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Sales Analysis for Management Consultants and Business Analysts

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This presentation will help you drastically improve your knowledge and skills in improving and developing sales and marketing through a series of practical cases. It is designed for people who want to become management consultants, business analysts or have to run and optimize sales and marketing on daily bases. In the course you will learn 3 things:
1. How to understand main challenges in sales and marketing
2. How to improve sales and marketing in order to increase margin and profit
3. Where to look for savings and improvements, how to calculate potential savings in Excel and implement them
The presentation is based on my 14 years of experience as a consultant in top consulting companies and as a Board Member responsible for strategy, improvement and turn-arounds in biggest companies from Retail, FMCG, SMG, B2B and services sector that I worked for.
This is part of my online course on Supply Chain for Management Consultants. Check the link to get a discount: http://bit.ly/SalesAnalysisManagementConsulting

Published in: Business
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Sales Analysis for Management Consultants and Business Analysts

  1. 1. 1 Sales and Marketing Analysis for Management Consultants Practical guide how to grow and improve the business of your customer
  2. 2. 2 Sales and marketing has been evolving constantly. Therefore, you have to become very analytical and innovative to improve and find new ways to grow business of your customers
  3. 3. 3 The presentation is organized into 4 sections FMCG Retail B2B Services B2C Services SMCGCommodity
  4. 4. 4 Theory Examples of real life sales analyses In the presentation there will be 2 things
  5. 5. 5 Thanks to this presentation you will learn how in practice to analyze and improve sales and marketing
  6. 6. 6 Sales Analysis for Management Consultants $190 $10 What you will see in this presentation is a part of my online course where you can find also all the calculations in Excel Click here to check my course
  7. 7. 7 Retail - Examples of business analyses of Sales and Marketing
  8. 8. 8 Introduction to Retail section
  9. 9. 9 This section will cover 3 things Overview of Sales and Marketing in Retail Main Challenges in Sales and Marketing Cases of Business Analyses
  10. 10. 10 Overview of Sales in Retail
  11. 11. 11 Retail is the sales channel for many products, including its own private label. More and more they also join marketplaces and act as a multichannel
  12. 12. 12 Retail supply chain is not only long and involves many parties but also is fluctuating a lot
  13. 13. 13 Overview of Marketing in Retail
  14. 14. 14 In Retail a lot of the marketing activities are around building the right concept and supporting it via bought media. Customer base is also crucial Create retail concept that is a good fit with your target group Put it in front of the customer Build online presence and act as a multichannel Increase brand awareness via bought media Build loyalty program and customer base Increase customer purchase frequency via bought media Use the customer base to up-sell and cross-sell
  15. 15. 15 For a typical Retailer owned media, especially his stores and products are the most important marketing channel. Nevertheless, he spends a lot of money on bought media Bought MediaOwned Media Earned Media ▪ TV, radio, newspaper ads ▪ Paid digital reach: Adwords, Facebook, Pinterest, Instagram, YouTube, paid digital banners etc. ▪ SEM ▪ Leaflets, inserts etc. ▪ Outdoor advertisement ▪ Affiliate programs ▪ Catalogues ▪ Advertisement at your partner’s media i.e. Retailer ▪ Sponsored content ▪ Product placement ▪ Influencers (Youtubers, bloggers, celebrities) ▪ Brand Ambassadors ▪ Participation in wider loyalty program ▪ Stores, especially fascia ▪ If you have private label then your product and the package ▪ Your people, including uniforms ▪ Your web presence especially your website, fanpages on Facebook and , YouTube channels ▪ Newsletters, sms and customer base ▪ Mobile apps and the underlying customer (contact) base ▪ Own content and content marketing ▪ Referral Program ▪ Your own loyalty program ▪ Free users (in Freemium and Free trial) ▪ Partners’ owned media when you do not have to pay to get in touch with end-consumers ▪ Partner’s sales force and customer support ▪ Guest blogging, guest presence in YouTube channels etc. ▪ Word Of Mouth especially Virality ▪ Presence in aggregators of reviews (i.e. Yelp) ▪ Organic SEO ▪ Co-branding with FMCG especially in advertisement ▪ User Generated Content (post by fans, recommendations, photos, reviews etc.)
