“Rolling Out the Plan”

Presenting your case project to your classmates.

Tuesday, April 28

• Bacon, Amber & Sydney• Liquid Fabric Softener, Heidi & Estefany• Brownies, Alicia & Lauren• Pancake Mix, Mason & Britni• Olive Oil, Rachel & Julia• Mayonnaise, Barrett• Cookie Dough, Maggie & Christian• Dishwashing liquids?

Tuesday, April 28

• Contact lens solution—Clayton & Jon• Chocolate chips—Lindsey• Mushrooms—Rachel• Syrup, Marie• Ground coffee—Jonathon• Infant formula, Katy & Catie

Thursday, April 30

• Cat Litter, Nicole & Jared• Orange Juice, Tim & Courtnie• Pasta Sauce, Jason & Becky• Children’s Pain Meds, Lauren, Dae, & Angela• Air Fresheners, Addison & Josh• Shaving Cream, Ryan & Jonathon• Cream Cheese, Ben & Curtis• Salsa, Jen & Lacy

Thursday, April 30

• Peanut Butter, Ryan & Kyle• Cooking Oil, Garnet• Canned Corn, Aaron & Brett• Dryer Sheet, Tyler Duncan• Baby Wipes, Veronica• Microwave Popcorn?

Category Role (Graded Area 1)

• Personal interest in the category

• Size, in U.S. dollars

Why Gin?(Spring 2008)

• Gin accounted for 4.4% of the market share in the liquor industry in 2007.

• That’s $138,739,800!• The suppliers are more in control in the liquor

industry because of the increasing demand for it. As long as there’s excess demand, suppliers will continue to make more and more product.

• No private brands• Not your typical category. Lots of small

manufacturers.

Courtney

Changes in Category

• Have any new suppliers or brands appeared since a recent audit was conducted (semester of last audit)?

• What has happened to prices and a prior group’s gross margin estimates?

• Changes in share of display, at specific stores? Changes were minor or major? Category predictions, its role for the retailer, needs, etc.

The Suppliers (Graded Area 3)

• Introduction to suppliers and their brands

• What did you describe as a dominant brand—why? SKUs? Number of stores stocking the brand? Stocking rate?

• Where there some surprising losers? Any major firms with little shelf space, a single facings, strange or low margins.

SKU’s & The Battle for Shelfspace

• Total SKU #s found: 158 within 11 stores • Firm with most SKUs • Retailer is in control

Brand # SKU % of

Category

Smucker's 51 32.48%

Welch's 14 8.92%

Private Label 41 26.11%

Knotts 10 6.37%

SKU’s

• 94 SKU’s discovered in audit

• Supplier w/the most SKU’s of the identical product/formulation- Ocean Spray had 34 SKU’s- Private Label had 37 SKU’s

This leaves 23 SKU’s for the other five brands found• Adjacencies next to Cranberry Juices: Other Juices i.e. Grape

Juice, V-8 Juices, etc.• Location: in the middle of the aisle

LISTING OF FIRMSDOMINANT BRANDS

• Pinnacle Foods (Duncan Hines)• Lindt & Sprungli (Ghirardelli)• General Mills (Betty Crocker &

Pillsbury)Aldi’s Ozark Natural FoodsHarpsSTRUGGLING BRANDS• Gluten-free pantry• All of the OzarkNF brands

• Martha White• Bakers Corner• Nature’s Path• Dr. Oetker• No Pudge• Arrowhead Mills• Bob’s Red Mill• Cherry Brook Kitchen• Namaste Foods• Market Pantry• Best Choice• Always Save

Stores Audited

• Total number of stores audited by group• Listing of stores• Trade area demographics for specific stores• Anticipated depth for the stores of interest to

group members

• Store without any evidence at category management—no relationship between demographics and category depth

Stores Audited

• Fayetteville– Aldi’s-1– Deal’s Dollar Store-2– Dollar General-1

– Harp’s-39 (deepest)– Ozark Natural Foods-9– Sam’s-1– Target-6– Wal-Mart 6th Street-21

St. LouisSchnuck’s-32Target-8

RogersWal-Mart-25

BentonvilleWal-Mart Neighborhood

Market-20Van Buren

CV’s IGA-27Price Cutter-27Walgreen’s-1

Retailers Audited Store # SKU % of Cat

WM6 60 38.22%

WMJ 82 52.23%

IGA 50 31.85%

SAMS 2 1.27%

TARGET 2 1.27%

ALDI 5 3.18%

WG 5 3.18%

Harps W 45 28.66%

Harps G 68 43.31%

NHM (S) 84 53.50%

NHM (F) 43 27.39%

• Springdale NHM had the most assortment with 53.50% of all the SKU’s found!!

