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CONCEPTS

in CatManÂŽSolution

Promotion management Price optimization On shelves availability and distribution Innovation efficiency – New products, new concepts, new space etc. Media effectiveness Profitability


Table of contents

Table of Contents Introduction............................................................................................................................................................. 4 1.0 Concepts in CatMan®Solution closely related to the 4 P’s............................................................. 9 1.2 Promotion management............................................................................................................................10 1.3 Promotion module in CatMan®Solution.............................................................................................10

1.3.1 Promotion planning - Calendar and counter report...............................................................11

1.3.2 Promotion planning - Evaluation and development report...................................................11

1.3.3 Promotion planning - Group by basic report ...........................................................................11

1.3.4 Promotion analyses – Ranking advanced report incl. promotion P&Ls.............................11

1.3.5 Promotion analyses – Zero Sales and OSA report...................................................................12

1.3.6 Promotion analysis – Promotion and baseline sales mix.......................................................12

1.3.7 Promotion forecast – Promotion and product sales forecast..............................................12

1.4 Price Optimization........................................................................................................................................13

1.4.1 Price point sales unit index report...............................................................................................14

1.4.2 Price Point Analyzer report............................................................................................................16

1.4.3 Price Check report...........................................................................................................................17

1.4.4 Compare Chain Price Points report.............................................................................................18

1.5 On Shelves Availability ...............................................................................................................................19

1.5.1 OSA Evaluation – Products report...............................................................................................20

1.5.2 OSA Evaluation – Stores report....................................................................................................21

1.5.3 The OSA Evaluation – Promotion report....................................................................................21

1.5.4 My Store Alert – OSA report..........................................................................................................22

1.6 The Innovation efficiency concept in CatMan®Solution...............................................................23

1.6.1 NPI report...........................................................................................................................................24

1.6.2 The Store Picture Report................................................................................................................27

1.6.3 The Store Event Report...................................................................................................................28

1.7 Media effectiveness concept in CatMan®Solutioon.......................................................................32

1.7.1 Media versus POS report...............................................................................................................33

1.7.2 The Facebook Insight report.........................................................................................................33

1.7.3 Leaflet data module – Nordic FMCG opportunity....................................................................34

1.8 Profitability......................................................................................................................................................35

1.8.1 Profitability report ...........................................................................................................................36

Appendix - Defining potentials using CatMan®Solution......................................................................37

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Introduction

Introduction

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CatManÂŽSolution is designed to handle vast amounts of complex data sets from many different data sources. Our mission is to transform data into knowledge, which can be used efficiently and business oriented at all levels of a company.


Introduction

Introduction A solution built to continuously supporting your business improvement culture

CatMan®Solution service Let our data factory manage, host and service your data sharing process. With a full CatMan®Solution service, we can support and automat the dull parts of the business decision process from strategy to execution within your company. As more and more data, both externally and internally, becomes available for all of us, key decision makers tends to lose the necessary and actionable overview in hundreds of difficult to manage and maintain Excel sheets. At CatMan Solution, we are committed to service your business with decisive and actionable knowledge based on several relevant data sources such as: • Own ERP and CRM data • EPOS data with different granularity and quality • Media data i.e. Facebook, Google, television, outdoor etc. • Demography data on regional and local level • Promotion and leaflet data • Etc. Our mission is to service your business, managing large and complexed data files from several data sources, in a smart and effective way, freeing up your time for taking decisions and execute effectively on your plans. See – Harvard business review – The Upside of Automating Part of Your Job

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Introduction

CatMan Solution could become your “data machine” improving the quality and the speed of your commercial business processes. Our service is built around a series of concepts, linked together and directly related to different levels of the commercial organization such as: • Commercial Management = My Business • Sales Management = My Account and My Sales Force • Marketing and Category Management = My Brands

Concepts in CatMan Solution Business Performance

Business Development

Tracking and analyze your on-going business

Analyze key parameters creating actionable

performance throughout the total value chain.

best practice and understand the effect of

Improved performance

your execution.

