Distributor Business Planning

April 2011
Distributor Business Management

INTRODUCTION

2
This Seminar brought to you by:

In support of the Kraft

Higher Purpose to

3
 Our Higher Purpose

4
 Our Positioning

At Kraft Foods delicious

is our difference!

We begin with our consumers.

We make delicious foods you

can feel good about.

We believe we can make a

delicious difference,
everywhere.

5
 Our Values

We understand that actions

speak louder than words,
so at Kraft Foods:

We inspire trust.
We act like owners.
We keep it simple.
We are open and inclusive.
We tell it like it is.
We lead from the head and the heart.
We discuss. We decide. We deliver.

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Irene just announced 2011 – 2013 Strategies
 An Amazing Brand Portfolio

• 11 brands with more than $1 billion in revenue

• 70+ brands with more than $100 million in revenue
• 40+ brands over 100 years old
• 80% revenue from #1 share positions

8
 Fast Facts

Approximately $48 billion in revenue

World’s #2 food company, #1 in North America

#1 in global confectionery and biscuits

Sales in 160+ countries, Operations in more than 70 countries

Approximately 140,000 employees

Donated more than one billion servings of food since 1997

9 Figures are for the combined Kraft Foods and Cadbury businesses
 The New Kraft Foods

More than half of our

Confectionery and Snacks
business is outside
now make up the majority of
North America
our portfolio*

Grocery
8%
Convenient
Meals Developing
10% Confectionery Markets
30% 26%
Cheese North America
14% 49%

Beverages Snacks Europe

17% 21% 25%

* 2009 Pro Forma net revenues $48 Billion. May not add to 100% due to rounding.
Pro Forma amounts are based on the acquisition of Cadbury and the divestiture of the Pizza business.

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Vision 2013

Kraft Foods – The Best Sales

Company Across Developing
Markets Food Industry
11
 Higher Purpose
Make Today Delicious
Aspiration Win in Developing Markets through Snacks Leadership

Strategies Focus Glocal People

• 5 Categories Chocolate, Gum &
Candy, Biscuits, Coffee,
Powdered Beverages
• 10 Power Brands Jacobs, Tang,
Lacta, Cadbury, Milka, Oreo,
Club Social/TUC, Trident, Halls,
Tiger/Biskuat
• 10 Priority Markets Brazil, ANZ,
Russia, Mexico, China, India,
Ukraine, Poland, S. Africa,
Indonesia
• Innovate behind profitable
growth platforms
Leverage best of global & local: • Build diverse leaders who
• Global Category Teams: Build transform the business through
innovation pipeline, strengthen collaboration
brand equity through deep • Deepen category expertise
consumer connections • Foster entrepreneurial
• Sales: Invest to drive best leadership
practices across markets
• Drive productivity with end-to-
end global best practices
• Use benchmarking insights to
reduce non-sales overhead
growth
• Act on global societal issues
(H&W, Sustainability)

Create a Performance-Driven, Values-Led Organization

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Six Sales Strategies

1. Play in Winning Segments

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2. Win at Headquarters

3. Win In Store

4. Build and Maintain Talent Pool

5. Effective and Efficient Structure

6. Move Winning Ideas Quickly

Winning Strategies

13
Four Focus Areas

Step-up the Sales Organization

by focusing on four Key Areas 1
Talent Development
1. Talent Development
BEST
Sales
2. Point of Buying Excellence Company
4 In 2
Food
3. Distributor Management Joint Business Plans Industry POB Excellence

4. Joint Business Planning

3
Distributor Mgmt

14
Timings

Section Topic
Time Topic

09:00 Review Day 1

09:00 Welcome & Overview
09:15 Action Planning
09:15 Introduction
11:00 Presentation Preparation - SSP
09:30 DBP Process & Tools
12:30 Lunch
10:15 DAD Assessment Outputs 13:30 Objection Handling
11:15 Break 15:00 Final Presentations
12:15 5C/5S Assessment 16:30 Close
12.30 Lunch
13.30 Opportunity Identification – SWOT
Opportunity Identification – ROI
15.30 Tool
17:30 Close
Introductions

Your
Name

Your Role

1
unusual
fact
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
Distributor Business Planning

Distributor Business Planning Start with next year’s target

Process & Tool
Distributor Business Planning

Distributor Business Planning Start with next year’s target

Process & Tool

Assessment

DAD Assessment
& Performance Assesses current
Summary Performance
Identifies what is / is not
5C/5S & Analysis
driving the business

Understand
current Position
(& the GAP)
Distributor Business Planning

Distributor Business Planning

Process & Tool Start with next year’s target

Opportunity Plan
Assessment
Identification Development

DAD Assessment
Priority Action
& Performance SWOT Analysis
Plan
Summary

Issue &
5C/5S & Analysis Opportunity ROI Tool Analysis
Identification

Understand Identify the Build the plan to

current Position Opportunities (& excite the
Risks) to fill the distributor and
Gap implement with
the retailer
Distributor Business Planning

Distributor Business Planning

Process & Tool Start with next year’s target

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification

Understand Identify the Build the plan to Plan how to

current Position Opportunities (& excite the present the plan
Risks) to fill the distributor and
Gap implement with
the retailer
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
 April May June July Aug Sep Oct Nov Dec

AGREE
STRATEGY REVIEW
COLLECT INFORMATION &
& &
& EXECUTE
ANALYSE ALIGNMENT REFINE
PLANS

Distributor or
Distributor Develop
Group Level Review existing Distributer distributor Strategy Lock plan and Sell
Business Plans
By DM / DE
Bottom-up Planning Review/Refine,
for Y+1 Manage opps and risks

National Gap Analysis

Level

External Reviews: 4C’s;

SD and TMM Consumers, Category Top-down Review/Refine,
Consolidation Target Setting Manage opps and risks
distributors, Competitions

