Driving Business The CEO Challenge

1
REINVENTING CATEGORY MANAGEMENT
T A K I N G T H E R I G H T S T E P A T
T H E R I G H T T I M E
Presented By Sonny King, CEO
IRI Summit - March 1, 2005
2
REINVENTING CATEGORY MANAGEMENTTODAYS AGENDA

• The Current Situation
• What Comes Next
• The Advantage Perspective

3
THE SEARCH IS ON FOR THE NEXT BIG THING

• The Evolution of the Next Big Thing in CPG

THE CURRENT SITUATION
4
WHILE THE SEARCH CONTINUES, CATEGORY MANAGEMENT
REMAINS A RETAILER PRIORITY
Likely Action on Category Management (Grocery
Channel Retailers)
Very Likely
Likely
Action Index
Not Likely
Issue Ranking 2 2 3 5 2
Source Annual Report of the Grocery Industry,
Marketing Guidebook 2000-2004
THE CURRENT SITUATION
5
SO, MANUFACTURERS CONTINUE TO INCREASE THEIR
INVESTMENTS IN CATEGORY MANAGEMENT
Overall Category Management Investment ( of
Surveyed Manufacturers Who Increased)
Annual Sales
Source CMS Consulting, Sales Trac 2004 Annual
Benchmarking Report
THE CURRENT SITUATION
6
NEVERTHELESS, CATEGORY MANAGEMENT MUST ADAPT TO
ADDRESS TODAYS MARKET PRESSURES
THE CURRENT SITUATION
7
ADVANTAGE HAS BEEN DEEPLY INVOLVED WITH CATEGORY
MANAGEMENT FOR SEVERAL YEARS

• The Category Management Best Practices Project
• (mid-1990s)

Collaborative Trading Partner Relationships
Scorecard
Strategy BusinessProcess
Information Technology
Organization Capabilities
The Partnering Group Advantage Sales and
Marketing
THE CURRENT SITUATION
8
THERE ARE SEVERAL PATHS INTO THE FUTURE, BUT ONLY
ONE THAT REALLY MAKES SENSE

• The Evolution of Category Management

Total Consumer Management
Total Consumer Management
Total Aisle/Store Management
WHAT COMES NEXT
9
STORE-LEVEL CATEGORY MANAGEMENT WILL REQUIRE MORE
ROBUST ANALYTICAL CAPABILITIES

• The Challenge of Store-Level Category Management

From Chain-Wide
WHAT COMES NEXT
10
STORE-LEVEL CATEGORY MANAGEMENT WILL REQUIRE
WORKING SMARTER AS WELL AS HARDER

• Matching a Category Plan to a Stores Potential

High
Sales Performance
Low
Low
High
Sales Potential
WHAT COMES NEXT
11
THE REWARDS OF STORE-LEVEL CATEGORY MANAGEMENT
CAN BE VERY SIGNIFICANT
Store-Level Value Chains
SalesPerformance Analyses
Sales Performance Diagnostic
On-Target Merchandising Strategies
Maximized Business Gains

WHAT
WHY
HOW

WHAT
WHY
HOW

WHAT
WHY
HOW
WHAT COMES NEXT
12
GOING TO STORE-LEVEL REQUIRES 360o OFBEST IN
CLASS RESOURCES
360o of Critical Resources
People
Hardware
Data
Software
WHAT COMES NEXT
13
SALES AND MARKETING AGENCIES WILL BE THE ONES TO
SHOULDER MUCH OF THE BURDEN
Store-Level Category Management
People
Hardware
Data
Software
WHAT COMES NEXT
14
LEADING THE WAY TOWARDS STORE-LEVEL CATEGORY
MANAGEMENT IS CONSISTENT WITH ADVANTAGES MISSION

• Our Mission

THE ADVANTAGE PERSPECTIVE
15
ADVANTAGE HAS THE SCALE THAT LEADING
MANUFACTURERS NEED AND EXPECT
Our Team

• 1,200 Clients
• 40 Billion Sales

THE ADVANTAGE PERSPECTIVE
16
AMONG OUR CLIENTS ARE LEADING MANUFACTURERS IN
ALL PARTS OF THE STORE

• Leading Clients

THE ADVANTAGE PERSPECTIVE
17
WE OFFER OUR CLIENTS A COMPLETE PORTFOLIO OF
VALUE-ADDED SERVICES
CUSTOMER INTERFACE
CATEGORY MANAGEMENT
BRAND MANAGEMENT
CONSUMER MARKETING
RETAILSERVICES
SUPPLY CHAIN
FINANCIAL MANAGEMENT
ADMINISTRATION
THE ADVANTAGE PERSPECTIVE
18
ADVANTAGE HAS A DECISION SUPPORT PLATFORM BUILT
WITH BEST IN CLASS PARTNERS LIKE IRI
Advantage Technology Partners
THE ADVANTAGE PERSPECTIVE
19
OUR PEOPLE ARE ALSO BEST IN CLASS ACROSS OUR
PORTFOLIO OF SERVICES
Advantage Experienced Knowledge Workers
THE ADVANTAGE PERSPECTIVE
20
OUR STRONG RETAILER ALIGNMENT ENABLES US TO TURN
IDEAS INTO RESULTS
Advantage Strong Retailer Alignment
THE ADVANTAGE PERSPECTIVE
21
WE ARE COMMITTED TO INTEGRATING THE CATEGORY
MANAGEMENT PROCESS INTO OUR KEY BUSINESS FUNCTIONS
Marketing Supply Chain TPM
THE ADVANTAGE PERSPECTIVE
22
THE SEARCH FOR THE NEXT BIG THING CAN NEVER STOP
The Evolution of the Next Big Thing in CPG
THE ADVANTAGE PERSPECTIVE
23
ADVANTAGE IS READY TO TAKE CATEGORY MANAGEMENT TO
THE STORE LEVEL AND MAKE IT WORK

• The Right Focus
• The Right People

• The Right Resources
• The Right Stuff

THE ADVANTAGE PERSPECTIVE
24
Improving Your PoweRanking

• February 28, 2005