Performance Management Status and ranking of results Development, benchmarking and potentials Better and more accurate prioritization

Promotion Management Effectiveness, uplift and baseline analyzes Promotion profitability.

of key resources.

Business profitability

Innovation Efficiency

Wholesaler profitability.

Improving the innovation process

Customer, banner and product profitability.

and new product introductions. StoreEvent and Store Pictures.

Price Optimization Price analyzes Price elasticity

Media effectiveness Media data, TRP analyses, Facebook Leaflet.

On Shelves Availability Estimating the lost value of out of stock

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Introduction

Working guidelines - Introduction CatMan®Solution V3 is a cloud based web app, developed specific to ease your work with several data sources such as POS data, promotion data, pictures and market information – helping you to make fact-based decisions easier. CatMan®Solution V3 is relevant for all functions within your company when it comes to commercial and or planning responsibilities. To make it effective for each employee, we have created different detail levels: a. The Dashboards are designed to give a fast end effective overview of the key parameters. Dashboards could and should be tailor-made to your needs. We are using Power View from Microsoft, which enable us to create “dynamic” models and allowing you to export the Dashboards to PowerPoint (2010) and update the data directly from PowerPoint, when presenting for your colleagues. b. The Standard Reports consist of a series of best practice standard reports, which is always updated and ready to use - even if you are only using a report once or twice a year. The standard reports are used for analyzing development, performance, potentials and planning matters, in a fast and effective way. c. Direct access to the data via Excel – In CatMan®Solution V3, you have directly access to data via pre-defined Excel models that can be sliced, to make your own individual and tailored indebts ad-hoc analysis when needed.

Way of working To guide you through how you and your company could use CatMan®Solution to become more effective, we will address “way of working with CatMan®Solution” in three ways: 1. From strategy to execution:

a. Management process, focusing on a best practice solution in an FMCG-company in Denmark using CatMan®Solution.

2. The commercial manager using CatMan®Solution to support key decisions and growth:

a.

Top-level management using CatMan®Solution.

b.

Key Account management using CatMan®Solution.

c.

Sales management using CatMan®Solution with a field force focus.

d.

Marketing and Category management using CatMan®Solution.

3. Concepts in CatMan®Solution to improve your business:

a.

Promotion management

b.

Price optimization

c.

On shelves availability and distribution

d.

Innovation efficiency – New products, new concepts, new space etc.

e.

Media effectiveness

f.

Profitability

Appendix - Defining potential

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1.0 Concepts in CatMan®Solution closely related to the 4 P’s

1.0 Concepts in CatMan®Solution closely related to the 4 P’s

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1.0 Concepts in CatMan®Solution closely related to the 4 P’s

1.0 Concepts in CatMan®Solution closely related to the 4 P’s Key commercial questions, which needs to be answered in a fast and effective way in a complicated world, focusing on effective and easy to work with concepts in CatMan®Solution: a. Promotion Management b. Price Optimization c. On Shelves Availability and Distribution d. Innovation Efficiency – New products, new concepts, new space etc. e. Media effectiveness f. Profitability

1.2 Promotion management In CatMan®Solution we have a promotion management module, which focus on analyzing promotion strategies, tactics and effectiveness. Our goal is to deliver a service, which allows our clients to continuously focusing on optimizing promotion strategies and tactics, improving their promotion investments, delivering a platform for:

a.

Creating the platform for better and more effective promotion strategies and tactics.

b.

Real opportunity to analyze and understand best practice promotions in “real time”.

c.

Creating true promotion profitability analyses based on both ERP-data and EPOS-data

d.

Improve promotion profitability.

To optimize the analysis, we build the reports on at least three different data sources. 1. The companies own ERP/CRM data

a.

We integrate into most CRM systems - and we have a strategic collaboration with Effect Makers and their BMS solution (Market leader in Denmark) with a ”plug and play” solution.

2. POS data from several data sources

a.

We manage up 15 different POS data sources for some of our clients, but in theory we could manage as many as needed.

