joint account plan

JOINT ACCOUNT PLAN

July 2014

Collaborating to increase sales, profit and growth

http://tmcconsultores.com/

I. Introduction

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• Consumer buying attitudes are changing. Although the overall market demand remains stagnant, volumes are shifting from traditional to modern trade channels. With a proliferation of channels, consumers want the convenience of buying the right item at the right time regardless of the means of purchase—and value continues to remain uppermost in their minds.

• Other consumer trends are taking hold; an increasing number of consumers are seeking green products and packaging. And brand loyalty is eroding as the number of private label purchases grows. Although a strong contingent continue to shop for leisure, many more consumers are making targeted purchases.

• Clearly, consumers are shopping across a variety of channels to suit their circumstances, special interests and wallets, making it more difficult for both retailers and consumer packaged goods (CPG) companies to predict consumer needs and behavior.

• To cope with these changes, retailers and CPG companies have increased investments in trade initiatives and efficiently optimized trade spend. Yet the benefits these tactics can bring are limited if each company looks at its own sales and revenue results in isolation.

• TMC believes that if retailers and CPG manufacturers are to achieve high performance in the new consumer landscape, they must redefine the rules of the game, forming an integrated view of the opportunities and challenges before them and pushing the boundaries of collaboration to unprecedented levels.

• The first step in doing so is to work together at the strategic business planning stage to put the consumer at the center of their business, get closer to buyers and attain greater knowledge of consumer behavior.

II. Project Objectives

Identify the maximum Business Potential by Category and Store

Improve understanding of the account business dynamics: shopper behavior, category performance and store operation.1

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3 Strengthen business relationship between Supplier and Account by driving a joint approach for the plan development

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III. Methodology and Action Plan

The project development is carried out through 5 stages, in which TMC consultant team interacts closely with the Account, Supplier and Store teams.

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Knowledge and Information gathering

Store Audit by Category

Opportunities and Critical Issues Map

References by Category

Strategies and Action Plan by Category

Joint Account PlanJAP

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Stage I. Knowledge and Information gathering

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CREATING COMMON GROUND TO SEIZE MUTUALLY BENEFITIAL OPPORTUNITIES


At this stage, the consulting team will map all available documents, reports and systems with information about the following areas:

• Account: current store´s segmentation, retail strategy, category guidelines, operational guidelines, total sales and by category, gross margin per category, etc

• Consumer Understanding by Category: who consumes, when, what, where, why and how often. Typically this information is provided by Suppliers.

• Industry/Market trends by Category

• Shopper Understanding: any recent information about profile, when do they shop, how often do they shop, destination vs impulse categories, shopper decision tree by category, length of shopping visit, shopping sequence. Average Ticket Value and Quantity.

To achieve this goal, this stage has been divided into three phases, which are described below:

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Kick Off & Team Conformation

Approach key sources of information

Knowledge and Information GAPS


TMC offers 3 solutions to update/enrich Shopper and Category Dynamics in Retailer:

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SHOPPER BEHAVIOR BY CATEGORYQUANTITATIVE INTERVIEW

1. Update Outlet Segmentation: • Shopper Profile, Mission & Frequency• Destination vs Impulse

2. Increase Sales and Value:• Missing products, Shopping barriers,

competitors

3. Retail Communication effectiveness: ad and copy awareness. Buy or Not.

4. Promotion Effectiveness: Mechanics vs Incentive. Net impact and ROI.

• Decision Tree, Barriers, shopping time, sequence and flow.

15min Interview/25 stores/30 per store/5 cities

125 observations/25 stores/5 per store

BASKET ANALYSIS

• Avg Ticket Value, Sales concentration by working period, by week days and by Category. Trends

• Product correlation and Sales Concentration: top selling and most profitable products. Week day, Working period

25 stores/1 day per month - week vs. weekend/ 3 monthsSTORES x CITIES:

BH 2

CTB 3

RJ 5

PAL 3

SP 12


TMC will contribute during the first phase with some relevant information for all players:

BASKET DRIVEN STORE SEGMENTATION IN STORE TRAFFIC FLOW

Most visited areas, corridors and category sequence

ILLUSTRATIVE

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TMC will contribute during the first phase with some relevant information for all players:

SHOPPER BEHAVIOR AT THE CATEGORY SECTION

38% 49% 85% 92%…of shoppers go through the beverage section

…of those who goes through…stop to take a look at the section

…of those who stop by, interact with the planogram

…of those who interact with the planogram end buying

Source: Shopper Insight 2013. Argentina -Brazil-Colombia-México-USA

ILLUSTRATIVE

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BETTER UNDERSTANDING OF STORES OPERATION TO MAXIMIZE FIT OF SOLUTIONS

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Stage II. Store Audit by Category


The objective is to provide enough information to identify critical opportunity areas in the way stores are working per segment and Region.

