Trade Round TableMagazinul Progresiv

20 October 2005

Martina Kastler

Our mission

Add Vitality to Life.

We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

Unilever co-operates within the ECR movement with trade partners around the world. We believe in constructive co-operation to the benefit of the consumer.

Unilever Romania established in 1995. We are marketing and producing Home & Personal care brands (Dero, Dove, Domestos, Cif, Rexona) and Food brands (Delma, Rama, Knorr, Delikat)

A new beginning: ECR RomaniaAn Association of Industry and Trade Established 15th June 2005 Members to date:

Supported by GS1 Romania (former EAN) Co-Chairmanship: Metro (Trade), Unilever (Industry)

INDUSTRYUNILEVER SOUTH CENTRAL EUROPENESTLE ROMANIAKRAFT FOODS ROMANIAPROCTER & GAMBLE MARKETINGHOCHLAND ROMANIADOBROGEA SAHENKEL ROMANIABRAU UNION ROMANIABIC (ROMANIA) MARKETING DISTRIBUTIONPHILIP MORRIS ROMANIAFRIESLAND-NAPOLACT

RETAIL TRADEMETRO CASH & CARRY ROMANIASELGROS CASH & CARRYBILLA ROMANIAPRAKTIKER ROMANIAKAUFLAND ROMANIAARTIMARODIPET

What is the category? What is the category structure?

How important is this category for us?

What do we want to achieve with this category? How do we measure category succes?

What are the strategies that we will use to ensure succes?

What are the tactics (pricing, promotions, assortment and shelf) to follow the strategy?

Where and how will we implement the category plan?

Example: 8 step Category Management1

Category Role2

Category Assessment3

Category Performance Measures

4

Category Strategies5

Category Tactics6

Plan Implementation7

Cat

egor

y R

evie

w

8

Category Definition

How does the shopper behave when buying this category?What is the competitor‘s status on the category?

ECR Vision

Trade and Industry Working Together to Fulfil Consumer Wishes

Better, Faster & at Less Cost

ECR History

Originated in the 1980s in USALeading retailers (i.e. Wal Mart) started co-operation with industry to improve Customer Service at reduced costs

Establishment of ECR Europe in 1995 at Geneva Conference

1st July 2005 ECR Romania accepted as member of ECR Europe

ECR EuropeNational Initiatives

ECR Austria     ECR Belgium ECR Brazil       ECR Czech Republic/SlovakiaECR Denmark  ECR Finland       ECR France       ECR Germany       ECR Greece       ECR Hungary       ECR Iceland    ECR Ireland       ECR Italy       ECR Netherlands       ECR Norway       ECR Poland  ECR Portugal         ECR Russia       ECR South Africa       ECR Spain    ECR Sweden       ECR Switzerland       ECR Turkey       ECR United Kingdom

ECR Romania 

Changing Market Environment

An increasingly Demanding Consumer

Choice Service Convenience Quality Freshness Safety

An increasingly Costly Supply Chain

Assortment Pack sizes Shelf Presentation Product Descriptors Chilled Logistics Traceability

ECR Ways of working New relationship between Industry and Trade

From Confrontation to Co-operation Breaking down non-productive barriers

to better serve the consumer Overcome:

Supply Chain Inefficiencies Non effective planning tools Inappropriate information along the Value Chain

ECR Europe Work over time 1994 ”Co-operation to fulfil consumer wishes better....

2000 .......to improve margins and competitiveness of all business partners, industry and retail,

along the value chain...

2004 ......and to provide a sustainable platform enabling all business partners to cope with new

entrepreneurial (market) challenges”

ECR Vision

Trade and Industry Working Together

to Fulfil Consumer Wishes

Better, Faster & at Less Cost

with a Shared Business Process

leading to

Shared Benefits across the Value Chain

ECR Pyramid

ConsumerRelationshipManagement

Category Management

Efficient Assortment

Efficient Product introduction

Efficient Promotion

Efficient Replenishment

Information Management

No Out of Stocks at efficient cost

Satisfied Shopper

Sufficient to work

Attractive POSWell chosen Promotions

Well defined, assortedCategory presentation

ECR Pyramide

Dem

and

Side

Supp

ly S

ideEfficient Replenisment

Information Management

ConsumerRelationshipManagement

Category Management

Efficient Assortment

Efficient Product introduction

Efficient Promotion

Proc

esse

s

Stan

dard

s

CRP, VMI, Cross Docking, EAN 128, EULEfficient Replenisment

EDI, Internet, Master Data, Identification

Information Management

ECR Demand Side“To Fulfil Consumer Wishes

Better, Faster & at Less Cost”

Understand consumer wishes and define shopper requirements Define product categories from a consumer/shopper point of view Combine and sell category assortments customised for target group

and shop

ECR has developed standardised processes

and generally accepted definitions and parameters

to support Trade and Industry.