• Many times the PL is placed directly next to the “Grade A” brand to encourage consumers to purchase based on price

Comparison of Store Demographic with Depth, Brands, Margins

• Store A: Younger, more singles, low-income, smaller households:

• Category depth was expected to be…, yet we found…

• We recommend…

• Store B: Higher income, married, middle aged, households larger, with children:

• Category depth was expected to be…, yet we found….

• We recommend…

Battle for Shelfspace

• SPSS Means• Facings/Inventory for four-five stores, by

manufacturer– % of Total Sum(Facings)– % of Total N (number of observations, SKUs)

Jams and JelliesReport

13 16 16 5

22.5% 47.6% 36.8% 100.0%

22.0% 42.1% 33.3% 100.0%

31 17 20 1

51.9% 40.8% 41.2% 50.0%

52.5% 44.7% 41.7% 50.0%

11 5 12 1 1

18.1% 11.7% 21.9% 50.0% 100.0%

18.6% 13.2% 25.0% 50.0% 100.0%

4

7.5%

6.8%

59 38 48 2 1 5

100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

N

% of Total Sum

% of Total N

N

% of Total Sum

% of Total N

N

% of Total Sum

% of Total N

N

% of Total Sum

% of Total N

N

% of Total Sum

% of Total N

MFR #PL

JM Smuckers

Welch

Blackburns

Total

WM6_F IGA_F HG_F Target_F SAM_F ALDI_F

How did your group determine gross margin?

• What brands had the highest costs, what was it costs per ounce?

• What were the estimates for private label, costs per ounce?

• What adjustments for sizes, deals, negative gross margins did you have to make?

• SPSS, 4-5 stores—of interest, showing average gross margin by brand (mean, N)

Gross Margin by Store and Manufacturer

5 15 5 11 14.352 .522 .360 .532 .521

9 10 5 9 10.249 .349 .235 .318 .429

6 9 2 6 8.236 .272 .198 .335 .454

11 1 1 1.289 .536 .459 .536

3 1 2 1 5.221 .306 .085 .306 .473

34 36 15 27 38.272 .406 .267 .408 .477

NMeanNMeanNMeanNMeanNMeanNMean

N-MfrPvt Lbl

J.Smucker

ConAgra

VenturaFoods

ACHFoods

Total

WM6-GM HP-GM WNM-GM PC-GM IGFAY-GM

Report

.576 .568 .650 .637

3 6 2 7

.344 .190 .249 .198

21 24 7 23

.227 .298 .389 .240

1 7 2 3

.195 .342 .499 .367

2 3 2 3

.138 .144 .304

1 1 1

.285 .288 .494 .278

4 6 2 5

.666

1

.345 .275 .372 .307

31 47 16 43

Mean

N

Mean

N

Mean

N

Mean

N

Mean

N

Mean

N

Mean

N

Mean

N

N_MFRPrvt Label

P&G

Unilever Trumball

The Dial Corp

Church & Dwight Co

Colgate Palmolive

Huish Detergnets

Total

WMBR-Gm WMSC6_GM IGAOZ_GM TARG.F_gm

Facings by Gross Margin

Project Paper• Must be a “hard copy” files get too large for

electronic submission, won’t print nicely.• If you’ve modified spreadsheet, submit your

latest to “Digital Dropbox.”• Include ‘original’ SPSS output if creating a

“scoreboard”

Writing

• Follow guidelines for double-spaced number of pages (26 lines, 3-4 paragraphs per page).

• If you’re assigned to write a section—be sure all group members re-read it.

• Include Heading for each of the eight sections and page breaks to separate sections/steps

• Use subheadings within section if discussion in section is more than one page.

Applying Consumer Centric Category Management

• Step One: Understand demographics of your category

• Step Two: Assign a Role Based on Size, Gross Margins

• Step Three: Complete the Store Audit

• Step Four: Create measures for Category Scorecard (Scoreboard)

• Step Five: Strategy-store demographics and assortment depth

• Step Six: Tactics-How was space assigned

• Step Seven: Presentation—recommendations

• Step Eight: Review—what has changed

See You All at Commencement

• Job market is once again, “challenging”• Identify contacts, write letters• Be prepared for that interview, do your

homework:– Vendor/supplier/manufacturer– Retailer/wholesaler

Changing companies is the new career expectation—and it’s easier to find a job when you have a job.

Interviewing with a supplier:• Examine their annual report (10-K)• Memorize their leading brands, are they

“strong?” Talk about their brands.• Examine how their brands are being displayed

in stores, shelf locations, number of facings• Are exclusive brands and unique SKUs part of

the strategy?• How important is private label in their

categories? Why?

Interviewing with a retailer

• Where are their new distribution centers?• Talk about your store audits, share of display

and estimation of gross margins• Shopping goods, prepare a merchandise

budget for a single store’s inventory and purchasing

• Ask how their buyers are trained.