RMFCM Virtual Programme Delegate handbook

© Total Negotiation Limited 2011-2021

RMFCM Virtual Programme

Delegate handbook

PLEASE ENTER YOUR NAME HERE

DATE

1


Tasks from the introduction SDL

2

Programme learning objectives

Capture your 2 Personal Learning Objectives (also to be sent to TNG Ops contact).

Additional Notes from the introduction SDL

Capture any notes coming out of the self-directed learning asset that you feel you would like to discuss

during the virtual session.


Tasks from SDL 1: Mix

3

Ahead of the first virtual workshop and while you

are completing the Mix SDL complete the following

2 tasks based on your number 1 customer

First plot your customer on the Boston Matrix…

Customer name:

…next, list your 3 actions in terms of approach to

managing customer based on Mix position, based

on where they sit within the matrix

HIGH

HIGH

LOW Growth

Siz

e /

Pro

fit

CASH COWS STARS

DOGS QUESTION MARKS

Approach to

manage:

Approach to

manage:

Approach to

manage:

Approach to

manage:

HOLD DRIVE

SQUEEZE EXPLORE

Additional Notes



Confidential - for internal use only | Pricing is at the sole discretion of the customer

2.1: Drill into the root

causes/drivers of

performance

• Brand Investment

• Weighted Distribution

• Rate of Sale

• Space

2.2: Drill into root

causes/drivers of profitability

• COGS

• Customer trade

investments

2.3: Analyze the profit pool

contribution to the customer

and Beam Suntory

2.4: Define list of

opportunities and prioritize

3.1: Ideate and build plans for

key countries, channels,

customer types and

occasions at brand quality

level

3.2: Prioritize the plans based

on GP &/or GP/9L

contribution (within current

resources available)

3.3: Define recommendations

for inclusion in the Perfect

Sales Execution framework

(e.g. brand quality range,

Space Allocation, etc.)

4.1: Model the overall business

impact on:

• Brand / BQ

• Customer Type / Customer

• Channel

• Priority brand qualities

4.2: Optimize plan to focus

resource on the most significant

opportunities

4.3: Finalize plans and issue

commercial guidelines for

execution

1.1: Understand the current

brand quality under or over

index by GP and rank by:

• Brand / BQ

• Customer Type /

Customer

• Country

• Channel

• Priority brand qualities

1.2: Identify the key

observations and hypothesis

to explore

1.3: PVM. Price, Volume, Mix

bridge to understand drivers

of GP variances Vs LY &

Budget

Mix: To optimize mix follow 5 key steps

5.1: Detail implementation

plan to translate

opportunities into concrete

actions (including business

case) & provide insights to

support customer selling

stories

5.2: On-going tracking,

monitoring and optimization

based on finite resources

(e.g. limited capacity, gap-

fill, etc.)

Note: Consider the Triple Win impact across the 3 lenses (Consumer / Shopper, Customer, Beam Suntory) in all of the above steps

1 2 3 4 5

Analyze and understand

current mix

Model business impact of

plans and optimise mix

Build plans based on the

key opportunities

Define the priority

opportunities to pursue

Implementation,

on-going evaluation

& course correction

4


Mix Management involves defining

the target mix then actively

managing retailers & cash & carry’s,

brands, brand qualities and

customers to deliver it.

In food retail environments the focus

is on achieving the optimum

availability and visibility on the right

brand quality assortment, presented

optimally to the consumer.

This requires a granular

understanding of demand drivers in

multiple selling environments,

ambient and chilled, and multiple

occasions including future

consumption, ‘on-the-go’, impulse,

convenience ‘top-up’ and others.

Mix: Example in Off Trade

Highlights Industry Examples

5


In On Trade, this focuses on

achieving the optimum visibility

and availability on the right

brand quality assortment,

presented optimally to the

consumer.

This requires a deep and

granular understanding of

demand drivers in multiple

selling environments, ambient

and chilled, and use of multiple

dispensing technologies to

drive rates of penetration.