Sales Strategy
Sales AOP

Marketing
Internal Planning & On-going brand innovation, demand planning, & financial planning
Finance
Communication:
CS&L Marketing, Finance, CS&L
Local DBP Tool Overview

Kraft Foods - Distributor Distributor Name

Joint Business Plan
1. JBP

Customer Profile
Action Plan
5 C's
Supply Chain
4. Corrective 2. Execution &
SWOT Customer Actions Tracking
Scorecard
SWOT Kraft
Bridge

Strategies Executive
Summary

3. Evaluation

Kraft Foods Sales Manager:

 Back to cover Account Profile - General
I. General Information II. Logistic Capability
Local Mailing Address List of Address
Local Tel No Electronic PO/Invoicing
IM's Data Available
Purchase Data
Order Frequency
Affiliation / Owner Full Trucks
Cost to Serve

V. Key Performance Measures

2009 2010 YTD % Channel
III. Coverage (# of outlets serviced) TOTAL OUTLETS
2009 2010P YTD Actual AV Calls's /week #DIV/0!
Outlet Types AV Orders /week #DIV/0!
A. #DIV/0! % Strike Rate #DIV/0!
B. #DIV/0! Stores with Key Brands #DIV/0!
C. #DIV/0! Distribution #DIV/0!
D. #DIV/0! Permanent Display #DIV/0!
Georgraphy Covered GOLDEN STORE
Key SKU Distribution
1 #DIV/0!
2 #DIV/0!
3 #DIV/0!

VI. Organization Structure

Name Designation / Role Tel/Email Responsibility

Owner
Management

Sales Supervisor
Kraft D.M
No. Sales Force Dedicated

VII. Sales Training Log - Session Run 2010 Training Hours

2009 2010 % Var
Actual Plan P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 Total
Distributor Management #DIV/0!
Sales Supervisors #DIV/0!
Sales Reps #DIV/0!

TOTAL 0 0 #DIV/0!
3- SWOT Analysis
SWOT on Distributor Capabilities

STRENGTHS KEY LEVERAGE POINTS WEAKNESSES

internal

THREATS BUSINESS IMPLICATIONS OPPORTUNITIES

external
Back to cover

9 - Planning - Revenue Bridge

Revenue Bridge
XXX
XXX XXX XXX
XXX

XXX
XXX
XXX
XXX
XXX

Cannibal. due Improved New Distribution Price

to NPD product avail. Distribution of Coverage Promotion increase Objective
LE 200X Market Trends launch NPDs launch & CFR SKUs Expansion impact impact 200Y
Distributor Business Planning
Consists Of Three Steps

Step 1: Step2: Step 3:

Opportunity Plan
Assessment Identification & Develop
Quantification ment
 Step 1: Step 2: Step 3:
Opportunity
Identification Plan
Assessment & Development
Quantification

Assessment Overview
• Purpose: To conduct a comprehensive distributor analysis to
identify what’s working, what’s not working, and what’s needed
to formulate an annual distributor plan

• Inputs: All data relevant to assessing overall business

performance (share, volume, shipments) and retail tactics
(assortment, price, promotion, presence)

• Expected Outcomes: A summary of distributor lessons learned

both overall and by retail tactic
 Step 1: Step 2: Step 3:
Opportunity Plan
Assessment Identification Development
& Quantificat
ion

Opportunity Identification & Quantification Overview

• Purpose: To identify and quantify key distributor opportunities
as inputs into the annual distributor business planning process

• Inputs: Lessons learned from step 1 assessment phase

• Expected outcomes: A fact-based understanding of what

activities drive the distributor’s business and the business
impact to KI
 Step 1: Step 2: Step 3:
Opportunity
Identification Plan
Assessment & Development
Quantification

Plan Development Overview

• Purpose: To develop an annual distributor business plan which
aligns KI objectives and strategies with those of our distributor’s
to drive profitable business growth

• Inputs: Opportunities identified and quantified in step 2 along

with KI objectives and strategies

• Expected Outcomes: A distributor business plan that is aligned

with distributor and KI requirements to drive profitable growth
5C Assessment Tool
Back to cover 5 C's Analsyis
 2 way SWOT Analysis

3- SWOT Analysis
SWOT on Distributor Capabilities

STRENGTHS KEY LEVERAGE POINTS WEAKNESSES

internal

THREATS BUSINESS IMPLICATIONS OPPORTUNITIES

external
 Joint Business Strategies
5 - Joint Business Strategy
Growth Plan

Kraft Issues / Needs Joint Business Strategy TD Issues / Needs

 Action Plan

6 - Action Plan
Sales / Growth Action Plan

Joint Business Strategy Joint Action Plan Timing Responsibles Resources

Kraft Foods:

Distributor:
Annual Promotional Calendar
Back to cover
Annual Promotional Calendar

Annual Promotional Calendar

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 TOTAL
Promotional Platform Summer Plan Winter Plan Pre-Summer Plan

Seasonal Events Xma's BTS Easter Mother Valentine Kids Day

Customer Main Events CRF Aniversary Biscuit Month Chocolate Month

NPI's and Promotional Events Wet Sampling Etc. / Leaftlets

Category1 3 3 6
Category2 4 4
Category3 4 4
Category4 2 2 4
Category5 2 2
20
NPI Revenue Planning Wet Sampling Etc.
TOTAL 50 0 0 0 0 0 0 0 0 0 0 0 50
Category1 0
Category2 ms 0
Category3 0
Category4 20 20
Category5 30 30

Promotional revenues
TOTAL 50 0 0 0 0 0 0 0 0 0 0 0 50
Brand & Mechanic 0
Brand & Mechanic ms 0
Brand & Mechanic 0
Brand & Mechanic 20 20
Brand & Mechanic 30 30
Brand & Mechanic 0

