Selling High with Intelligent Planning

Transcription

1

2 Dipu Mukherjee Go-To-Market Director of Innovation & Analytics Frito-Lay North America - A Division of PepsiCo dipu.mukherjee@pepsico.com Selling with Intelligent Planning Rahul Bhattacharya Principal Accenture Analytics Accenture rahul.r.bhattacharya@accenture.com 2

3 Who is PepsiCo? PepsiCo is a global food and beverage powerhouse. Our broad range of more than 3,000 delicious products offers consumers convenient, nutritious and affordable options in nearly every country around the world. Global Beverages Global Snacks Global Nutrition Performance Brands Scale People More than $65 billion revenue 22 billion-dollar brands >200 countries & territories ~280,000 employees 3

4 Agenda Context & Burning Issue Objective & Scope Key Project Elements, Deliverables Modeling, Key Insights Enhancing Account Management Interactive Dashboards Final Thoughts 4

5 Integrated Execution Integrated Execution Closes the Loop Among All Sales Roles and Enables Media-to-Shelf Granular Execution to Maximize Growth Simplify Business Processes KAM DESTINATION TPM PLAYBOOK ZONE DESTINATION Enable with Technology Customer DSL DESTINATION FRONTLINE DESTINATION Close the Loop to Integrate All Sales Roles FRONTLINE MOBILITY Three Key Programs: Infinity Program Destination Programs Analytics & Insights 5

6 GTM Analytics Continuum Role Based Analytics To Achieve Execution Excellence HQ HQ, Frontline Managers Account Teams 1 Visualization 2 Trends & Correlations 3 Actions/Insights VALUE Descriptive Analytics Diagnostic Analytics Predictive Analytics Quick Wins Identify trends Visualizations by role Value Drivers Customer DNA Correlation Segmentation Analysis Business rules Regression Analysis Enhance Current Reporting What happened? Why it happened? What will happen? TIME 6

7 Solving The Burning Issue Current State Future State Key Account Managers spend only 4 hrs/week selling Support structure, account management process is inefficient Manual, timeintensive static customer sell deck preparation process TPO engine provides optimized plan at a customer level Double the selling time spent by Key Account Managers Enable analytics driven mobile account management capability Dynamic interactive selling tool to aid negotiations with buyer Real-time tactical & granular updates to plan 7

8 Objective Demonstrate the power of predictive analytics methods to enhance planning and selling capabilities for account teams Leverage rich customer specific POS data to develop models with high degree of prediction accuracy Bring capabilities to life through interactive dashboards that empower account teams to execute with enhanced certainty Generate insights driven promotion planning and evaluate its impact to the account and the customer 8

9 Scope Customer 109 Stores One Division Store Clusters Premium Mainstream Value Category Leverage rich POS and Frito-Lay financial data to make targeted trade promotion decisions to achieve improved ROI, growth and retailer profitability Data Salty Snacks Category 29 Frito-Lay Product Promotion Groups 52 Competitor Product Promotion Groups POS at UPC, Store, Weekly 121 weeks of data starting wk Frito-Lay Promotion Calendar (APEX) List Price, Promoted Cost, COGS, Inventory, Promoted Price (Finance Team) 9

10 Key Project Elements Data Predictive Planning / Selling Capability Integration Modeling Capability Build Enablement POS data for Salty Snack category Trade promotion information Pricing, Cost Statistical models to predict trade promotion effectiveness What-if simulation of promotional events Projected performance metrics for Frito- Lay and customer Interactive planning, selling & metrics dashboards 10

11 Key Project Deliverables 1. Diagnostics Sales & Share - Growth and Trends Base Price Derivation, Discounts Promotions on Ad, Display, Tactic, Duration 2. Analytics Promotion Coefficients, Volume Decomposition Projected Volume, Units, Sales Events, Seasonality, Cannibalization Effects Promotion Effectiveness, ROI Assessment Planning Dashboards for Scenario Planning Frito-Lay Detailed Metrics Dashboard for Deep Dive into KPIs Selling Dashboard for Metrics of Interest to Customer Model outputs used for simulating thousands of scenarios across PPGs, time, promo tactics, price points. Simulations used for evaluating the volumetric and financial impact Lift, Share Gain, ROI 4. Dashboards 3. Simulations 11