Mix: Example in On Trade


6


Tasks from SDL 2: Trade Terms

7

Ahead of the second virtual workshop and while you are

completing the Trade Terms SDL complete the following 2

tasks based on your number 1 customer

Customer name:

Improvement area 1:

Specific actions to take:

Timing:

First review the current set of trade terms, against the points highlighted within the SDL then highlight 3 areas that you

could address, that would improve your trade terms agreement, with specific actions.

Improvement area 2:


Timing:

Improvement area 3:


Timing:

Additional Notes

Capture any notes coming out of the SDL asset that you feel you would like to discuss during the virtual session.


Trade Investment: To optimize Trade investment follow 5 key steps

1.1: Define customer

segmentation framework

1.2: Map customers

according to segmentation

criteria (scoring)

1.3: Define investment

guidelines per customer

segment

3.1: Define / Refine Trade

Investment local trade

terms (TT) approach in

accordance with global TT

principles guidance2

3.2: Define and prioritize the

Trade Investment

counterparts (e.g. range,

display, data sharing,

merchandising, etc.)

3.3: Build Trade Investment

plans by customer and

customer type according to

commercial objectives and

guidelines

3.4: Build migration plan and

timeline per customer

4.1: Consolidate Trade

Investment plans

4.2: Quantify volume and

financial impact by

customer, customer type

and globally

4.3: Refine and adjust

Trade Investment plans

by customer and

customer type

4.4: Perform risk

assessment3 and final

validation

5.1: Translate plans into

tangible negotiation

steps and tactics

5.2: Execute and track

negotiation progress

5.3: Implement ongoing

tracking and

governance of Trade

Investment plan

execution

5.4: Reallocate / course

correct Trade

Investment depending

on performance of

counterparts

2.1: Understand gross to

net evolution with focus on

Trade Investment (as % of

gross sales1)

2.2: Analyze Trade

Investment types and

evolution for each customer

2.3: Analyze conditionality

level of counterparts per

customer

2.4: Analyze evolution of

the overall profit pool

(between Beam Suntory

and customer)

1 Highest level of realized income before deduction of any investment

3 Check risk of inconsistency across customers and flag potential outliers

2 All Terms proposal should be signed off by Legal Counsel for compliance

Analyze current Trade

investment

Evaluate business impact

and validating plans

Build Trade Investment

plans

Understand “who to win

with“ through a customer

segmentation approach

Negotiate, implement

and track

1 2 3 4 5

8


Trade Investment consists of

deciding where and how to invest

conditionally with customers, in

order to deliver our brand and

commercial strategy.

In HORECA sell-in investments

(PUSH) will be planned and

managed in accordance with the

standard trade terms structure.

For indirect customers (non- and

off-trade) there will be a need to

increase visibility and control

over any sell-out investments

(PULL) to better understand and

manage customer profitability.

Trade Investment: Example in On Trade & ECom

Illustrative ExampleHighlights

9


Tasks from SDL 3: Price & BAS

10

Think of your main customer relationship and give it a balance of power score between 1-10,

where 10 means the power is fully in your favour, and 1 means power is fully in their favour.

Balance of Power

Additional Notes




Pricing: To optimize price follow 5 key steps

2.1: Establish target price

positioning for core BSI BQ’s

2.2: Define shelf price

architecture logic and ensure

consistency with strategic role per

size and channel

2.3: Compare executed price

architecture with pricing

strategy to identify:

Brands / brand qualities positioned

differently than intended

Price segments where BSI brands

are currently not present

Inconsistency in price logic across

BQ sizes and brands

3.1: 5.1: 1.1: Review Demand Space

analysis to understand current

landscape and sources of

growth

1.2: Analyze the sub-

categories or and identify

areas where BSI brands and

BQ are currently under or over

indexed, or white space

opportunities

1.3 Determine the consumer

price thresholds from relevant

data sources price bands for

the sub-categories or (incl.

identification of key

competitors)

1.4: Understand Beam

Suntory pricing index cross

channel and BQ size

1 2 3 4 5

Understand the consumer

& category landscape

Determine optimum

Price Change

Build Consumer Price

elasticity model

Define priority

actions

Define the strategic

pricing model

3.1: Understand demand

sensitivity to price (e.g. how

does a change in average

price affect share?)