Secondary Displays Planning

TOTAL 0 0 0 0 0 0 0 0 0 0 0 0 0
Gondala 0
Side Rack 0
Pallet displays 0
Dump bin 0
Shelf 0
Category6 0
If it's necessary, include more categories
 Supply Chain

7 - Supply Chain Cost Saving Initiatives

Joint Business Strategy Supply Chain Initiatives

Supply Chain Related
Initiatives Potential Benefits Resources Needed Timing Priority

Customer Survey Inputs

Key Findings:

Distributor Capability Assessment

Key Findings:
Sales Waterfall
Back to cover
Sales waterfall b/w LE 2009 & AOP 2010
200

2010 OB Waterfall

150
0

0
20 60
100 0 40 80
180
0

50 100
80

0
1. LE 2009 2. Market 3. New Stores 4. New Products 5. Category 6. New Listings - 7. INC / DEC 8. Promotional 9. Other Display - TOTAL
Initiative - Assortment Distribution Program Permanent etc
Merchandising

1. LE 2009

2. Market
Topline Assumptions

3. New Stores

4. New Products

5. Category Initiative - Merchandising

6. New Listings - Assortment

7. INC / DEC Distribution

8. Promotional Program

9. Other Display - Permanent etc

TOTAL

Amount Cum end points blank neg red neg grn neg blank pos red pos grn pos
1. LE 2009 100 100 100
2. Market 20 120 0 0 0 100 0 20
3. New Stores -40 80 0 0 0 80 40 0
4. New Products 60 140 0 0 0 80 0 60
Data Entry

5. Category Initiative - Merchandising

6. New Listings - Assortment 80
7. INC / DEC Distribution
8. Promotional Program -80 60 0 0 0 60 80 0
9. Other Display - Permanent etc
TOTAL 60 500 180 0 0 0 320 120 80
DBP Summary
ScoreCard Categories LY Target ACT YTD vs. Tgt vs. LY Comments
Revenue Total 75.0 80.0 100.0 25.0% 33.3%
Category 1 75.0 80.0 100.0 25.0% 33.3%
Category 2 75.0 80.0 100.0 25.0% 33.3%
Category 3 75.0 80.0 100.0 25.0% 33.3%
Category 4 75.0 80.0 100.0 25.0% 33.3%
Category 5 75.0 80.0 100.0 25.0% 33.3%
Category 6 75.0 80.0 100.0 25.0% 33.3%

Volume Total 75.0 80.0 100.0 25.0% 33.3%

Category 1 75.0 80.0 100.0 25.0% 33.3%
Category 2 75.0 80.0 100.0 25.0% 33.3%
Category 3 75.0 80.0 100.0 25.0% 33.3%
Category 4 75.0 80.0 100.0 25.0% 33.3%
Category 5 75.0 80.0 100.0 25.0% 33.3%
Category 6 75.0 80.0 100.0 25.0% 33.3%

Trade Spend Total 7.5% 7.5% 5.6% 0.0 pp 0.0 pp

Category 1 7.5% 7.5% 5.6% 0.0 pp 0.0 pp
Category 2 7.5% 7.5% 5.6% 0.0 pp 0.0 pp
Category 3 7.5% 7.5% 5.6% 0.0 pp 0.0 pp
Category 4 7.5% 7.5% 5.6% 0.0 pp 0.0 pp
Category 5 7.5% 7.5% 5.6% 0.0 pp 0.0 pp
Category 6 7.5% 7.5% 5.6% 0.0 pp 0.0 pp

Case Fill Rate 7.5% 7.5% 5.6% 0.0 pp 0.0 pp

In Stock / On Shelf Availability 7.5% 7.5% 5.6% 0.0 pp 0.0 pp

Inventory Level (days) 75.0 80.0 100.0 25.0% 33.3%

Returns 7.5% 7.5% 5.6% 0.0 pp 0.0 pp

What does a Distributor Expect of us
Distributors Key Goals 1. Excellent Product Assortment & Investment
• Products that sell
• Investment in in-store and POS hardware
GROWTH 2. Excellent Supply
• Product Availability OTIF
• Minimal stock in system, stock norms and stock hygiene.
• Efficient claims management system

3. Excellent Communication
• Clear goals, territory, customer and coverage
$ CASH expectations
• Kraft strategies, policy & procedures
• Clear and effective and ways of working

4. Excellent capability leadership

• Investment in Organisational capability
• Experts in Shopper understanding and Winning at the
PoB
COSTS • Supply Chain thought leadership
• Systems and processes
• Tailored solutions
• Investment in People capability
• Sales and support team personal development

Improved ROI
Distributor Business Plans

• Any questions or challenges about the Business

Planning process OR how the basic local tool is
designed?
• Share current tools
• Indonesia
• China
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
Project DAD

Distributor Assessment &

Development
Program

AP Sales Conference
Nov 18-19
Project DAD
Distributor Assessment & Development Program

Our Goals:

1. Provide Distributors a picture of what’s “Best in Class”

• understanding of the different levels of Distributor capability
• Basis for Distributor benchmarking or rewards and recognition

2. Assess the entire Kraft distributor network

• use tool to assess Sales Capability, Financial Health, SC Capability and Corporate Mgt.
• identify which distributors to retain, develop or replace.