3. Leaflet data

a.

We integrate directly with leaflet data – a well-known Nordic FMCG solution.

1.3 Promotion module in CatMan®Solution The Promotion Module V2 consists of 7 promotion reports split into 3 groups: 1. Promotion planning and monitoring

a.

Promotion Calendar

b.

Promotion Counter

c.

Promotion Development

2. Promotion analysis

a.

Promotion Ranking

b.

Promotion zero sales and OSA

c.

Promotion and baseline sales mix

3. Promotion forecast

a.

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Promotion and product sales forecast


1.3 Promotion module in CatMan®Solution

1.3.1 Promotion planning - Calendar and counter report With the promotion calendar and counter report, you get a quick overview on planned, accepted and executed promotions by customer, banner, brands and SKUs, defined down on day-to-day level, when you have access to daily data.

1.3.2 Promotion planning - Evaluation and development report • Key focus brands and SKUs. • Quick and easy top line evaluation of promotion effectiveness and the baseline sales development before, under and after the promotion.

1.3.3 Promotion planning - Group by basic report • Key focus areas of responsibilities, marketing, key account management or field sales force. • Quick and easy top line evaluation of promotion effectiveness.

1.3.4 Promotion analyses – Ranking advanced report incl. promotion P&Ls The ranking advanced promotion report is one the most used promotion analysis reports. It is a detailed analysis of promotion effectiveness analyzing KPIs such as: 1. Promotion effectiveness related to type of promotion (focusing on actionable analysis of type). 2. Promotion lift factor, the added value of running the specific promotion. 3. Customer promotion profitability. 4. Promotion investments. 5. Own promotion profitability.

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1.3 Promotion module in CatMan®Solution

1.3.5 Promotion analyses – Zero Sales and OSA report The Zero Sales and OSA promotion report is analyzing the distribution and zero sales issues related to executing specific promotions.

1.3.6 Promotion analysis – Promotion and baseline sales mix The promotion and baseline sales mix report gives you a running analysis of the total sales development spilt into promotion and normal sales.

1.3.7 Promotion forecast – Promotion and product sales forecast 1.3.7.1 The promotion forecast Based on your planned and accepted promotion, the promotion and product sales forecast report continuously predict your year endresult based on: 1. Year to date actual sales. 2. Estimated baseline sales based on the history up to 52 weeks back. 3. Planned and accepted promotion year to go – type of promotion defining the estimated promotion lift - promotion by promotion.

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1.4 Price Optimization

1.4 Price Optimization

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1.4 Price Optimization

1.4 Price Optimization Managing and optimizing price is another of the key parameters. The way we manage data in CatMan®Solution and the number of data we can analyze, makes what is usually known as relatively expensive analysis, “free of charge”. The key areas of our price analyses are: 1. Price elasticity - We have two reports focusing on price elasticity from different perspectives:

a.

Price point sales unit index

b.

Price point evaluation

2. Price cross elasticity between two channels

a.

Compare chain price points

3. Price check – Focusing on analyze “real selling” prices, without having to do so in store checks.

1.4.1 Price point sales unit index report

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1.4 Price Optimization

In this case, we have the following issues: 1. The general price level is decreasing and the relative sales effectiveness of specific price point deductions is getting less = lower price elasticity 2. The deviation in sales around 22 DKK. is increasing indicating that it is other key parameters than price which define the sales at a prize around 22 DKK. R-squared is a statistical measure of how close the data are to the fitted regression line. It is also known as the coefficient of determination, or the coefficient of multiple determination for multiple regression. The definition of R-squared is fairly straight-forward - it is the percentage of the response variable variation that is explained by a linear model.

Or: R-squared = Explained variation / Total variation R-squared is always between 0 and 100%: • 0% indicates that the model explains none of the variability of the response data around its mean. • 100% indicates that the model explains all the variability of the response data around its mean. In general, the higher the R-squared, the better the model fits your data. However, there are important conditions for this guideline that we will touch upon at this page and the next.