3.2: Determine price

elasticity (incl. absolute and

cross brand quality elasticity)

and likelihood of consumers

switching to competing

brands following price

increases

5.1: Prioritize actions that

will optimize BSI price point

segment by brand


plan to translate





stories

5.3: Set-up capability to

track implementation and

performance impact

4.1:Suggested Consumer She

lf Price Strategy across BQ

sizes

Suggested

RSP/Price Strategy: BSI RGM

to suggest recommended

consumer shelf price via pricing

strategy to Commercial teams.

Then Commercial to localize

to customers

4.2: Recommended internal price

setting and follow up: BSI RGM to

recommend internal (triple) net

prices to commercial teams.

adjusted with the distributors

margin, to compare across

markets

4.3: Quantify opportunities

leveraging elasticity coefficients

11


BAS: To optimize BAS follow 5 key steps

1 2 3 4 52.1: Define the competitive set

and the resulting category

‘norms’ 2

2.2: Identify the

opportunities, gaps and

duplication

2.3: Define the BQ size ‘roles’

based on occasions for BSI

2.4: Define the target Brand

Architecture Strategy:

• Define BQ size architecture

• Define the Price logic using

‘Anchor’ BQs that have been

evaluated against

competition. Use indexing

from these anchor BQs to

determine pricing for the rest

of the Brand.

1.1: Review Category

performance to identify the

volume & value growth ‘drivers’

and ‘drainers’

• Category, sub-category /

segment performance

• Brand & brand quality

• Channel / Customer

dynamics

1.2: Review relative

performance by occasion,

channel / market (or

combination) vs competition

and identify areas of under or

over index, or white space

opportunities

1.3: Review current Price

architecture by occasion,

channel / customer type

3.1: Ideate and identify all

the potential scenarios

3.2: Validate each scenario

against the 3 key criteria

• Desirable to the

Consumer/Shopper &

customer

• Feasible to make it

• Economically viable

3.3: Select & Build the final

Brand Architecture Strategy

scenario to test


plan to translate





stories

5.2: Set-up capability to

track implementation and

performance impact.

Progress to pricing chapter

4.1: Determine test

methodology (e.g. Conjoint,

Expert Panel, In-market test,

Minimum Viable Product, etc.)

4.2: Test the scenario (using

selected methodology in

4.1) to validate

4.3: Re-run 3.2: Validate

against the 3 key criteria

• Desirable to the

Consumer/Shopper &

customer

• Feasible to make it

• Economically viable

Review the category &

current portfolio

Test and validate the

Brand Architecture

Strategy

Build and Model Brand

Architecture Strategy

scenariosDefine priority

actions

Define the Brand

Architecture Strategy

Framework

2 Where there is no category norms (e.g. new demand space or occasions), start by understanding the consumer's needs and consumption occasions

12

Consider this step only

in a scale market


Example of Brand Architecture Strategy in HORECA

Industry ExamplesHighlights

Brand Architecture Strategy is

about selling the right brand quality

size, at the right price, in the right

place for the right occasion, within its

competitive set

BAS has 3 guiding principles:

• Each BQ has a distinct role (for

BSI and customer)

• Each BQ size uniquely addresses

a shopper need (based on an

occasion, within a channel)

• The proposition is differentiated

across channels

In HORECA, consumption occasions

are usually immediate, and at the

point of purchase this leads to

different format options based on the

channel and outlet profile

Single-serve sizes for hospitality Mixers for drink combinations

Scaled concentrates for food-serviceMixers and concentrates for bars

13


Tasks from SDL 4: Promotion

14

Promotions

Reflect for a moment on the Promotions chapter within this SDL. How could you improve how you run

promotions with your customer? Capture a real personal action below and build it into you plan over the

next few months.