3. Lay down the foundation to build Distributor capability

• calibrate current status vs the key elements
• identify development areas
• develop customer roadmap to address gaps

4. Define resource allocation for the customer teams

• Distributor Capability & Performance Matrix
• Integrate assessment & development into the CBP/JBP

External Internal
Customer Kraft

(Value + Skill + Will) = People + Time + Money)

Project DAD Process
Structured approach focusing on identifying opportunities
for improvement
Assessment Pre-Work
Alignment on Program
Objectives
Assessment Process
Results
Consolidation
Presentation of Results
Next Steps
Pre-work:
Creating Non-Bias Assessment team
Train/Calibrate assessors re standards
Preview existing documented KPIs (e.g. TD Fact-book,
Financial statements, Scorecards)
Opening/Alignment Meeting
Discuss Objectives and Program elements
Introduce Assessing team, discuss schedule and audit rules
Walk-thru the Audit Scope and Distributor Standards
Assessment Process (break-out per function)
Sub-teams for the different elements
Determine capability level based on documents, personal
interface, fieldwork, physical evidences.
Results Consolidation
Consolidate the scores across the 4 elements
Establish linkages and alignment across all elements
Presentation of Results
Presentation of results and agree on Next Steps
Preparation of Roadmap and Development Plan (JBP)
Supply Chain Capability – 100 points
Criteria Level 3
100%
25% Retail A. Order Pattern and Route Plan
Distribution Scheduled deliveries to Trade using
standard routes with evidence of transport
planning
B. Fleet Management
Trucks/vans are in perfect overall condition
with preventive maintenance program, meet
all quality requirements and are not older
than 10 years
C. Cost-to-Serve
Cost per call (selling and delivery costs) is
regularly monitored and used as basis for
route-to-market (Kraft guidelines on min
order to retail)
D. Trade Customer Satisfaction
There is evidence that Distributor regularly
asks feedback from Trade on its delivery
performance
25% Information A. System Architecture
Systems, Distributor has advanced system
KPIs and architecture with full ERP capabilities and
Reporting can allow high level of automation and
Capabilities integration with Kraft
B. Data Synchronisation Capability
Standard master data synchronisation
process is in place (EDI or Electronic Data
Catalogue)
C. KPI Measure and Data Sharing
Kraft receives automatically generated IMS
and stock reports (per SKU) on daily basis
Customer Service Level measured from the
TD to the Trade, joint action plans for
improvement of overall CFR are in place
SFA is measured and used by decision
makers to improve forecasts process
Level 2
50%
A. Order Pattern and Route Plan
Mix of scheduled and non-scheduled
deliveries to retail within 24 hours in urban area
B. Fleet Management
Sufficient number of vans (1 truck per 2 pre-
book salesman) that meet quality requirements
in terms of hygiene and temperature control
C. Cost-to-Serve
Transport or delivery cost per case is known
based on historical review
D. Trade Customer Satisfaction
There is established procedure at Distributor
to resolve customer complaints
A. System Architecture
Distributor has advanced system architecture
with good processing and reporting capabilities,
uses at least an off-the-shelf application
B. Data Synchronisation Capability
Purchase order to Kraft is sent electronically
(via email at least)
C. KPI Measure and Data Sharing
Detailed stocks and sales data (per SKU) is
accurate and delivered on time (via email at
least)
KPIs shared between TD and Kraft Sales team,
targets and joint action plans for improvement.
Inventory accuracy is monitored and case fill
rate for top accounts regularly generated
Level 1
25%
A. Order Pattern and Route Plan
Non-scheduled deliveries to retail within
48 hours in urban area
B. Fleet Management
Truck fleet in a good condition and
regularly serviced, temperature
conditions and hygiene monitored
C. Cost-to-Serve
Inconsistent
D. Trade Customer Satisfaction
In-consistent
Responsive to complaints
A. System Architecture
Distributor has minimal system
infrastructure, processing and reporting
capabilities, combination of manual and
computer spreadsheets to support
business process
B. Data Synchronisation Capability
None
C. Data Sharing
Purchase order to Kraft and is
exchanged in a manual way ( e.g. via
Salesperson), but process and timing
clearly agreed
TD send inventory figures irregularly or
Kraft rolling inventory audit in place
Aggregated sales data is provided, but
irregularly with low accuracy
Distributor Capability & Performance
Matrix
Capability
1. Assess the distributors and map them in the
matrix to identify which distributors we: Strategic
Develop
a. Retain
High performer and
b. Develop Low performance but high leading edge
capabilities capabilities.
c. Replace/Transition
P
e
2. Tool provides a systematic methodology and r
standards in the area of Sales, SC and f
Finance. o
r
m
Fix or Transition Necessity a
3. Distributor Matrix provides a guide for n
resource allocation and program prioritization Low performance and High performance but c
poor capabilities. low capability e
Urgent fix or transition. A need for now/
4. Adapt this tool for pre-assessment prior to questionable sustainability.
hiring new distributors
 Distributor Performance Summary
AP TT KPI's
Objective KPI Frequency Measure
TT Value - Ex Factory Sales Monthly Number
Achieve or Exceed the sales target
TT Value - In Market Sales Monthly Number
Nielsen Store Universe Monthly Number
Kraft Numeric distribution Monthly %
Achieve or Exceed MS and Distrbution targets
Kraft Weighted distribution Monthly %
Kraft MS in TT Monthly %

New distributor appointments Quarterly Number

Strengthening the RTM New sub distributor appointments Quarterly Number
New Van routes Quarterly Number

Direct coverage universe Monthly Number

Calls made Monthly %
Achieve distribution effectiveness Productive calls Monthly %
Effective Calls Monthly %
Value per resource - Direct sales force Monthly Number
Own The Hot Zone PPoS unit at the Hot Zone Monthly Number

Inventory Days on hand Monthly Number of days

Effective distributor management % Distribution attrition Quarterly %
Distibutors on 100% target achievement Quarterly %

Investment on PPoS units Monthly %

Trade investment Trade promotions and activation Monthly %
Total Trade Investments Monthly %

Direct Head count Monthly Number

In Direct Head count Monthly Number
People Management and Develoment HiPo Attrition Monthly %
Total Attrition - Direct resource Monthly %
Training Mandays Monthly Number
DAD Assessment

Review the DAD Assessments

and Performance Summaries

Each team to spend 15 minutes taking the group

Each team to spend
through 15 minutes
a summary taking
of their the groupDAD
pre-prepared
through a summaryAssessment
of their pre-prepared DAD
for their Distributor
Assessment for their Distributor
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
A Framework for organising and analysing business information