We have used the report to estimate our sales and sales increase in Kvickly to 20 DKK. Everything equal, our sales will increase by 400 pcs (in one week), if we decrease the consumer price from 26 DKK to 20 DKK. Another interesting observation is that last year the same price deduction would have increased sales by 1.300 pcs. Supporting the theory about a decreasing price elasticity in Kvickly.

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1.4 Price Optimization

1.4.2 Price Point Analyzer report Could be used to access price elasticity and to decide on different price tactics depending on the objectives.

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1.4 Price Optimization

In this case, we have 5 price spans varying from 19 DKK to 35 DKK in consumer price. As expected, the lowest price will generate the largest volume between 1.727 and 3.954 units with an average of 2.267 units (standard deviation 567 units). But what is more interesting is that we can identify 2 price spans which seems to be optimal from a profit and growth perspective. a. Price form 28,60 DKK to 31,80 DKK. b. Price from 22,20 DKK to 25,40 DKK. Both intervals have a high price elasticity and the best average weekly profit to both the company and the retailer.

1.4.3 Price Check report Using the Price Check report, you no longer need to do store check to check prices. All you need is to run the report to get a clear and accurate understanding of the prices deviations.

Even though there is an agreed consumer price, it is clear that there are local deviations driven by local activities.

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1.4 Price Optimization

1.4.4 Compare Chain Price Points report The report is used to compare sales effectiveness between different channels at certain price points.

The case above indicates that Kvickly is more sales and turnover effective at certain consumer price levels than Føtex. If you click on Week, you can get directed to the leaflet data module, giving you some promotion leaflet insight to support your conclusions and argumentations.

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1.5 On Shelves Availability

1.5 On Shelves Availability

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1.5 On Shelves Availability

1.5 On Shelves Availability To manage and analyze OSA issues and opportunities in CatMan®Solution, we have developed 4 different reports: 1. OSA Evaluation Products – report 2. OSA Evaluation Stores – report 3. OSA Evaluation Promotion – report 4. OSA My Stores Alert – report To monitor and to track causalities between empty shelves and zero sales situations, we have a smartphone module, which is used to collect relevant in-store information as “supporting evidence”. When it comes to develop actionable knowledge, which could and should be used to continuously improve on shelves availability. Proven cases show that it is possible to increase OSA significantly using the CatMan®Solution model and tool.

1.5.1 OSA Evaluation – Products report The OSA Evaluation – Product report is used to track and monitor development in zero sales days from one period to another. The report is a very effective tool to track, if the company is able to manage and minimize zero sales day on critical SKUs. A zero sales day is defined as an opening day where a product (SKU) is not sold in the store: a. 1 store + 1 SKU + 1 opening day = no sale = 1 zero sales day b. 10 stores + 2 SKU + 10 days = no sales = 200 zero sales days Zero sales days will (probably) never become Zero. Even some of the largest SKUs such as Kærgården, Letmælk, Stryhns leverpostej, Haribo Matador mix, etc., experience zero sales days. Each company should decide an acceptable level of zero sales days, and if that level is exceeded CatMan®Solution is an effective solution to support ad hoc efforts improving the zero sales situation. If needed, CatMan®Solution can support OSA projects with consultants and experiences in how to manage a project and how to make sure that the objectives are reached.

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1.5 On Shelves Availability

1.5.2 OSA Evaluation – Stores report The OSA Evaluation – Stores report rank all the stores, which you have selected to monitor and to work with optimizing OSA. Below you see that zero sales day, unfortunately, have increased for period 1 to period 2, even though there are 424 more zero sales days in total and we see that Kvickly Albertslund have 7 days less zero sales days in period 2.

1.5.3 The OSA Evaluation – Promotion report If you are having issues with zero sales on promotions, the OSA Evaluation Promotion report makes it easy to track zero sales on promotions – you can even track the development from promotion to promotion, if you want to analyze and understand progress and quality of execution.

