
how does that translate to consumer units?
Is your organization supply side or demand driven?
How much product does your case/pallet/display
hold?
Can the Retailer realistically move that amount of
product in the promotional time period?
Retailer offers consumers many brands and
has limited shelf and back room capacity.
Consideration for Retailer constraints drives
collaborative partnerships
Consumer deserves the freshest product
possible.
Improve JBPS with Retailers!
- Understand ROI for Wholesaler and Retailer
- Know that Events are working for BOTH you and the customer.
- Create Win-Win during JBPS (Joint Business Planning Sessions) with Retailers
Relational Solutions, Inc.
Winner for
Retailer but
not Supplier
Winner for
Supplier but
not Retailer
BlueSky Report for JBPS
What is Baseline?• Baseline is the expected sales in the absence of a particular marketing
variable like price promotion
• To determine the effectiveness of a given marketing tactic, one needs to
first determine the benchmark baseline sales level
• Baseline sales should be relatively stable estimates without wild spikes
in volume for any given period
• Should be extendable to all retail segments (FDM, category killers such
as Home Depot & Lowes, Club Stores, etc.)
• Use of aggregated vs. disaggregated data
• IRI & Nielsen use disaggregated data (ie. store level)
• Most others use aggregated data (chain/banner level)
Baselines
• IRI and/or Nielsen syndicated service
• 3rd party modeling formula
• We use Baseline Sales to determine Incremental
Sales lift based on your actual Total Sales during
the Promo Event
• ROI (Return on Investment) really reflects Return on
Incremental Sales
• Incremental Sales are calculated from Baseline Sales
• There are several methods used to calculate baseline
sales, pick the one you are most comfortable with.
Automated
Harmonization
& Integration
Dashboards&
Analysis
Plan
Improvement
Trade• Shipments• Products• Plans• Syndicated
BlueSky & PromoPro
• Planning Data
• Shipments
• Consumption
• IRI
• AC
Nielsen
• POS
• Master Data
• Forecast Data
• COGS
• Other
Source Data
Complex
Source Data
Integration & Harmonization is Key!
Relational Solutions, Inc.
Integration
Engine
TradeSmart
• ROI
• Lift
• Margin & Contribution
• Full Aligned & Accurate
• Updated as data comes in – no latency
• The TRUTH database!
Syndicated
Data
SAP/ERP/CRM
Retailer POS
OLAP
Cached
Reports
Specialized
Analytics
Mktg/CRM
Supply
Chain
Manufacturing
Forecasts
Demantra
Agility
Manugistics
Feed
Operational
Systems
POSmart
EDSRSource Data
Feed
BI
Systems
POS
Shipments
Supply
Chain
Forecasts
Master Data
Finance
Leveraging the Future
Maximize Value & Feed Information
back into TPM
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
Post Event Report
Relational Solutions, Inc.
Bad For
Customer
Bad For
Manufacturer
Case Study 2
Marketing would like to determine whether
having a product on promotion cannibalizes
other products in its category. To do so, a
Bump Chart is required that depicts both
Volume and Price.
Relational Solutions, Inc.
- Understand if cannibalization is happening across Brands.
- How does price impact volume?
Buns are
cannibalized
when Biscuits
are promoted.
BUSINESS OBJECTIVE
Post Event Bump Chart
Relational Solutions, Inc.
Fine Tune Your Promotions
• Group Promo PG’s into Events• Create event at Retail
• Realign Promo PG’s dates and Events• To align with sales
• Override base and incremental by Event
• Override base/incremental values when needed
• Allocate Spend to Units
• In order to not double count units sold, spend must
assigned to units
Make Your TPI AccurrateEssential workflow interface to
allow fine tuning of promotion
alignment with shipments,
plans and consumption.
What do we do now?
Evaluate Your Needs
What is your annual trade spend budget?
What is your company’s commitment to
improving trade spend ROI?
How much time is spent today evaluating
trade spend?
What is your coverage?
Start with a Roadmap
Start With a Roadmap Understand current methods
Reporting, Data gathering, Number of users
Experience of users, Consistency among teams on metrix
Total number of promotions, Annual trade spend
Historical data available?
Level of granularity for data (consumer units or cases)
Type of data available (plan, consumption, shipment, COGS)
Do all departments speak the same language (Category Management/Sales/Finance/IT)?
Do you speak the same language as your retail partners?
Current PPA metrics used today
How are they calculated
How are they sourced (ie. ERP, Nielsen, IRI, DW, etc.)
Reverse engineer metrics (disassemble and analyze components)
What is current coverage
“Gap Analysis” between current method and “best practices”
Evaluate IT infrastructure
DW, Databases supported, BI Tools, Environmental needs (Dev, Prod, etc)
Staff skills and ability to manage PPA application
Lay out steps and milestones to get to an integrated best practices solution
Expected timeframe, Level of difficulty, Resources needed
Expected ROI and payback period of application
Incremental approach leads to overall data
consistency
A staging area is required to cross reference,
integrate and synchronize data
Star Schema’s are required for certain databases
Architect before loading cubes
Business rules are defined & agreed upon
Single source of information – The truth
database
Knowing what a sound architecture is
Architecture Fundamentals
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
Improved Retailer Relationships
Better recognition and reduction of out-of-stocks.
Improved demand forecasting through more granular demand
inputs.
Improved optimization of supply chain.
Better and timely collaboration with retailer partners, through
shared insight, can be ‘game changing’
Improved success of new item launches at the retailer and store
level
Maximized ROI on trade promotion activity—pre, in-flight and post
event analysis.
Improved product development through enhanced consumer
insight
Better visibility of product movement off the shelf for customer call
centers
Executive management visibility and reporting - strategic
Improved sales and decreased costs
Joint Business Benefits
Property of Relational Solutions, Inc. By Janet Dorenkott February, 2014,
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