The 5C’s model

C Company C distributor / Channel

C Category
Performance

C Consumer / Shopper C Competition

 The 5C’s model
C Company C distributor / Channel

C
Category
Performance

C Consumer / Shopper C Competition

C Company C distributor / Channel
• Sustainable Competitive Advantage: Innovation; • Who: Segments / Types / Size
Cost; Focus; or Stuck in the middle
• MKT Analysis: Key Brands / SOM; Price; • Margins / Cash Flow / Inventory Goals
Positioning; Advertising & Promo, Distribution, • Strengths & weaknesses
Portfolio Prioritization; Product or Market
Development; and strengths & weaknesses • Needs & Wants
• Finances: P&L; Impact on Profitability; Cost • Manufacturers perception
Structure; and Recommendation Costs
• Suppliers (Materials) / Machinery (capacity) • Route to market / Available Distribution channels

• Supply Chain Management / IT / R&D 12-6-3 months

• Men (HR) / Sales Force Assessment Category

Category Performance of Key Items

Distribution/Authorization

Pricing Base and Promo

Ads/Displays/Discounts
and Sizes At Mkt and distributor

Base and Incremental

Volume or Revenue
Volume or Revenue
Share and Pt Chg

Merchandising

Base and Promoted

C Consumer / Shopper C Competition
• PESTEL – Political; Economic; • Who: Players by Segment / Key
Social; Technological; Brands
Environmental; and Legal
• Who: Segments / Types / Size / Avg Age • Competitor Analysis: performance
Year (Vol, SOM, Finance), marketing
• Needs & Wants activities, strengths & weaknesses
• Emerging Trends (Health & Wellness) • Speed / Responsiveness to change
• Potential New Consumers (Niches) • Potential New Entrants
• Shopping trips
• Innovation ??
• Share of wallet
C Company C distributor / Channel

•No new products •Space increased for

launched multi-packs at the
expense of singles
•Reduced
promotional packs

12-6-3 months
Category

•Snack foods +5%

C Consumer / Shopper •Kraft +1% C Competition

•Increased demand for •Frito Lay launched

multi-packs
•Mixed flavour packs
demand from families
•Increased lunchbox
demand
Year
multi-packs with
mixed flavours
•Frito Lay Buy 2 get
1 Free promotions
 A Business Analytics Tool

The 5C’s model

C2 Company - Kraft C3 distributor / Channel

C1
Category
LOCATION
Performance
See Can shoppers find the category?

CATEGORY MERCHANDISING:
Scan Is the category easy to shop?

BRAND MERCHANDISING:
Spot Can shoppers find what they want?

Show RANGE / ASSORTMENT

Interest Do they have the right range?

PRICING / OFFER RELEVANCE

Select
Appropriate pricing & promotional deals?

C5 Consumer / Shopper C4 Competition (to Kraft)

Most effective when conducted by Channel and distributor Level
Set up a consumption based Score Card
• Use a score card to identify consumption trends

The 5C’s model

C1 Category
Data Rich Score Card
Nielsen Based Reporting
Identify the “causal factors” of the performance
The 5C’s model
C2 Company - Kraft

• Demand
• Base
• Advertising
• Consumer
• New Products
• New Authorizations
• Shelving
• Incremental
• Tactic (Feature/Display)
• Pricing
• Frequency
• Timing
• Investment – Trade Funds
• Supply
• Availability
• Quality
Identify the “causal factors” of the performance
The 5C’s model

C3 distributor / Channel

• Demand
• Base
• New Stores
• Pricing
• Cannibalization
• Other
• Incremental
• Tactic
• Pricing
• Frequency
• Other
• Supply
• Credit
• Labor Disputes
• Other
Identify the “causal factors” of the performance
The 5C’s model
C4 Competition (to Kraft)
• Demand
• Base
• Advertising
• Consumer
• New Products
• New Authorizations
• Shelving
• Incremental
• Tactic (Feature/Display)
• Pricing
• Frequency
• Timing
• Supply
• Availability
• Quality

Most effective when conducted by Channel and distributor Level

Identify the “causal factors” of the performance
The 5C’s model
C5 Consumer / Shopper

• POB See
LOCATION
Can shoppers find the category?

• See CATEGORY MERCHANDISING:

Political • Scan Scan Is the category easy to shop?

Economic • Spot Spot

BRAND MERCHANDISING:
Can shoppers find what they want?

Social • Show Interest Show RANGE / ASSORTMENT

Technological • Select Interest Do they have the right range?

• Need State Select PRICING / OFFER RELEVANCE

Environmental Appropriate pricing & promotional deals?

Legal • Trip Mission

Attitudinal • Why?
• Shopper Modality
• How -Mode?
• Auto Pilot
• Buzz Activated
• Variety Activated
• Bargain Activated
Most effective when conducted by Channel and distributor Level
5S and 5P’s

Point of Buying 5P’s

Drivers & Principles

Location
Be in a present and relevant location

Placement
Category Merchandising
Category location in store
Make category logical & easy to shop
Merchandizing& planogram

Brand Merchandising
Optimise placement & impact of brands

Range / Assortment Product Assortment

Optimal SKU coverage vs. shopper needs Right product mix in the right stores

Price, Promotions, POB

Communication, Price &
Media
Promotion
In store communication/shelf price/promotions

Behaviour Environment
…drives growth …drives behaviour
 5C Exercise
• Each KAM to prepare to present the level of current data in each of the 5C’s
in their DBP, including the 5S’s within the Consumer/Shopper
• Prepare to discuss with the group the quality of the data we currently use
within the 5C’s, where this gives us a competitive advantage and where it puts
us in an unfavourable position
 A Business Analytics Tool

The 5C’s model

C2 Company - Kraft C3 distributor / Channel

C1
Category
LOCATION
Performance
See Can shoppers find the category?