  16. 16. 16 Main challenges in Sales and Marketing for Retail
  17. 17. 17 There are number of challenges in the Sales and Marketing in Retail Multichannel Price transparency Price comparison sites and aggregators Increasing importance of marketplaces Saturation point in penetration LFL growth Expansion modelPrivate Labels Big data Self service in offline on the level of online Changing value proposition Changing formats and concepts
  18. 18. 18 Introduction to cases for Retail
  19. 19. 19 In this section I will show you examples of analyses that you will be doing in Retail for sales and marketing Analyses of stores by cohorts Product range analysis Sales and margin efficiency of retail Introduction to Expansion Saturating existing markets Expansion strategy into other countries Multichannel Cannibalization of sales by offline and online stores Optimizing sales process at the store
  20. 20. 20 Analyses of stores by cohorts - Introduction
  21. 21. 21 You can analyze a retail chain by following cohorts / segments Vintage (which year it was open) Format type Format evolution phases Location Type of city Type of traffic Others
  22. 22. 22 You usually show for specific cohort / segment the following metrics Sales density (Sales per sq. m) Margin density (Sales per sq. m) Number of stores Total sales generated by the cohort Total margin generated by the cohort % in total sales generated % in total margin generated
  23. 23. 23 Product range analyses - Introduction
  24. 24. 24 In Retail you have space that you divide among different product groups Group A Group B Group E Group C Group D Group F
  25. 25. 25 For every group you should calculate the total margin using sales density, % Gross Margin and space allocated to specific group % Gross Margin Sales density Margin density Space in sq. m x Total margin x
  26. 26. 26 You have to analyze their performance and decide how to split the space 4 250 3 000 2 500 2 000 2 400 4 000 Group A Group B Group C Group D Group E Group F Sales density In USD/ sq. m 40% 55% 44% 60% 40% 60% Group A Group B Group C Group D Group E Group F % Margin In % 1 700 1 650 1 100 1 200 960 2 400 Group A Group B Group C Group D Group E Group F Margin density In USD/ sq. m 400 200 50 300 200 100 Group A Group B Group C Group D Group E Group F Space allocation In sq. m Total margin generated by the store
  27. 27. 27 Product range analyses - Example
  28. 28. 28 Let see how we can allocate the space differently for our example 4 250 3 000 2 500 2 000 2 400 4 000 Group A Group B Group C Group D Group E Group F Sales density In USD/ sq. m 40% 55% 44% 60% 40% 60% Group A Group B Group C Group D Group E Group F % Margin In % 1 700 1 650 1 100 1 200 960 2 400 Group A Group B Group C Group D Group E Group F Margin density In USD/ sq. m 400 200 50 300 200 100 Group A Group B Group C Group D Group E Group F Space allocation In sq. m Total margin generated by the store
  29. 29. 29 Different split of space among categories enabled us to increase the Gross Margin by USD 227 K 680 744 330 413 360 210 192 120 240 570 Margin generated Basic Option In thousands of USD Margin generated - Modified Option In thousands of USD Group A Group B Group C Group D Group E Group F Total margin generated by the shop In sq. m 1 857 2 084
  30. 30. 30 Sales and margin efficiency of retail
  31. 31. 31 Imagine that you were asked to have a look at the efficiency of retailer with many concepts in cities in Poland Gdańsk Szcecin Bydgoszcz Poznań Wrocław Katowice Łódź Kraków Rzeszów Kielce Lublin Warszawa Białystok Gdynia-Sopot Gliwice Olsztyn Opole Zielona Góra Current number of stores
  32. 32. 32 In the case of efficiency there are to main KPIs retailers use Sales density Margin density
  33. 33. 33 You want to see which format and city are the most efficient Formants / Concepts City ▪ What is the sales density per format? Which one is the best ▪ What is the margin density per format? Which one is the best ▪ What is the sales density per city? Which one is the best ▪ What is the margin density per city? Which one is the best
  34. 34. 34 Introduction to Expansion
  35. 35. 35 Once your business model is right you will want to expand and grow. There are some options to do that Increase size in current locations Enter new locations but still the cities were you are already Enter new cities in your country Enter new countries Add new brands but within the same concept Create new concepts in Retail Enter totally new business models
  36. 36. 36 Expansion of current model - options
  37. 37. 37 When it comes to expanding of current business models there are 2 aspect at which you should look: management and type of format Own Stores Franchising Joint Management Stand alone store Store in Store / Corner
  38. 38. 38 Saturating existing markets - intro
  39. 39. 39 If you are present on specific market you want to know when you will reach a saturation market – the maximal number of shops that will not cause much cannibalization. Below 3 different cases 1 000 1 500 800 2 000 # of stores Saturation 1 Saturation 2 Saturation 3
  40. 40. 40 Obviously in most cases the general number is not enough as you are present in many regions Gdańsk Szcecin Bydgoszcz Poznań Wrocław Katowice Łódź Kraków Rzeszów Kielce Lublin Warszawa Białystok Gdynia-Sopot Gliwice Olsztyn Opole Zielona Góra Current number of stores
  41. 41. 41 Therefore you calculate saturation point by regions Gdańsk Szcecin Bydgoszcz Poznań Wrocław Katowice Łódź Kraków Rzeszów Kielce Lublin Warszawa Białystok Gdynia-Sopot Gliwice Olsztyn Opole Zielona Góra Targeted number of stores Current number of stores
  42. 42. 42 Saturating existing markets - case
  43. 43. 43 Number of stores by provinces Gdańsk Szcecin Bydgoszcz Poznań Wrocław Katowice Łódź Kraków Rzeszów Kielce Lublin Warszawa Białystok Gdynia-Sopot Gliwice Olsztyn Opole Zielona Góra Current number of stores