Additional Notes




1 2 3 41.1: Review brand promotion

strategy across Beam Suntory

portfolio (what we want to

achieve through promotions?)

1.2. Review qualitative

category / shopper insights


promotion intensity across

market:

• Promo versus Non-promo

volume

• Depth of discount

• Frequency of promotion


promotional spend by total

company, brand and customer

3.1: Define / refine

promotion guidelines by

brand, customer and

customer type according to

desired outcomes

3.2: Allocate promotion

budget across brand and

customer (aligned to

customer segmentation

model)

4.1: Build updated promotion

calendar in compliance with

guidelines, aligned to brands

and customer strategic intent

4.2: Model the resulting

impact of the updated

promotion calendar

4.3: Pressure test for

foreseeable executional

issues (e.g. calendar overlaps,

cross border / channel /

customer inconsistencies, etc.)

55.1: Perform pre & post

evaluation on an on-going

basis versus the guideline.

Review profitability vs

promotional and price

strategy

5.2: On-going course

correction of promotion

plans through a disciplined,

continuous and consistent

post-promo evaluation

process

Promotion: To optimize promotion follow 5 key steps

2.1: Assess / evaluate

individual promotion

performance (e.g. uplift,

ROI, customer margin, etc.)

2.2: Evaluate executed

promotion plan by

channel / customer to

identify opportunities and

inconsistencies

2.3: Identify and

consolidate promotional

learnings and insights

(e.g. successful mechanics,

outliers to correct, negative

ROI to challenge, etc.)

Note: Consider the Triple Win impact across the 3 lenses (Consumer / Shopper, Customer, Beam Suntory) in all of the above steps

Understand promotional

landscape and role of

promotion

Define / refine promotion

guidelines by brand and

customer

Translate into customer

plans and model impact

On-going evaluation

& course correction

Assess / evaluate

promotion performance

15

Promo council review Promo council review


Promotion: Example in On Trade

Promotion is about optimising our

activity to convert shoppers to

purchase at the right level of

investment.

In on trade, promotion uses many

different mechanics, either

deployed in the end outlet, or are

made available to the outlet via an

intermediary e.g. wholesaler.

Whilst the primary objective is to

drive incremental sales and

revenue, many of the activities are

intended to reinforce consumer

and customer awareness of, and

loyalty to, our brands by

enhancing the consumer and

customer experience.


16


Promotion is about optimising our

activity to convert shoppers to

purchase at the right level of

investment.

In the Off-Trade promotion is

used to drive volume and revenue

through:

• Attracting new consumers

• Increasing frequency of

purchase

• Increasing weight, or volume of

purchase

• Increasing value of purchase

The type of promotion used

should be driven by a clear,

measurable commercial objective,

and respect the Brand

architecture defined by BAS

Promotion: Example in Off Trade


17


Key learnings

18

1 2 3 4

5 6 7 8

9 10 11 12

13 14 15 16


Key learnings

17 18 19 20

21 22 23 24

25 26 27 28

29 30 31 32

19


Key learnings

33 34 35 36

37 38 39 40

41 42 43 44

45 46 47 48

20


Key learnings

49 50 51 52

53 54 55 56

57 58 59 60

61 62 63 64

21


Key learnings & Exercise feedback

SDL & VIRTUAL SESSION 1:

Mix


Trade Terms

22


Key learnings & Exercise feedback


Price & BAS


Promotions

23


Action planning

What will I do differently as a result of the programme

What will I do differently? How will I measure this? When?

Summary of the review with my line manager

24


Planning Templates


The persuasive selling process

Summarize

the

situation

State

the

idea

Explain

how it

works

Reinforce

key

benefits

Close

26


Balance of Power Planning Template

27

In their favour POWER In our favour

FACTOR 1 2 3 4 5 6 7 8 9 10

Brands

Preparation

Knowledge

People

Organisational alignment

BATNA

Trading history

Time

Initiative

Size

Conditionality

Resources

Capability

Dependency

RMFCM Virtual Programme Delegate handbook

Documents

Transcript of RMFCM Virtual Programme Delegate handbook