CATEGORY MERCHANDISING:
Scan Is the category easy to shop?

BRAND MERCHANDISING:
Spot Can shoppers find what they want?

Show RANGE / ASSORTMENT

Interest Do they have the right range?

PRICING / OFFER RELEVANCE

Select
Appropriate pricing & promotional deals?

C5 Consumer / Shopper C4 Competition (to Kraft)

Most effective when conducted by Channel and distributor Level
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
SWOT Definitions

• Strengths give you:

• What you do best
• A significant advantage
• A uniqueness
• Clear differentiation from your competitors
• Weaknesses – a significant weakness that, not remedied, could cripple
the distributor strategy
• Opportunities should:
• Have impact for at least 1 year
• Be so good you must pursue them
• Events or situations that offer a chance to achieve your goals
• Threats – events or courses of action that may negatively affect KI
market position over time
Kraft “SWOT” Components

• What KI does best

Strengths • Should be clearly differentiated from competition
• Creates unique business opportunities for KI

• Significant KI weaknesses that, not remedied, could

Weaknesses cripple KI effectiveness
• Competitive strengths that, not addressed, will erode KI
market share and volume

• Events or situations that enable the ability to achieve KI

Opportunities long term goals
• Trends that may benefit the sell-through of KI products

• Events or course of action that may negatively affect KI

Threats market position over time
• With the distributor  With the consumer
• Within the category  From the competition
Distributor “SWOT” Components

• What distributor does best

Strengths • Should be clearly differentiated from competition
• Creates unique business opportunities for distributor

• Significant distributor weaknesses that, not remedied,

Weaknesses could cripple distributor effectiveness
• Competitive strengths that, not addressed, will erode
market share and volume

• Events or situations that enable the ability to achieve

Opportunities
distributor long term goals

• Events or course of action that may negatively affect

Threats distributor market position over time
• With the manufacturer  With the consumer
• Within the category  From the competition
Key Leverage Points (K.L.P.’s)

• Factors that provide you with greater opportunities

than the competition to build the business

• Positive factors that can be built on or extended or

expanded

• Derived from Strengths and Opportunities

“By leveraging………… we will achieve our objective”

Business Implications (B.I.’s)

• Combinations of factors so significant that they must

be addressed in strategies and/or plans, or solutions
cannot go forward

• Derived from Threats and Weaknesses

“To win we must address/overcome……..…”

SWOT Definitions

• Strengths give you:

• What you do best
• A significant advantage
• A uniqueness
• Clear differentiation from your
competitors
• Weaknesses – a significant
weakness that you have if, not
remedied, could cripple your
customer strategy
• Opportunities should:
• Have impact for at least 1 year
• Be so good you must pursue them
• Events or situations that offer a
chance to achieve your goals
• Threats – events or courses of
action from the outside that
may negatively affect KI market (Customer, Competition, Consumer)
position over time
Kraft “SWOT” Components

• What KI does best

Strengths • Should be clearly differentiated from competition
• Creates unique business opportunities for KI

• Significant KI weaknesses that, not remedied, could

Weaknesses cripple KI effectiveness
• Competitive strengths that, not addressed, will erode KI
market share and volume

• Events or situations that enable the ability to achieve KI

Opportunities long term goals
• Trends that may benefit the sell-through of KI products

• Events or course of action that may negatively affect KI

Threats market position over time
• With the customer  With the consumer
• Within the category  From the competition
Distributor / Customer “SWOT” Components

• What customer does best

Strengths • Should be clearly differentiated from competition
• Creates unique business opportunities for customer

• Significant customer weaknesses that, not remedied,

Weaknesses could cripple customer effectiveness
• Competitive strengths that, not addressed, will erode
customer market share and volume

• Events or situations that enable the ability to achieve

Opportunities
customer long term goals

• Events or course of action that may negatively affect

Threats customer market position over time
• With the manufacturer  With the consumer
• Within the category  From the competition
 “SWOT” Misc Example

Strengths Key Leverage Points Opportunities

Financially strong
Powerful brands
Strong R&D know how
Excellent operations facilities
M&A experience
By leveraging our strong
Financial Position (in terms of
brands, know-how and
financials) on the Ethnic foods
market we will achieve our
objectives
Rapidly growing ethnic food
Market.
Potential to acquire competitive
company

Weaknesses Business Implications Threats

No frozen food experience or
Flexibility
Limited product varieties
Limited management skills
To win we have to be the first Consumer needs are
who addresses changing changing
consumer needs towards
convenient, healthy foods while
Recruiting new management
Construction of an “Action Plan” from the SWOT
Best Practice Example

Strengths
Strengths Key
Key Leverage
Leverage Points
Points Weaknesses
Weaknesses
• Relationship with sales team  Category Captain – 1 • Long term category vision

• Shopper insights team Review • Slow to capitalise on trends

• Field sales team
• Market leading brands
• Perishables pirates vendor
• NPD launch support. Eg Oceans
 Brand Amplification
2 • NPD that hasn’t delivered. Extra
Plans – Philly Tasty, Premium Pourovers
 Singles Promotional 3 • Workshops tend not to be workshops

• Supply SL% VRP program

Effectiveness • Overall Kraft margin

 Owning the 4
• Lack of customer focus
Entertaining Season(s) • Losing share on Singles (relevance)

Opportunities
Opportunities Threats
Threats
• No category champions 1 • Larger competitors more closely
aligned to customer 1
• NAM ownership of the plan / 2
accountability 2 3 • Philly consumption / Private Label
• RAS (co-op) component of trade • Depth of range on Dips 1 4
spend – opp to spend smarter 3 • Above the line plans change too
• NPD Pipeline funnel often 2
• Cross category promotions 2 4 • Growth behind WOW category 3
2
1
SWOT Exercise