  44. 44. 44 Number of stores by provinces Gdańsk Szcecin Bydgoszcz Poznań Wrocław Katowice Łódź Kraków Rzeszów Kielce Lublin Warszawa Białystok Gdynia-Sopot Gliwice Olsztyn Opole Zielona Góra Targeted number of stores Current number of stores
  45. 45. 45 Where to expand – catchment area The potential space to be added In thousands of sq m 79 38 30 148 Total space occupied by Retailer shops Increase in cities where there are already some Retailer shops Increase s in cities where there are no Retailer shops Total targeted # of sq m The potential number of shops that can be added In # of shops 98 77 60 235 # of Retailer shops Shops that can be opened in cities where there are already some Retailer shops Shops that can be opened in cities where there is no Retailer shop Total targeted # of shops
  46. 46. 46 Expansion strategy into other countries - Introduction
  47. 47. 47 Creating an expansion strategy requires you to do a number of things Define criteria and weights for the criteria Gather data on the markets Create the ranking of markets to enter Define limits that you have Set priorities ▪ 4-6 criteria on the basis of which you will value specific markets ▪ Ranking on the basis of criteria and weights created ▪ Money for expansion ▪ People for expansion ▪ Logistics ▪ Lead time due to your supply chain ▪ Limitation in stock
  48. 48. 48 Expansion strategy into other countries - Example
  49. 49. 49 Let’s imagine that you were to create an expansion plan for expansion into new countries for a fashion brand
  50. 50. 50 As you remember we have create a ranking of countries Define criteria and weights for the criteria Gather data on the markets Create the ranking of markets to enter Define limits that you have Set priorities ▪ 4-6 criteria on the basis of which you will value specific markets ▪ Ranking on the basis of criteria and weights created ▪ Money for expansion ▪ People for expansion ▪ Logistics ▪ Lead time due to your supply chain ▪ Limitation in stock
  51. 51. 51 For this we will use 4 criteria and we will estimate the size of the markets in standard stores ▪ GDP per capita PPP ▪ Similarity in product range ▪ Competition level ▪ Franchising infrastructure and the Criteria for measuring the attractiveness of the market Potential of the market ▪ Potential was measured using the size of the markets in terms of potential number of standard stores
  52. 52. 52 Potential markets for expansion – Ranking vs Potential – region 2,2 2,3 2,5 2,6 2,7 2,7 2,9 3,0 3,3 3,3 3,4 3,4 3,5 3,6 3,9 4,3 Philipines North America Australia Turkey South America Indonesia China Africa ex USRR Western Europe India Middle East Malaysia Thailand Eastern Europe Poland Ranking of market attractiveness (1-low; 6-High) Potential of countries / regions to capture assuming achieving share like in Poland In standard stores 579 2 215 76 324 1 870 1 255 4 287 4 944 534 1 136 6 288 208 134 209 215 100 Philipines North America Australia Turkey South America Indonesia China Africa ex USRR Western Europe India Middle East Malaysia Thailand Eastern Europe Poland
  53. 53. 53 Potential markets for franchise – Ranking vs Potential – region 0 500 1 000 1 500 2 000 2 500 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 Poland Middle East Philippines Eastern Europe Russia + Asian ex USRR Thailand Malaysia Indonesia Australia North America South America Turkey Western Europe Potential In number of standard stores Attractiveness (1-Low;6-High)
  54. 54. 54 Example of expansion into other business models
  55. 55. 55 You have 12 different business models. You can start with one model and then expand into other models SaaS E-commerce Media site 2-sided market User Generated Content Mobile Applications B2B Service Retail B2C Service B2C Products B2B Products Freelancing
  56. 56. 56 Developed companies can operate multiple models under one or many companies. Have a look at Amazon SaaS E-commerce Media site2-sided market UGC B2B Service B2C ServiceRetailer
  57. 57. 57 Multichannel
  58. 58. 58 What is multichannel?
  59. 59. 59 For the customer your off-line and on-line presence are the same brand and he expect the on-line experience to be at least as good as off-line On-line belonging to retail chain Off-line retail chain One brand
  60. 60. 60 This means that certain things should be managed across both channels Products Price Customer Data Relations with the customers Customer Experience Marketing communication
  61. 61. 61 Main problems with multichannel
  62. 62. 62 Let’s have a look at the main problems with multichannel Cannibalization with off-line Different customer experience Operational problems coming from on-line Pricing Management Competition with pure players Big data unified approach Segmentation Marketing communication People and firms take advantage of lower on-line pricing Falling traffic in off- line
  63. 63. 63 Pricing dilemma - case study
  64. 64. 64 Imagine that you have a chain of physical stores and on-line store. What pricing would you use On-line belonging to retail chain Off-line retail chain ?$ 100 $ 90 On-line market
  65. 65. 65 How you would estimate the potential for growth? Establish what is the structure of the market? ▪ What is the current share of on-line in the market ? ▪ Is it growing? Decide what you want to have in terms of share of on-line in your sales? What price difference between on-line and off- line is acceptable What price difference is noticeable? ▪ What is the current share of on-line in your sales ? ▪ Do you want to be above or below the market? ▪ What price difference between on-line and off-line customer treat as fair? ▪ Do we want to be fair? ▪ What price difference is noticeable? ▪ Do we want to stay unnoticed?