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Definition of stores and coordination of visits

Store AuditAnalysis, Consolidation of results

• Financial reports to be sent to central office

• Store Audit at 10 stores to implement Operational Assessment Tool (OAT)

• Interviews with Store Mgr and Staff

• Audit a sample of stores per segment and regions

• Cost structure and distribution.• Financial performance• Store organizational structure

• Management and store process• Field force support tools and KPI´s• People: objectives, profile, skills and

capabilities by role• System & Information: quality and

quantity of information

Tools, Skills &

Capabilities

Organizational Structure

In Store Operation

Marketing Programs

Operational Processes &

KPI´s

Operations & Logistics

Information System

The analysis and consolidation of the results will be presented by business variable to facilitate understanding and implications by function. TMC will define the initial set of Issues & Opportunities to be prioritised in the next stage.

IN STORE OPERATIONS

ISSUES & OPPORTUNITIES

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A set of Metrics (Performance Indicators) will be compared across regions and will be used to set National Objectives. A highly effective Joint Account Plan must be supported by an enriched, comprehensive view of the joint commercial profit and loss data, including brand and category classification, on-shelf prices, sell-out data and other store specific KPI’s

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ILLUSTRATIVE EXAMPLES:

ILLUSTRATIVE

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SECURING COMMITMENT FROM ALL SIDES ON MOST CRITICAL BUSINESS ISSUES

Stage III. Opportunities and Critical Issues Map


In this phase TMC will collate and integrate the point of view of most relevant players in the Retail Business Operation:

ACCOUNTSUPPLIERS

STORE

TMC will conduct in-depth interviews with Store Managers

and Staff in audited stores

TMC will coordinate individual meetings with key players from Central

Office (Marketing, Retail Operation, Finance) and One Group session in SP

with Field Force team

TMC will hold conversations with Industry leaders from most

relevant categories

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Results will be presented in simple charts to facilitate understanding of Business Implications:

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ILLUSTRATIVE

KEY CATEGORIES PER STORE CATEGORY SALES TREND

+ =

CATEGORY PRIORITIZATION


Results will be presented in simple charts to facilitate understanding:

ILLUSTRATIVE

SALES CONCENTRATION SALES CORRELATION BY TICKET

+ =

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Results will be presented in simple charts to facilitate understanding:

ILLUSTRATIVE

NET INCREMENTAL RESULTSOPPORTUNITY AREAS

• INVENTORY• ASSORTMENT• PROMOTIONAL

ACTIVITIES• PLANOGRAM• OPERATIONAL COSTS• PRICING

+ =

FULL POTENTIAL RESULTS

Readiness

Urg

ency

Readiness vs Urgency vs Business Impact

Prioritization will allow to focus on most relevant issues during the planning period.

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BRINGING ALTERNATIVE SOLUTONS TO CRITICAL ISSUES BY CATEGORY

Stage IV. International References by Category

Stage IV. International References by Category

In this phase TMC will run a Desk Research for top priority issues by category and store and store segment. It will include C-Store good retail practices and experts recommendations.

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Category Management: role of each category, sales & profit representation, space, planogram and location. Strategic direction by Category

Big Data and Knowledge Management

Store Performance: margin, profit, rotation, growth, Ticket Value, # of Tickets, Debts, Cash Flow, etc

Shopper Activation and Loyalty

People skills and capabilities

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Stage V. Strategies and Action Plan by Category

DEFINING A COLLABORATIVE PLAN TO DELIVER AGREED BUSINESS OBJECTIVES


At this stage, the consulting team will run a 1 day WORKSHOP with Account and Supplier to agree on realistic targets, strategies and Plans for the most critical areas to be covered in the followed 2-3 years period:

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ACCOUNTSUPPLIER

STORE

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Core initiatives involving all players, such as Trading terms and conditions, Category Captaincy, Price, Assortment per store, Functional Merchandising, etc

Corporate Plans affecting Store’s operation and logistics: Franchise model, ERP Systems, Policies, People profile and skills, Cost Reduction programs, etc.