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1.5 On Shelves Availability

In the reports above, you get a list of stores showing the number of zero sales days per stores during the promotion period. Each red dot is a promotion day with zero sale in the store i.e Kvickly Albertslund having 1 zero sales day being the 20/6.

1.5.4 My Store Alert – OSA report Hereunder and on next page. you find the My Store Alert - OSA report. This report is used to track, manage and develop OSA on local level - region by region - store by store.

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1.6 The Innovation efficiency concept in CatMan®Solution

1.6 The Innovation efficiency concept in CatMan®Solution

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1.6 The Innovation efficiency concept in CatMan®Solution

1.6 The Innovation efficiency concept in CatMan®Solution The innovation efficiency concept consists of 3 different modules and 6 reports, allowing you to manage and analyze the sales effects of innovations: 1. New Product Introduction

a.

The NPI report

2. StoreEvent

a.

Store Event Chain report

b.

Event Store Ranking report

c.

Event Store report

3. StorePictures

a.

Store Picture report

b.

Store Picture Scorecard

Using one or more of the 3 modules, gives you an effective opportunity to track and analyze the quality related to your innovations, whether it is new products, new segments, new categories, new space, new planograms, new creative in-store activities etc.

1.6.1 NPI report Managing and optimizing innovations is key to top management. In CatMan®Solution, we have three specific reports, which could and should be used to track innovation effectiveness at POS = Moment of truth: 1. The NPI report – New Product Introduction 2. Store Event report 3. Store Picture report The NPI report allows you to track and analyze the POS penetration of your new products/concepts etc. in an effective and very fast way. You can monitor and follow the development week by week, with just 2 days of delay, which gives you time to react and adjust parameters before it is too late.

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1.6 The Innovation efficiency concept in CatManÂŽSolution

Launching 3 new SKUs in the category last year in week 17.

25


1.6 The Innovation efficiency concept in CatMan®Solution

New SKUs are not cannibalizing the category – the sales first 10 weeks is “on top”. After three weeks, our 3 new SKUs are out performing the benchmark products in the category. There might be issues with one of the new SKUs? Which is not performing at the same level as the two best SKUs?

The new products are penetrating the chosen banner both fast and effectively.

Full house equal 89 stores selling all three SKU’s every week = 267 - A total of zero sales at 56 in week 27, shows a potential sales increase of 21% or that there probably is one of the new SKUs, are not performing in all stores.

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1.6 The Innovation efficiency concept in CatMan®Solution

We can only identify one large store, where there are real zero sales issues, meaning that they do not carry sufficient stock of the new products. Unfortunately, there is 34 store with relative low sales during the launch period including a high level of zero sales days, meaning that the new SKUs is not driving growth in those specific stores. Relevant actions should be identified to avoid listing in those stores at a later stage

1.6.2 The Store Picture Report The Store Picture Report is a part of the Store Picture module, allowing you to visualize the quality of execution together with several relevant key performance indicators. If and when, you try to do this using Excel and standard “picture management” software, you will end up spending a tremendous lot of time just managing data and pictures – or worst case you will simply avoid doing it because it takes a lot of your limited time. With CatMan Store Picture all you need is to run the reports.

The report above, shows the relevant KPI’s that proves this is a best-case scenario.

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1.6 The Innovation efficiency concept in CatMan®Solution

On the graph below, it is clear that the in-store activity has moved the store from rank 30 to number 2 in the chain.

1.6.3 The Store Event Report The Store Event Report gives the sales management team an effective way to monitor the effect and the value of most kind of innovations. On the next pages, you have a case where a supplier and a banner decided to develop a new and better category “set up” – new adjusted assortment, new space, new in store placement, new price positioning. Before just launching the concept in 400 stores, the concept was tested in 5 representative stores. The store event report and ongoing monitoring was set up in less than 5 minutes, making the analysis and needed facts follow-up a quick and easy task to perform.