  66. 66. 66 Imagine that you have a chain of physical stores and on-line store. What pricing would you use On-line belonging to retail chain Off-line retail chain ?$ 100 $ 90 On-line market ▪ The difference in prices is fair it is not bigger than 6% ▪ The customer notices / cares if the difference in prices is up to 3%
  67. 67. 67 Imagine that you have a chain of physical stores and on-line store. What pricing would you use $ 90 $ 100$ 93 Fair prices $ 97 Practically the same prices Practically the same prices Here you are not on-line competitive $ 94
  68. 68. 68 Imagine that you have a chain of physical stores and on-line store. What pricing would you use $ 93 Do you want the on-line to have bigger share in your sales than it has in the whole market? Yes No Do you want the difference between on-line and off-line to be fair? Do you want the difference between on-line and off-line to be fair? Yes No Yes No $ 93< > $ 94 $ 98 $ 100 $ 100 $ 93- $ 100 $ 100
  69. 69. 69 Cannibalization of sales - Introduction
  70. 70. 70 When you start building more stores you are bound to cause a lot of cannibalization
  71. 71. 71 You can minimize the cannibalization by picking the right locations. Just remember that cannibalization may be there by design
  72. 72. 72 There are plenty of reasons why you could be still ok with cannibalization You are reaching new customers You are taking away more from competitors than your own chain You are killing competition More visibility = equivalent on marketing money Increased purchasing power especially when it comes to rent
  73. 73. 73 Cannibalization of sales by on-line
  74. 74. 74 On-line is a different story as it can cannibalize any store at your chain and it is beyond your control. You actually more likely to hurt yourself than your competition
  75. 75. 75 Still there are some reasons why as a multichannel you would be ok with some level of cannibalization Market is going on-line – if you don’t have on-line customer they may altogether leave you Some customers will pick-up the things at the store and buy additional products You may start managing your stock differently – i.e. long tail only on-line You can improve the customer experience without hiring a lot of people
  76. 76. 76 Cannibalization of sales - case study
  77. 77. 77 Imagine that you have to estimate the impact of cannibalization of off-line channel by on-line on margins.
  78. 78. 78 The Retailer has 400 shops in the whole Europe and sells 3 types of goods Toys Fashion Hardware
  79. 79. 79 You have to check which effect is bigger Margin loss due to cannibalization ▪ For most products you will have lower margins for the same products in on-line sales than in off-line ▪ Difference in margin will be different for different groups Margin gain from additional purchases generated by on-line ▪ If the product is picked-up at the off-line store you can sell additional products to some of the customers
  80. 80. 80 To estimate the cannibalization effect we will have to look at 2 things Total on-line sales Difference in Margins Margin Lost Additional Margin Gained Net impact of on-line on off-line P&L - Off-line margin On-line margin Average additional value bought Number of transaction picked at the off-line store - % generated by cannibalizing off- line sales x % Gross Margin on additional things bough x
  81. 81. 81 Sales Analysis for Management Consultants $190 $10 For more check the link with discount below. You will find there a lot of cases with calculations and Excel provided. Click here to check my course
  82. 82. 82 FMCG - Examples of business analyses of Sales and Marketing
  83. 83. 83 Introduction to sales and marketing in FMCG
  84. 84. 84 In this section consists of 3 parts Overview of the sales and marketing in FMCG Main challenges in sales and marketing Cases of business analyses
  85. 85. 85 Overview of Sales in FMCG
  86. 86. 86 FMCG are all branded goods that you consume frequently during the year. In this category we have food, cosmetics and other similar products
  87. 87. 87 FMCG sells mainly through retailers. Some go into independent distribution via own website and own stores
  88. 88. 88 Overview of Marketing in FMCG
  89. 89. 89 FMCG is pushing the customer through phases that make him at the end loyal customer Create brand awareness Teach people how to use your products Get the product in front of the potential customers Convert the brand aware people into customers Retain the customer Up-sell and cross sell
  90. 90. 90 Therefore, marketing concentrates on 7 tasks Make people aware of the brand and product Get the product in front of him Find and conquer niches Expand the product Expand the brand Manage price, price perception and discounts Create mechanisms that will sell / market on their own
  91. 91. 91 FMCG is probably the most advanced when it comes to marketing efforts and uses practically every way to get its message across. Mainly uses paid methods Bought Media Owned Media Earned Media ▪ TV, radio, newspaper ads ▪ Paid digital reach: Adwords, Facebook, Pinterest, Instagram, YouTube, paid digital banners etc. ▪ SEM ▪ Leaflets, inserts etc. ▪ Outdoor advertisement ▪ Affiliate programs ▪ Catalogues ▪ Advertisement at your partner’s media i.e. Retailer ▪ Sponsored content ▪ Product placement ▪ Influencers (Youtubers, bloggers, celebrities) ▪ Motivation schemes for the sales force of your Partner ▪ Brand Ambassadors ▪ Store-in-Stores (offline and online) ▪ Participation in wider loyalty program ▪ Your product and the package ▪ Your site - your factory, office, stores ▪ Your people ▪ Your web presence especially your website, fanpages on Facebook and , YouTube channels ▪ Newsletters, sms and customer base ▪ Mobile apps and the underlying customer (contact) base ▪ Own content and content marketing ▪ Referral Program ▪ Your own loyalty program ▪ Free users (in Freemium and Free trial) ▪ The products of your partners (powered by) ▪ Partners’ owned media when you do not have to pay to get in touch with end-consumers ▪ Partner’s sales force and customer support ▪ Guest blogging, guest presence in YouTube channels etc. ▪ Word Of Mouth especially Virality ▪ Presence in aggregators of reviews (i.e. Yelp) ▪ Evangelists and ▪ Organic SEO ▪ Social Following platforms i.e. Quora ▪ Co-branding (Intel inside) ▪ User Generated Content (post by fans, recommendations, photos, reviews etc.)