• In pairs, develop an example from your current business

Strengths Key Leverage Points Opportunities

Weaknesses Business Implications Threats

Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
Prioritise Issues and Opportunities

From the 5C/5S and SWOT analysis each team is to prioritise their
issues and opportunities as per the grid

Key Leverage Point / Actions Who (resources)

Business Implication (sales, supply,
/ DAD Opportunity Insights, business
practices-wow)
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
Prioritise Issues and Opportunities

From the 5C/5S and SWOT analysis each team is to prioritise their
issues and opportunities as per the grid

Key Leverage Point / Actions Who (resources)

Business Implication (sales, supply,
/ DAD Opportunity Insights, business
practices-wow)
 5P Sales Action Plan

6 - Action Plan
Sales / Growth Action Plan

Joint Business Strategy Joint Action Plan Timing Responsibles Resources

Kraft Foods:

Distributor:
 Supply Chain

7 - Supply Chain Cost Saving Initiatives

Joint Business Strategy Supply Chain Initiatives

Supply Chain Related
Initiatives Potential Benefits Resources Needed Timing Priority

Customer Survey Inputs

Key Findings:

Distributor Capability Assessment

Key Findings:
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
 AP Distributor ROI Tool

Original Position
Income
Total Annual Sales
Gross Margin 5.00%
10000000
500000 Click to Tool
Cash Discount 4000000 1.00% 40000
Perf Linked Inc 1.00% 100000
Fixed Costs
Total Monthly Rent 10000
Allocated to KF 50.0% 5000
Rent
No of months 12
Rental amount 60000
head count 6
Avg salary / HC 3000
Salary
No of months 12
Salary Amount 216000
Variable Costs Distributor ROI Dashboard
Per month Annual Total amount
Fuel & Maintenance 1200 12 14400
Phone and Electricity 1500 12 18000 Current Future
Stationery 800 12 9600
Business travel & Entt 800 12 9600 Income Income
Sales force Incentives 1600 12 19200 Annual Sales 10000000 Annual Sales 10500000
Bank charges 600 12 7200 Gross Margin 500000 Gross Margin 525000
Total Variable expenses 51600 Cash Disc 40000 Cash Disc 40000
Trade Discounts PL incentive 100000 PL incentive 105000
Discounts: Promoted Value % Discount Discount Value
Cash Discount 2000000 2% 40000 Total Income 640000 Total Income 670000
W/S Discount 2000000 2% 40000 Costs Costs
Annual Trade Terms 50000 2% 1000 Fixed 276000 Fixed 312000
Total Discount 81000 Variable 51600 Margin Margin Variable 51600
Interest on Borrowing Trade Dis 81000 (Inc-Costs)) (Inc-Costs)) Trade Dis 81000
Overdraft amount 40000 Interest on Bor 3200 Current ROI Future ROI Interest on Bor 3200
% Interest 8% 228200 (M/I) (M/I) 222200
Interest amount 3200 Total Costs 411800 Total Costs 447800
Investment (Working Capital) Investment (WC) Investment 29.6% 28.9% Investment Investment (WC)
Inv in Co Stocks 400000 Inv in Co Stocks 400000 (WC) (WC) Inv in Co Stocks 400000
Money blocked by claims 50000 Claims 50000 Claims 50000
Credit to Retail 200000 Credit 200000 770000 770000 Credit 200000
Investment in Fixed Assets 120000 Investment in Fixed 120000 Investment in Fixed 120000
Vans 100000
Computers 20000
ANO 0 Total Costs 770000 Total Costs 770000
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification
Successful Selling Presentation
Successful Selling Presentation

Set the Propose Explain Highlight

scene Solution how it Key Close
works Benefits

Check for understanding, trial close

and handle objections as you
go through the process
 Successful Selling Presentation
Set the Propose Explain Highlight Close
scene Solution how it works Key Benefits

 Summarise  State your  Detailed  Re-enforce the  Easy next steps

discussions to proposal in a explanation of key benefits to
date and current simply, clear & how it works and the customer  Offer a choice
conditions concise way what it entails
 Show how it  Gain agreement
 Reiterate issue/  Meets a need  Who does what, meets a need to proceed
needs & key where and when
points made by  Suggests action  Agree action plan
customer  Ensure it is
 Complete in 1 practical  Propose
 Prepare yourself sentence something YOU
to make the pitch beginning with  Quantify and can do
“My idea is…… qualify “value”
 Gain buyers
interest

Check for understanding, trial close and handle

objections as you go through the process
 Successful Selling Presentation
Set the Propose Explain Highlight Close
scene Solution how it works Key Benefits

 Summarise
discussions to
date and current
conditions
 Reiterate issue
/needs & key
points made by
customer
 Prepare yourself
to make the pitch
 Gain buyers
interest
Successful Selling Presentation
Set the Propose Explain Highlight Close
scene Solution how it works Key Benefits

 State your
proposal in a
simply, clear &
concise way
 Meets a need
 Suggests action
 Complete in 1
sentence
beginning with
“My idea is……
Idea- Needs to be SMART!

•S__________
•M__________
•A __________
•R __________
•T __________
9 Golden Rules
80% of shoppers only visit 20%
of the store, know the key traffic
areas
Make sure products stand out
on shelf – search patterns differ
vertical block to stand out
27 1
3
5 6
4 0
8
8
The package speaks – front
facing with Branding vs. laying
flat drives more sales
Awareness Zone – highest Visibility is Key – Go for
awareness is 30% into the aisle. optimum location on shelf
eye
Level
is 15-30º
downward
Reaching out – Location on Multiple face best sellers for
shelf makes a huge difference proper visibility and awareness
+39%
+59%
+15% +15%
+59%
10 20 30 40
+39%
Hot Spots – Different location gives Cross Promotions – items that
different uplift for same display go into same shopping basket
and have similar usage.
95
Give them a clear proposal
solution
• Starting with:
• “My idea is..”
• “My solution is…..”
• “My recommendation is….”
• “My proposal is….”
• “To address .....
• “To tackle ......