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1.6 The Innovation efficiency concept in CatManÂŽSolution

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A SOLUTION TO IMPROVE YOUR BUSINESS

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1.7 Media effectiveness concept in CatManÂŽSolutioon

1.7 Media effectiveness concept in CatManÂŽSolutioon

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1.7 Media effectiveness concept in CatMan®Solutioon

1.7 Media effectiveness concept in CatMan®Solutioon The effectiveness concept consists of 3 different modules, allowing you to manage and evaluate the sales effects of media investments. 1. Media versus POS data report 2. The Facebook Insight report 3. Leaflet Data module

1.7.1 Media versus POS report With the media versus POS data report, you can track and combine POS data and GRP data in the same report, allowing you to track sales effect related to media efforts. At the same time, you get the opportunity to track competitor’s media efforts and their GRP’s influence on your POS.

1.7.2 The Facebook Insight report The Facebook Insight report is a complete Facebook analysis with KPIs such as: 1. Page impressions 2. Frequency 3. Fans 4. Engagement 5. Interactions 6. POS impact 7. Timelines

33


1.7 Media effectiveness concept in CatMan®Solutioon

1.7.3 Leaflet data module – Nordic FMCG opportunity The Leaflet Data module is an integrated module in CatMan®Solution with a full Excel cube. Several key reports links directly to leaflet data, making the analysis much easier and faster - saving a lot time for your sales and marketing people.

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1.8 Profitability report

1.8 Profitability report

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1.8 Profitability report

1.8 Profitability 1.8.1 Profitability report The Profitability report is a typical top management report, giving the top management a fast overview of the business performance relations between the company and its key customers and sales channels. Chain level

Main brand level and down to product

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Appendix - Defining potentials using CatManÂŽSolution

Appendix - Defining potentials using CatManÂŽSolution

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Appendix - Defining potentials using CatMan®Solution

Appendix - Defining potentials using CatMan®Solution How CMS estimate and calculate potential In CatMan®Solution V3, we are using four different kind of potentials: • Sales per 1000 • Sales Value Index • Share of Category • Category Total per 1000 The overall reason to use and spend time on analyzing potentials, is to identify stores that needs focus, because it may be possible to increase sales in these stores. The approach, how to analyze potentials in order to know, how to increase sales differs depending on the potential measure. This will be described in the following sections. It is important to keep in mind that potential calculations are theoretical and case sensitive measures. If a store for example has a “sale per 1000 potential” of 1.000 DKK for a given selection of time period, categories etc., you cannot expect the store to have the same potential in another time period. The measures are based on historical data, but can be used to see a trend and therefore, give you an indication of where you need to intensify your focus.

Sales per 1000 potential Sales per 1000 potential = Sales effectiveness potential. A category focus on optimizing the utilization of shoppers. Sales per 1000 potential calculates the company’s sales potential for a single store, based on a comparison with the chain of Sales per 1000 transactions (“customers”). The measure shows how much more a store would be able to increase its sales, if the store were able to have the same sales per 1000 as the chain/region/market (in the following only chain will be used). The measure will only be calculated, if the store’s sales per 1000 is less than the chain’s sales per 1000. Calculation example: a. = Company’s (our) sale per 1000 in the chain b. = Company’s (our) sale per 1000 in the store c. = Traffic/Transactions in store Potential Sale per 1000 = (A – B) * (C / 1000)

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Appendix - Defining potentials using CatMan®Solution

The example on the last page, shows that Kvickly Nørrebro has a potential of 181.871 DKK, because it’s sales per 1000 are less than the sales per 1000 in the chain. The calculation behind the potential is (The result is subject to minor discrepancies, because of rounding): Potential Sales per 1000 = ((1.051,1 – 846,7) * (889.697 / 1000)) = 181.871 DKK This means that the company, in theory, should be able to increase its’ sales in Kvickly Nørrebro within the chosen period with 181.871 DKK, if it had the same sales effectiveness (sales per 1000) as the chain. Moving the store from rank 64 to average – See model below.