12 05Feb Feb Feb Feb Mar Mar Mar Mar Apr Apr Apr Apr Apr May May May May Jun Jun Jun Jun Jul Jul Jul Jul Jul Aug Aug Aug Aug Sep Sep2014 Sales Volume ( 100s) Modeling Ilustration (Illustrative for PPG X) (Illustrative for PPG X) Model Development & Key Parameters Model Accuracy : 91% Post March Madness Pre Easter Pre Independence Day Independence day Display Flyer Discount Seasonality dollar_off Sales Volume Predicted Volume Actual data for single metropolitan division of a multi-banner supermarket channel (# of weeks = 32) Employed Advanced Multi-Level Bayesian Model Included Effects of Seasonality, Cannibalization, Competitive Activity Utilized Multiple Causal Variables like Feature, Display, Discounts for Baseline and Incremental Computations 12

13 Low PPG Order Total Unit Sales Key Insights: Trade Promotion Volume Driver Performance Low PPG Order Total Promotion Investment Total Sales vs. Incremental Sales PPG Order Total Unit Sales Low Promo Investment vs. CID PPG Order Total Promotion Investment Low PPG 1 1,100 PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG 9 95 PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG 13 2 PPG PPG PPG 16 1 PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG PPG 23 3 PPG 24 5 PPG PPG PPG PPG PPG PPG PPG 25 4 PPG 26 3 PPG 27 1 PPG 28 1 PPG 29 1 PPG PPG PPG PPG 13 PPG 16 Median Value (50 th Percentile): 44 Median Value (50 th Percentile): 0.40 Low Incremental Units ( 000s) Low CID Top 6 PPGs account for 79% of the trade promotion spend. PPG 1 accounts for 37% of the total Trade Promotion spend. Among the 6 PPGs having maximum share of Trade Promotion spend, PPG 3 has the lowest CID at PPG 1 has the highest CID out of 29 PPGs. 13

14 Low PPG Order Total Unit Sales Key Insights: Trade Promotion Profitability Performance Investment Total Sales vs. Incremental Margin PPG Order Total Unit Sales Low Promo Investment vs. ROI PPG Order Total Promotion Investment Low PPG 1 (-$170) PPG 2 $328 PPG 3 $234 PPG 4 $250 PPG 5 $23 PPG 6 $103 PPG 1 (-0.05) PPG PPG PPG PPG XPPG PPG 7 $166 PPG 13 $1 PPG 19 $26 PPG 25 $2 PPG 8 $35 PPG 14 $30 PPG 20 $24 PPG 26 $2 PPG 9 $25 PPG 15 $15 PPG 21 (-$1) PPG 27 $0.95 PPG 10 $39 PPG 16 $5 PPG 22 (-$5) PPG 28 (-$0.40) PPG 11 $105 PPG 17 $15 PPG 23 (-$0.23) PPG 29 $0.30 PPG 12 $20 PPG 18 (-$12) PPG 24 (-$0.45) Low PPG Order Total Promotion PPG PPG PPG PPG PPG PPG 21 (-0.05) 23oz PPG 18 (-0.01) PPG PPG PPG PPG PPG PPG PPG 18 (-0.35) PPG 23 (-0.01) PPG PPG PPG PPG 13 PPG 16 PPG 22 (-0.11) PPG PPG Median Value (50 th Percentile): $18 Median Value (50 th Percentile): 0.41 Low Incremental Margin ( 000s) Low ROI Of the top 6 PPGs, PPG 2, PPG 3 & PPG 4 had maximum Incremental Margin from trade. PPG 1 wipes out almost 18% of the incremental margin earned from promotions of the remaining top 5 PPGs incremental margin. Among the top 6 PPGs with heavy trade spend PPG 4 provides maximum ROI with PPG 1 at the bottom with negative ROI. PPG 11 (1.24) PPG 7 (0.85) have the highest ROI among the top 12 PPGs. 14