Brand Loyalty „product-branding“

Consumer Loyalty Shopper Loyalty

CRM

Industry

Example: CRMExample: Consumer Relationship Management

Trade

Shop Loyalty „store-branding“

CRM: Focus on the individual shopper and shopper groups.

Specific offers to the target group.

- „Individual offers“ to shoppers- „Data warehouse“/Loyalty cards

personalised:1 for 1

- Marketing targets the most attractive and valuable groups

- Data management important

segmented:1 for some

- Mass marketing with limited effectstandardized:1 for all

CRM: Shopper Differentiation

ECR Supply side“To Fulfil Consumer Wishes

Better, Faster & at Less Cost”

Optimise physical flow of goods from supplier warehouse to shelf Co-ordinate data - and information flow Co-operate to identify cost saving potential

ECR has developed standardised processes

and commonly agreed identification and parameters to:

- Reduce stocks- Optimise transport capacity- Reduce workload - Ensure On Shelf Availability

Example Supply Side: VMI

Vendor Management Inventory is a process when both Industry and Trade agree to share the data (sales and stocks) to create common KPI for replenisment

Unilever and Metro have started this process last year

Based on KPI established by Metro the order is now done by Unilever

Simplification for the department manager Improving the quality of the order (we have to manage 150

articles in Detergents and Cosmetics vs. 2000 articles in the category for Metro)

The stock days have been reduced by 7 days

ECR: POS Data exchangeDemand side Combining knowledge of POS Data (Shopper) and Market Research

(Consumer) provides better decision base Monitoring and Analysing agreed KPI accelerates learning curve Systematic measurement of OSA prevents out of stock and increases

consumer/shopper satisfaction

Supply side Reduction of logistic costs and stocks Improved service level, less OoS Cost savings in planning and ordering Less write-offs for residuals, obsoletes and expired goods

ECR standards - available already

Consumer Relationship Management Category Management Day To Day Category Management Web Enabled Category Management Category Management Online Retailing Efficient Promotions, Efficient Assortment Efficient Product Introduction Consumer Enthusiasm Promotion Analysis POS Data Exchange & Management Collaborative Planning Forecasting &

Replenishment Efficient Replenishment Continuous Replenishment Vendor Managed Inventory Cross Docking I & II EAN 128 Optimal Shelf Availability Shrinkage / Stock-Loss Track & Trace of Goods Recall of Goods RFID in the Supply Chain

22+ 9+ 5+ 6+

Global Trade Item Number Global Location Number Reduced Space Symbology EAN 128 / SSCC Composit EAN Barcode Radio Frequency Identification UPC Electronic Product Code Digital Signature etc.

EANCOM Messages / EDI GCI/EAN-XML Master Data Alignement Automated Data Capture Global Product Classification

Efficient Unit Loads EAN 128 Palette Standards for Containers Beverage Boxes etc.

Processes Identification Communication Logistics

ECR Standards - available already

ECR Results in Europe

Trade and Industry together realised the following

- Savings Supply Chain 1995 – 2005: 3,6% of total cost = Eur. 18 bn.- Increased Customer Service Level 1995–2005: + 5,7%- Reduction of stocks 10 days- Reduction of out of stock: - 4,9% of total inventory

Source: ECR EuropeCase Study

ECR Experience ECR has helped to fulfill consumer wishes better

ECR Pyramide

Dem

and

Side

Supp

ly S

ideEfficient Replenisment

Information Management

ConsumerRelationshipManagement

Category Management

Efficient Assortment

Efficient Product introduction

Efficient Promotion

Proc

esse

s

Stan

dard

s

CRP, VMI, Cross Docking, EAN 128, EULEfficient Replenisment

Identification (EAN), Electronic Data Exchange

(EDI, Internet), Master Data Management

Information Management

ECR Universe

Business Model•Co-operation•Trade & Industry•Common Values and Principles• Consumer is Focus

Enablers:•Standards•Processes •Best Practice•Methodologies•Tools

Network: •Companies and Associations•Implementation and Experience•Communication Platform

ECR

ECR Culture

Shared Values and Principles

Trust

Honesty +

Openess

ECR

ECR Romania: Main Tasks

Embrace the ECR culture

Come together to define common priorities between Trade and Industry to better serve the consumer

Use available ECR Europe description of processes and international identification standards

Establish common understanding and language

Develop, adapt, test

Teach, Train, Disseminate Information

Work in project groups and share learnings

Invitation

“Working together - building business”

Join ECR Romania!

www.ecr-romania.ro

Telephone: +4(021)3178031/2/3

Thank you!