  92. 92. 92 Main challenges in Sales and Marketing in FMCG
  93. 93. 93 There are number of challenges in the Sales and Marketing of FMCG Picking the right distribution mix Managing price and price perception across channels Customer trends i.e. for Millennials, Generation Z Private labels done by Retailers Saturation point in penetration Saturation point in consumption Growing importance of Marketplaces Growing importance of online Digital Marketing Leveraging brand and expanding product Loyalty programs Dwindling importance of direct sales force
  94. 94. 94 Introduction to cases for FMCG
  95. 95. 95 In this section I will show you examples of analyses that you will be doing in sales and marketing in FMCG Sales channel analysis How to expand the brand? Sales force efficiency How to find the white spaces uncovered by your brand Direct-to-customer model vs current sales mix How to analyze the motivation system of sales force
  96. 96. 96 Sales channels comparison
  97. 97. 97 Let’s look at how a FMCG gets its products to the customers Own shops Retail chains E-commerce Marketplaces Wholesalers
  98. 98. 98 How to expand the brand – Introduction?
  99. 99. 99 Let’s have a look at milk producer that wants to expand its product range Leader in milk 2nd place in butter 25 products considered
  100. 100. 100 There are things you should consider when selecting the right products to be developed within the same brand Is the product consistent with the current brand? Does it require the same distribution? Do you have strong players on the market you enter? What is the potential of the market? Are there customers who already think that you have the product? What is the growth rate of the market for the product?
  101. 101. 101 How to expand the brand – Solution
  102. 102. 102 After we have gone through research we got the following results. This suggest that we should start with yoghurt and yellow cheese 0 50 100 150 200 250 300 350 0 0,5 1 1,5 2 2,5 3 Market size In mln USD Attractiveness (1-Low;3-High) Cheddar Cottage cheese Yoghurt Milk Desserts (i.e. Monte) Yellow (swiss) cheese Ice cream Feta
  103. 103. 103 Sales force efficiency analysis – Introduction
  104. 104. 104 Let’s have a look at the sales force efficiency in Poland of a cosmetics producers 20 sales rep in Poland A sales rep visits all customers in his region You want to improve efficiency
  105. 105. 105 Before we go to the Excel let’s talk about what we have to know to judge the efficiency What is the full cost per 1 sales rep? What value creates a specific type of customer? Is it worth to visit a customer? How often should I visit specific type of customers? How I can improve efficiency of the sales rep? What can I standardize automate? What I can outsource to cheaper provider?
  106. 106. 106 Sales force efficiency analysis – Solution
  107. 107. 107 Let’s have a look at the sales force efficiency in Poland of a cosmetics producers 20 sales rep in Poland A sales rep visits all customers in his region You want to improve efficiency
  108. 108. 108 20 195 30 124 31 210 Current Margin Maximazation without outsourcing and reduction of headcount Margin Maximazation with outsourcing and reduction of headcount When we look at the data we can see that there are regions where we are really weak. In those regions there is a big potential for improvement Total net margin generated In thousands of USD
  109. 109. 109 Sales force efficiency analysis – Practical tips
  110. 110. 110 There are 3 groups of solutions that will help you improve the efficiency of your sales team Focus on what creates value Improve efficiency of daily work Outsource / Specialize ▪ Calculate the net margin per type of customer ▪ Check the return on a visit and decide how often it should be made ▪ Concentrate on those customer for which the net margin per visit is the highest ▪ For other create more self-service solutions ▪ Rearrange the regions to minimize the travelling ▪ Implement remote solutions to reduce the need to travel ▪ Create a standard of the visit to maximize the impact ▪ Go through the tasks that should be performed during the visit and check whether they make sense and create value ▪ Create standards and modules ▪ Create software to automate part of the process ▪ Plan the trips to maximize the usage of their time ▪ Standardize fleet, phone, software and others ▪ Pick the optimal legal solution of cooperating with sales rep to optimize the cost of labor ▪ Outsource what you can to local suppliers i.e. merchandising ▪ Create support teams for the sales rep that can do part of his job in a cheaper manner and higher quality at the same time
  111. 111. 111 How to find the white spaces untouched by your brand – Introduction
  112. 112. 112 Let’s have a cosmetics producer and see where is the potential for development You are a market leader in Poland You have entered 5 years ago Romania You want to find white spaces in Poland
  113. 113. 113 How to find the white spaces untouched by your brand – Solution
  114. 114. 114 Let’s have a cosmetics producer and see where is the potential for development You are a market leader in Poland You have entered 5 years ago Romania You want to find white spaces in Poland
  115. 115. 115 0,2 0,4 0,9 1,3 1,4 2,0 3,2 7,0 6,6 4,8 1,2 1,0 0,8 2,1 2,5 1,0 R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 R11 R12 R13 R14 R15 R16 When we look at the data we can see that there are regions where we are really weak. In those regions there is a big potential for improvement Average and target for regions with smaller sales per capita Sales per person - Currently In USD per Capita