15 Key Insights: Top 10 Promo Events that Drive Incremental Units Average Incremental Units for specific promotion combination Event Endcap Display Perimeter Display Front Page Ad Interior Page Ad Dollar Off Event Loyalty Event PPG /$4 PPG /$4 PPG /$4 PPG 4 42 $1.99 Mega $1.49 PPG /$10 Pro Bowl PPG 3 39 $1.99 Mega $1.49 PPG 6 32 Promoted Price $3.00 PPG /$4 PPG 5 25 Promoted Price $2.00 PPG /$ Incremental Units ( 000s) 15

16 Key Insights: Top 10 Promo Events that Drive Incremental Margin Average Incremental Margin for specific promotion combination Event Endcap Display Perimeter Display Front Page Ad Interior Page Ad Dollar Off Event Loyalty Event PPG 6 $31.05 Promoted Price $3.00 PPG 2 $8100 2/$4 PPG 10 $27.04 Promoted Price $4.99 PPG 1 $26.79 Base Price PPG 7 $ /$6 PPG 4 $19.42 Promoted Price $1.99 PPG 11 $18.74 Promoted Price $2.25 PPG 3 $14.44 Promoted Price $1.99 PPG 21 $13.40 Base Price PPG 12 $8.49 2/$5 $- $10 $20 $30 $40 Incremental Margin ( 000s) 16

17 Enhancing Account Management Leveraging the Predictive Analytics Engine to validate opportunities that help Account Teams achieve their internal and external targets P l a n n i n g Store Clustering BU Sales Price Discounts Promotion Tactics Growth Targets P r e d i c t i v e A n a l y t i c s E n g i n e + M e t r i c s G e n e r a t o r Ticket, Net Sales Sales, Vol. Lift Share Change CID, Turns, GMROI Retailer Margin S e l l i n g 17

18 Business Advantage Streamline Communication Effective communication with Customer Team. Discussion points with account team leadership Align Priorities Better selection of promotion event tactics. Selling story for various locations. Leverage PPG/Cluster level Insights Volume/Business planning (Improved forecast) Optimize promotion offering to channel partner. Better planning & insights at portfolio & category level. Call The Best Scenario For the right product. In the right cluster. At the right time. 18

19 Planning Component Scenario Comparison Customer Customer Total $ Sales at List Price (SDV) 5 Incremental Portfolio (FL) Volume/ Base Portfolio (FL)Volume 2 Total $ Sales at Promoted Cost (SDV Trade Spend) 6 Incremental Portfolio (FL) Revenue/ Base Portfolio (FL) Revenue 3 Frito Lay s Vol share Gain in Salty Snacks Category 4 Incremental # of bags sold/ Base # of bags sold 7 Retail Price (i.e., Cost to consumers) 8 SDV Trade Allowance (cost to retailer) 9 (List Price Promo Cost ) * Total Units 19

20 Planning Component Detailed Metrics Customer Total $ Sales at List Price (SDV) 6 2 Incremental # of bags sold/ Base # of bags sold 3 Incremental Portfolio (FL) Volume/Base Portfolio (FL) Volume 4 Incremental Category Volume/Base Category Volume 5 Total $ Sales at Promoted Cost (SDV Trade Spend) 7 8, 9 10, 11 12, Incremental Margin $ for every $ of promo Investment Cost per Incremental Dollar Sales Decomposition of Total Unit Sales Decomposition of Portfolio (FL) Volume Decomposition of Category Volume Frito Lay s Vol share Gain in Salty Snacks Category 20

21 Selling Component Retailer Metrics Customer Total Units Sold Total Dollars Sale by the Retailer 5 Gross Margin Return on Investment : Amount of Gross Profit dollars that a retailer will make in a year for every dollar invested in inventory 3 4 Dollar Profit earned by Retailer # of times the display/product turn during an event 6 Gross Margin Return on Inventory Investment : Defined as Gross Margin/Average Inventory Cost 21

22 Final Thoughts Introduced an efficient account management process by leveraging predictive analytics Empowered account teams with information that enable category and customer growth Enhanced negotiation opportunity with buyer through real-time inmarket insights Embraced digital disruption by creating mobile analytics solution in the cloud 22

23 Questions 23