• Give me how you would propose your solution

for one of the following…..
• Selling in a Tang Summer display
• Putting an Oreo secondary display next to the milk
category
• A seasonal chocolate check-out unit.
Successful Selling Presentation
Set the Propose Explain
Explain Highlight Close
scene Solution how
how itit works
works Key Benefits

 Detailed
explanation of
how it works and
what it entails
 Who does what,
where and when
 Ensure it is
practical
 Quantify and
qualify “value”
Give them the explanation
• How this works......

• What this means ......

• Here is where you talk about :

• The Facts & Features of your
proposal
• The resources (People, Time and
Money – offer and discounts)

• The logistics – who does what

when and where
Successful Selling Presentation
Set the Propose Explain Highlight Close
scene Solution how it works Key Benefits

 Re-enforce the
key benefits to
the customer
 Show how it
meets a need
 Make a /some
benefit
statements
Successful Selling Presentation
Set the Propose Explain Highlight Close
Close
scene Solution how it works Key Benefits

 Easy next steps

 Offer a choice
 Gain agreement
to proceed
 Agree action plan
 Propose
something YOU
can do
Possible Closes

Close Type Example

A Command Sign here

Obligation I think we need a minimum of 20 cases

Summary “So what I propose is the following!”

Alternative “Would you like to take 3 or 4 SKU’s”

Fear “Unless you order this week I cannot

guarantee the stock
Confident “All you need to do is sign here”

Suggestion Let’s bring the product on ….

Question Which day would you like for the order to arrive?
Preference I think it would be wise to ……

Hint Putting the display in the first aisle would sell

faster
 Successful Selling Presentation
Set the Propose Explain Highlight Close
scene Solution how it works Key Benefits

 Summarise  State your  Detailed  Re-enforce the  Easy next steps

discussions to proposal in a explanation of key benefits to
date and current simply, clear & how it works and the customer  Offer a choice
conditions concise way what it entails
 Show how it  Gain agreement
 Reiterate needs  Meets a need  Who does what, meets a need to proceed
& key points where and when
made by  Suggests action  Agree action plan
customer  Ensure it is
 Complete in 1 practical  Propose
 Prepare yourself sentence something YOU
to make the pitch beginning with  Quantify and can do
“My idea is…… qualify “value”
 Gain buyers
interest

Check for understanding, trial close and handle

objections as you go through the process
KLARDOC offers a simple framework to follow to manage the
objection during a presentation or negotiated event

K = Keep Calm
L = Listen
A = Acknowledge
R = Refine
D = Define
O = Overcome / Outweigh
C = Close
KLARDOC – Planning an effective response

KEEP CALM - avoid frustration, anger etc from voice and

body language

LISTEN & LEARN - Get more information, show concern

KLARDOC – Planning an effective response
ACKNOWLEDGE THE ISSUE
- Not agree. Shows you have heard and taken note of objection e.g.
"Your coffee is too expensive" response "I appreciate our coffee may be
more expensive than some brands, however..“ (Brand Value Equation)
KLARDOC – Planning an effective response
REFINE - This is to find if this is the only objection and is it real.
First find if there is anything else by asking questions such as "apart from….. is
there anything else which is of concern?"
Second find out if it is false or genuine by using the SUPPOSE test e.g.
objection - "I don't have enough space", response "Suppose (or imagine) you
had enough space, would you then stock.."
If answer is "yes" the objection is genuine and can be confirmed by statements
such as "if I can sort that out you'll be happy to go ahead?"
If answer is "no" then could be 2 reasons
1.There was more than 1 real objections
2.It was a false objection
In either case revert to open questions to find out more and reuse the
"suppose" test.
DEFINE - Final confirmation of authenticity e.g. "so your concern is that you
don't have enough space, is that correct?"
KLARDOC – Planning an effective response
OVERCOME or OUTWEIGH - Objections come into 4 groups
1. Scepticism - I don't believe
2. Indifference - I don't care
3. Misunderstanding - I don't understand
4. Drawback - I can't
SCEPTICISM
" Acknowledge the concern
" Ask questions to confirm an acceptable proof source
" Offer proof or support material
INDIFFERENCE
" Use series of closed questions to find out true needs
" Use more features and benefits to stimulate interest
KLARDOC – Planning an effective response
OVERCOME or OUTWEIGH - Objections come into 4 groups
1. Scepticism - I don't believe
2. Indifference - I don't care
3. Misunderstanding - I don't understand
4. Drawback - I can't
MISUNDERSTANDING
" Repeat the objection back to him as a closed question
" Clarify the misunderstanding, using features and benefits, if appropriate
DRAWBACKS
" Acknowledge the issue of the drawback
" Outweigh with the relevant benefits of your proposal
KLARDOC – Planning an effective response
CLOSE AND KEEP QUIET
KLARDOC Exercise Team Exercise

• Brainstorm examples of likely objections to selling in the plans

to be collated on a flipchart
• Together using KLARDOC the work as a group to determine
possible responses
Final Exercise

• Each group is to prepare to make a Fact Based discussion with

their Distributor
• This should be aimed at selling in their DBP action plan
• You should be using:
• The Successful Selling Presentation format
• The output from your Assessment, Opportunity and Plan
Development
• The ROI tool analysis
• Handling Objections
• The Facilitator will play the role of your distributor
• 45 minutes to prepare, 15 minutes to present
Distributor Business Planning

Distributor Business Planning

Process & Tool

Opportunity Plan Distributor

Assessment
Identification Development Presentation

DAD Assessment
Priority Action Successful Selling
& Performance SWOT Analysis
Plan Presentation
Summary

Issue &
Objection
5C/5S & Analysis Opportunity ROI Tool Analysis
Handling
Identification