  116. 116. 116 11 172 8 401 4 908 3 174 2 608 1 892 1 861 1 776 1 266 674 205 0 0 0 0 0 37 937 R1 R2 R3 R4 R5 R11 R13 R12 R16 R6 R14 R7 R8 R9 R10 R15 Total Using the data in Excel we can estimate the potential increase in sales by regions Potential of increasing sales In thousands of USD
  117. 117. 117 1% 3% 6% 10% 10% 17% 27% 58% 55% 40% 12% 21% 8% 30% 25% 10% R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 R11 R12 R13 R14 R15 R16 When we look at the data we can see that there are regions where we are really weak. In those regions there is a big potential Average and target for regions with smaller share Share in local market - Currently In %
  118. 118. 118 14 544 11 283 7 099 5 301 4 439 1 609 1 550 1 211 1 067 0 0 0 0 0 0 0 48 104 R1 R2 R3 R4 R5 R13 R11 R6 R16 R7 R8 R9 R10 R12 R14 R15 Total Using the data in Excel we can estimate the potential increase in sales by regions Potential of increasing sales In thousands of USD
  119. 119. 119 Direct-to-customer model vs current sales mix – Introduction
  120. 120. 120 We are back to cosmetics. This time around we will analyze options to get direct-to-customer Currently they use many channels They are considering direct-to-customer models Check e-commerce and own stores
  121. 121. 121 Direct-to-customer model vs current sales mix – Current Solution
  122. 122. 122 How to analyze the motivation system of sales force – Introduction
  123. 123. 123 Motivation plan for sales people can be pretty complicated Region sales plan realization 80% Country plan realization 20% Sales plan realization 80% Qualitative assessment 20% Variable part 40%Fixed part 60% Salary
  124. 124. 124 Person A has the following motivation system. What kind of problems it may cause? Variable part 10%Fixed part 90% Salary
  125. 125. 125 Person B has the following motivation system. What kind of problems it may cause? Sales value plan realization 90% Qualitative assessment 10% Variable part 20%Fixed part 80% Salary ▪ Sales rep can change the price of the product and give discounts
  126. 126. 126 Person C has the following motivation system. What kind of problems it may cause? Sales margin realization 80% Qualitative assessment 20% Variable part 20%Fixed part 80% Salary ▪ All costs covered by the sales rep
  127. 127. 127 Person D has the following motivation system. What kind of problems it may cause? % of sales n/a Fixed part =2x Average salary n/a Salary
  128. 128. 128 How to analyze the motivation system of sales force – Solution
  129. 129. 129 If the Person A has the following motivation system you can have the following problems Variable part 10%Fixed part 90% Salary Problems that may occur ▪ Variable part is too small ▪ The sales rep will not be motivated to drive the sales and put additional effort
  130. 130. 130 If the Person B has the following motivation system you can have the following problems Sales value plan realization 90% Qualitative assessment 10% Variable part 20%Fixed part 80% Salary ▪ Sales rep can change the price of the product and give discounts Problems that may occur ▪ Majority of the variable part depends on sales value which is not preferable solution as this does not drive the margin creation ▪ The sales rep has a control over the price and discounts so he will be tempted to increase discounts to get more sales. In this way he will hurt total margin
  131. 131. 131 If the Person C has the following motivation system you can have the following problems Sales margin realization 80% Qualitative assessment 20% Variable part 20%Fixed part 80% Salary ▪ All costs covered by the sales rep Problems that may occur ▪ In this example we have margins instead of sales value which is much better solution ▪ However, all cost are covered by the sales rep which may lead the sale rep to minimize his expenditure rather than to maximize the margin for the company
  132. 132. 132 Person D has the following motivation system. What kind of problems it may cause? % of sales n/a Fixed part =2x Average salary n/a Salary Problems that may occur ▪ The fixed part may be big enough for the sales rep not to care too much about the sales level ▪ His variable part is just a percentage of sales . Due to this there is a great probability that he will not care about the margin ▪ Moreover, there is no plan of sales / margin so he will work only as much as he needs to cover his expenses
  133. 133. 133 Juice producer – motivation system of sales force – Introduction
  134. 134. 134 We will now have a look at a company selling branded juice in Romania that has 2 type of sales force They sell via wholesalers to independent stores and retail chains Area Managers sell to wholesalers Sales reps sell to stores and retail chains
  135. 135. 135 We will now have a look at a company selling branded juice in Romania that has 2 type of sales force
  136. 136. 136 The area managers have the following motivation system Sales value plan realization - wholesale 70% Qualitative assessment 10% Variable part 40%Fixed part 60% Salary ▪ You have to have at least 80% of plan realization to get any bonus Sales value plan realization - stores 20%
  137. 137. 137 The area managers has the following motivation system Sales value plan realization - stores 90% Qualitative assessment 10% Variable part 30%Fixed part 70% Salary ▪ You have to have at least 80% of plan realization to get any bonus