Sales Value Index Potential Sales Value Index Potential = Growth potential compared to same period last year. In short – A supplier focus. Sales Value Index Potential calculates the company’s sales potential for a single store based on a comparison with the total Sales Value Index in the chain. The measure indicates, how much a store’s sales value would had been increased, if the store were able to get the same sales value index as the chain. The Sales Value Index Potential measure is only calculated if the store’s sales value index is lower than the Sales Value Index in the chain. Calculation example: • A = Company’s (our) sales value index in chain • B = Company’s (our) sales value index in store • C = Company’s (our) Sales value last year in store Potential Sales Value Index = C * ((A - B) / 100) There are no reports in CatMan®Solution that shows Sales Value Index Potential, but you can calculate the measure by extracting one of the reports to Excel and make the calculation there. In this example My Stores – Extended has been extracted to Excel from CatMan®Solution. The report does not show sales value last year, but you can get this measure by using Sales Value and Sales Value Index (Sales Value Last Year = Sales Value / Sales Value Index * 100). After the sales value, last year, the formula above is used to calculate the potential. The example above shows that Kvickly Slotscenteret has a sales value index potential of 118.512 DKK. This means that if the store had same sales growth as the chain, it could have sold 118.512 DKK more in the same period.

39


Appendix - Defining potentials using CatManÂŽSolution

The measure has been calculated as follows: Potential Sales Value Index = 1.139.364 * ((94,8-84,4) / 100) = 118.512 DKK. This means that the company in theory, should be able to increase its sales in Kvickly Slotscenteret within the chosen period with 118.512DKK, if it had the same sales growth (sales value index) as the chain. Moving the store from rank 67 to average – See model below:

40


Appendix - Defining potentials using CatMan®Solution

Share of Category Potential Share of Category Potential = Fair Share potential. In short - A brand focus. Share of Category Potential calculates the company’s potential sales by achieving the same market share of the category in the single store, as the company has on chain level. It shows, how much more a store would be able to increase its sales, if the store could have the same market share as the chain. The measure will only be calculated, if the store’s share is lower than the share in the chain. Calculation example: • A = Category Sales Value in store • B = Our share of category in chain • C = Sales Value in store Potential Share of Category = (A * B / 100) – C

The example above, shows that Kvickly Allerød has a potential of 158.568 DKK, because it has a share of category that are less than the market share in the chain. The potential has emerged by this calculation (The result is subject to minor discrepancies, because of rounding in data): Potential Share of Category = (7.437.816 * 12,9 / 100) – 800.548 = 158.568 DKK.

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Appendix - Defining potentials using CatMan®Solution

If Kvickly Allerød were able to increase the share of category from 10,8 % to 12,9 %, it would have been able to sell 158.568 DKK more, within the chosen period. Therefore, the company should be focusing on how to increase the market share in Kvickly Allerød and thereby, moving it from rank 76 to average – See model below:

Category Sales per 1000 potential Category Sales per 1000 potential = The category sales potential in the store. In short – a category focus. Category Sales per 1000 potential calculates the potential sales in a store based on a comparison with the chain of Category Sales per 1000 transactions (“customers”). It shows how much the category would have been increased, if the store’s category per 1000 was the same as the chain’s. Therefore, the measure is only calculated, if the store’s category sales per 1000 is lower than the chain’s category sales per 1000. Calculation example: • A = Category Sales per 1000 in chain • B = Category Sales per 1000 in store • C = Traffic in store Potential Category Sales per 1000 = (A – B) * (C / 1000)

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Appendix - Defining potentials using CatMan®Solution

The example shows that Kvickly Nørrebro has a potential of 1.212.394 DKK, because its sales effectiveness in the category is lower than in the chain (category sales per 1000). The calculation behind the potential is (The result is subject to minor discrepancies, because of rounding): Potential Category Sales per 1000 = (8.151 – 6.789) * (889.697 / 1000) = 1.212.394 DKK. This means, in theory, that Kvickly Nørrebro should be able to increase its category sales within the chosen period with 1.212.394 DKK, if it had the same category sales effectiveness (category sales per 1000) as the chain. Moving the store from rank 65 to average – See model below:

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