Trade Marketing Flashcards

Category Assessment: Category assessment model

• Sales Value can be calculated as: Sales Value = Units/Volume * Price.

  • Price elasticity is key to influencing sales.
    • Differentiated products can be priced higher.
    • Undifferentiated products may use lower prices.
    • Trading up techniques can increase unit/volume sales and average price.

• Sales Value can also be calculated as: Sales Value = No. of shopping trips * Average Spending per trip

  • Main, distress, and top-up shopping trips are common.
  • Increasing main shopping trips can raise average spending.
  • Trading up can increase spending regardless of trip type.

• Category Sales can be calculated as: Category Sales = No. of shopping trips * Category Incidence * Average Spending per trip

  • Higher category incidence leads to higher expected sales.

• Category Sales can also be calculated as: Category Sales = Category Penetration * Shopping Frequency * Average Spending per trip

  • Retailer penetration and shopping frequency are factors.

Models vs Strategies vs Decision Making

• Total Store Opportunities:
  • Traffic building: Increase shoppers & visit frequency.
  • Transaction building: Increase transaction size or frequency.
  • Profit building: Increase profit per basket.
• Generic Category Strategies:
  *Traffic building through conversion: Convert more shoppers to the category & more often
  *Category profit: Increase profit of the category
• Strategies include:
  • Inducing category trial.
  • Optimizing shelf layout for higher-priced items.

Category Quadrant Analysis

• Quadrants:
  • Winners
  • Opportunity Gaps
  • Sleepers
  • Question Marks

Category Decision Matrix

• Strategies for each quadrant:
  • Winners: Maintain planograms, add fast-moving SKUs, develop sub-segments.
  • Opportunity Gaps: Review product mix, find emerging sub-segments, replace slow SKUs.
  • Sleepers: Review product mix, replace slow SKUs, reduce assortment/shelf space, increase gross margins.
  • Question Marks: Review product mix/pricing/package types/OOS levels, apply trading up.

Category Assessment through Consumer Decision Tree

• Example: Segment Share Units & Evolution
  • Retailer Vs Market data

Performance Measurement (KPI's)

• Why measure performance?
  • Quantify opportunities.
  • Align retailer and supplier goals.
  • Ensure strategy achieves targets.
  • Evaluate category contribution.
• What should performance measures be?
  • Specific, Measurable, Achievable, Realistic, Timely (SMART).
  • Reflect interests of consumer, supplier and retailer.
  • Standardised for different categories.
  • Give overview of full process performance.
  • Compatible with corporate strategy.
• 4 Types of Indicators:
  • Consumer Data: Understand consumer perception and behavior.
    *Examples include Penetration, Frequency, Loyalty
  • Market Data: Measure competitive advantage.
    *Examples include Percentage of Market Availability, Share of Segment Turnover
  • Supply Chain Efficiency: Improve processes.
    *Examples include Stock Value, Stock in Days, Out of Stock
  • Financial Indicators: Easy to identify.
    *Examples include Retail turnover per SKU, Retail profit per SKU, Gross Margin Return
• Examples of measurements:
  • Consumer Behavior, Retailer, Market, Productivity with current an target data.