  138. 138. 138 Juice producer – motivation system of sales force – Solution
  139. 139. 139 Sales Analysis for Management Consultants $190 $10 For more check the link with discount below. You will find there a lot of cases with calculations and Excel provided. Click here to check my course
  140. 140. 140 B2B Services - Examples of business analyses of Sales and Marketing
  141. 141. 141 Introduction to sales and marketing in B2B Services
  142. 142. 142 In this section consists of 3 parts Overview of the sales and marketing in B2B Services Main challenges in sales and marketing Cases of business analyses
  143. 143. 143 Overview of Sales in B2B Services
  144. 144. 144 B2B services are all services sold from one company to another. It can be simple standardized services or customized professional service
  145. 145. 145 B2B Service firms use mainly its own sales force team. However, more and more options are available
  146. 146. 146 Overview of Marketing in B2B Services
  147. 147. 147 B2B service firms are pushing the customer through phases that make him at the end loyal customer that buys full portfolio Create brand awareness Get your content in front of the customer Explain what you can do for the customer Get your sales machine in front of the customer Sell first service to the customer Up-sell and cross sell Retain the customer
  148. 148. 148 In B2B Services the Marketing is only supporting sales when it comes to bigger customers. With smaller ones it is very similar to SMCG or FMCG Bought Media Owned MediaEarned Media ▪ Events, Trainings, Conferences marketing ▪ Motivation schemes for the sales force of your Partner ▪ TV, radio, newspaper ads ▪ Paid digital reach: Adwords, Facebook, Linkedin, YouTube, paid digital banners etc. ▪ Affiliate programs ▪ SEM ▪ Leaflets, inserts etc. ▪ Outdoor advertisement ▪ Catalogues ▪ Sponsored content ▪ Product placement ▪ Your people and their network ▪ Previous customers ▪ Training Marketing ▪ Webinars ▪ Gadgets ▪ Your web presence especially your website, fanpages on Facebook and , YouTube channels ▪ Newsletters, SMS to own customer base ▪ Own content and content marketing ▪ Referral Program ▪ Free users (in Freemium and Free trial) ▪ Word Of Mouth ▪ The products of your partners (powered by) ▪ Partners’ owned media when you do not have to pay to get in touch with end-consumers ▪ Partner’s sales force and customer support ▪ Guest blogging, guest presence ▪ Presence in aggregators of reviews and marketplace (i.e. Yelp, Fiverr) ▪ Social media i.e. Linkedin ▪ Organic SEO ▪ Social Following platforms i.e. Quora, ▪ Co-branding (Intel inside) ▪ User Generated Content (post by fans, recommendations, photos, reviews etc.)
  149. 149. 149 Main challenges in sales and marketing in B2B Services
  150. 150. 150 There are number of challenges in the Sales and Marketing in B2B services Retaining the customer Locking-in the customer for longer Bundling services to create new value proposition Taking over processes from customers Scalable sales methods Growing importance of Marketplaces Adjusting acquisition method to the LTV of the customer Up-selling and cross- selling Valley of death
  151. 151. 151 Introduction to cases for B2B Services
  152. 152. 152 In this section I will show you examples of analyses that you will be doing in sales and marketing in B2B Services How you can price consulting projects? Calculating the price and profitability of a consulting project Analyzing the profitability of sales channel Up-selling and cross-selling Which customer should the firm remove? Which price formula is the best for the firm’s profits?
  153. 153. 153 How you can price consulting projects?
  154. 154. 154 The most useful pricing models are…. Fixed fee ▪ Difficult to define scope ▪ Non-standard project ▪ Scope evolving Times & Materials ▪ Simple projects ▪ Projects with big buffers ▪ Projects where you want to hide the fees Success / performance fee ▪ When performance can be measured by external KPIs ▪ To supplement previous methods Limits ▪ To limit certain spending's esp. in the case of time and materials limits (floors an caps are used) Per usage ▪ This is used in many technical industries where you cannot control the immediate result of the consulting so link it with the usage / availability of certain resource DescriptionExample ▪ $ 100 K Markups ▪ Markups can be a part of fixed fee structure and times and materials ▪ Markup is put on purchases done by consulting company for the project ▪ $ 200/h ▪ Traveling costs ▪ Food costs ▪ % of Target achieved ▪ $ 100 K for achieving certain goal ▪ $ 200/h but no more than $ 100 K ▪ $ 10/flight hour ▪ $ 20 K/plane ▪ 15% on costs incurred
  155. 155. 155 Analyzing the profitability of sales / marketing methods Introduction
  156. 156. 156 In order to see whether certain marketing channel / tactics makes sense you have to look at 2 KPIs LTV CAC ▪ All costs generated by a specific method of sales / marketing ▪ Number of customers that you acquired thanks to this ▪ Net margin generated from specific customer over the course of your relation
  157. 157. 157 You should have defined what is the relation between LTV and CAC that you are looking for LTV CAC LTV CAC= 3x LTV CAC= 5x LTV CAC= 7x
  158. 158. 158 Efficiency of marketing activities
  159. 159. 159 Every business is using a lot of marketing channels to get customers