Actions that can be agreed and coordinated directly between Stores and Suppliers such as Staff Training, temporary merchandising, etc

Centrally driven plans between Retailer and Suppliers such as Bonus, R&D investment, etc

Supplier/Industry specific strategies and plans to address Portfolio, Brand, Product performance at the Account (collated in previous interviews by TMC)

Account Corporate strategies and actions that can affect Retail Business such as Merge and Acquisition, change in the Organizational Model, Corporate investment priorities, etc

Franchisee specific actions and plans

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Identify areas of potential collaboration agreements, objectives, strategies and plans


Each Plan will have clear Objectives, Roles, Responsibilities and Deadlines

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Understanding that Full Potential of each topic was previously defined as Business Impact, at this stage it will be defined the size of the opportunity to be set as objective for the planning period.

1. OBJECTIVES

2. RESPONSIBILITIESBy using the TMC model, it is easy to assign and distribute responsibilities between Store, Central office and Suppliers for each task.

3. DEADLINESDeadlines should be tied together with variable compensation and negotiation terms and conditions.

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IV. BENEFITS OF JOINT PLANNINGThe more closely aligned and targeted the planning, the easier the execution and monitoring and the better the results and insights. Joint Account Planning offers a number of tangible and intangible benefits that impact Retailer and Top Categories business performance.

INTANGIBLE BENEFITS

1. Increased transparency and visibility of business

2. Increased trust and better relationship

3. Joint plan ownership responsibility

4. Shift from data reconciliation to analysis and strategy execution

5. Reduce negotiation time and improve quality of agreements

TANGIBLE BENEFITS

1. Joint event development

2. Increasing planning effectiveness of Innovation launches

3. Improved responsiveness to opportunities

4. Increase sales forecast accuracy

5. Optimize spending of trade spending levers

6. Out of Stock reduction

DRIVING SALES AND OPERATING MARGIN

SUMMARY


Project Team – JUAN MANUEL DOMINGUEZ

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• Consulting– Since 1996 is CEO of TMC Consultores, based

in Valencia, Spain.

Extensive Experience across:

– Consumer Products and Retailers– Latin American markets– End Market, Regional and Global structures– Trade channels with focus in Convenience

stores.

Key Specialities include:

– Sales and Distribution models– Trade channels development– Trading terms and conditions– Retail Operations and Finance– Optimization of organizational structures

• Line Management and Background

– British American Tobacco (BAT) 7 years– VP Business and Professor EEG– Professor of Post graduation in Marketing –

UNIMET– Professor IESA: Key Account Management, Trade

Marketing and Sales Planning– Bachelor of Science in Arizona State University –

Marketing and Business AdministrationExtensive functional and line experience in Marketing and Sales:

• Group Brand Manager – Seagram’s and Mavesa, Venezuela

• Trade Marketing Development Manager – British American Tobacco, Venezuela

Speaks Spanish (native tongue) and English fluently

Project Team – CARLOS ALFONZO

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• Consulting– Associate Consultant of Kantar Retail, Grupo

361 USA and Compass Mkt since 2011

Extensive Experience across:

– Tobacco and Beverage Industry– Latin American markets– End Market, Regional and Global structures– Trade channels with focus in Convenience

stores.

Key Specialities include:

– Shopper Marketing and retail communication– Category Management– Strategic Planning and Insights– Customer Segmentation– Negotiation

• Line Management and Background

– British American Tobacco (BAT) 16 years– BA Industrial Engineering (UCAB) with Master in

Marketing (IESA)

Extensive functional and line experience in Marketing and Sales:

– Regional Business Development and Key Account of Americas – Brazil

– Head of Global Customer Engagement - UK– Head of International Brands - Brazil– Head of TMD, Strategic Planning and Insights -

Argentina– Head of TMD – Venezuela

Speaks Spanish (native tongue), English and Portuguese fluently

THANKS