  160. 160. 160 In order to see whether certain marketing channel / tactics makes sense you have to look at 2 KPIs LTV CAC
  161. 161. 161 Cross-selling – Introduction
  162. 162. 162 In B2B Services since you have already a nice base you try to sell them more of your products. The best example are big 4 auditing companies Auditing Tax and Legal advisory Business advisory Transactional advisory Digital Transformation Technological Advisory 100% 50% 30% 40% 10% 10%
  163. 163. 163 Cross-selling makes sense only under certain conditions Wide customer base You own the customer You have other products to sell New products require the same sales machine Similar margins New products cannot endanger current revenues New products have to be consistent with your brand
  164. 164. 164 We will now have a look at company doing aircraft maintenance services 2 sites – in Poland and Croatia They have 20 customers using heavy maintenance They consider cross-selling painting and engineering services
  165. 165. 165 Cross-selling – Solution
  166. 166. 166 If we look at our customer base we can earn additional USD 225 K from painting only from our customer base Number of aircrafts 40 25 20 15 10 10 10 10 5 5 JetBlue LOT Flybe Alitalia Lufthansa KLM Air France Bulgaria Air Air Astana Keyn Airways 60 38 30 23 15 15 15 15 8 8 JetBlue LOT Flybe Alitalia Lufthansa KLM Air France Bulgaria Air Air Astana Keyn Airways Margin on painting In thousands of USD
  167. 167. 167 Which customer should you remove – Introduction
  168. 168. 168 Before we go to the case a few words why it makes sense to get do away with some customers Focus on profitable customers Get rid off problematic customers Get rid off dedicated solutions Create space for new customers Prepare for recession Scale down the business
  169. 169. 169 Let’s imagine that you are advising a firm providing analytical services to other companies 200 customers in 6 countries 500 business analysts and data scientists Find out which customer you have to remove
  170. 170. 170 Which customer should you remove – Solution
  171. 171. 171 As a reminder you are advising a firm providing analytical services to other companies 200 customers in 6 countries 500 business analysts and data scientists Find out which customer you have to remove
  172. 172. 172 When you look at the data you can see that some customer have much lower margin Monthly hours sold In thousands of hours 20 10 5 3 10 20 5 1 2 4 Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 Group 7 Group 8 Group 9 Group 10 10 10 15 20 5 10 5 10 10 10 Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 Group 7 Group 8 Group 9 Group 10 Average margin per hour In USD per hour 25% 33% 50% 50% 13% 50% 50% 25% 29% 25% Group 1 Group 2 Group 3 Group 4 Group 5 Group 6 Group 7 Group 8 Group 9 Group 10 % Margin In %
  173. 173. 173 780 54 834 Current Margin Customer portfolio optimization Target Margin If we remove the Group 5 and replace them with customers that generate higher margins we can boost our margin by USD 54 K Potential of increasing monthly margin In thousands of USD
  174. 174. 174 Which customer should you remove – Practical Tips
  175. 175. 175 There are many ways to “remove the customer” Significantly increase the price (i.e. 2x) Create automated solution for the customer Optimize the costs of delivery to improve profitability Sell part of the business Carve out the customers into separate business units Breach the contract Find new supplier for the customer
  176. 176. 176 Which price formula is the best for my profits – Introduction
  177. 177. 177 Now we will try to see which price formula is better for aircraft maintenance service company 2 sites – in Poland and Croatia Consider 4 different formulas Consider 3 different scenarios
  178. 178. 178 Now we will try to see which price formula is better for aircraft maintenance service company Materials Scenario 1 ▪ $ 30 K Number of manhours needed ▪ 3 000 man-hours Probability of the scenario ▪ 30% Scenario 2 ▪ $ 20 K ▪ 3 400 man-hours ▪ 25% Scenario 3 ▪ $ 15 K ▪ 3 800 man-hours ▪ 45%
  179. 179. 179 Now we will try to see which price formula is better for aircraft maintenance service company Materials Times & Materials ▪ Cost of Materials increased by 15% markup Labor ▪ $ 50 per 1 man- hour ▪ We look at the real man-hours needed Fixed Fee ▪ $ 25 K ▪ $ 140 K Mixed Option 1 ▪ $ 25 K ▪ Fixed: $ 140 K ▪ On top of that 15% of the labor cost calculated using Times & Materials formula Mixed Option 2 ▪ $ 25 K ▪ Fixed: $ 140 K ▪ On top of that for all man-hours above 2 800 we use the Time & Materials formula but using the price of $ 90 per 1 man- hour
  180. 180. 180 Which price formula is the best for my profits – Solution
  181. 181. 181 Now we will try to see which price formula is better for aircraft maintenance service company 2 sites – in Poland and Croatia Consider 4 different formulas Consider 3 different scenarios
  182. 182. 182 It seems that the Mixed Option 2 price formula is the best solution Gross Margin In thousands of USD 90 58 84 117 Times & Materials Fixed Fee Mixed Option 1 Mixed Option 2
  183. 183. 183 For how much should I sell my consultants?
  184. 184. 184 Sales Analysis for Management Consultants $190 $10 For more check the link with discount below. You will find there a lot of cases with calculations and Excel provided. Click here to check my course
  185. 185. 185 B2C Services - Examples of business analyses of Sales and Marketing
  186. 186. 186 Introduction to sales and marketing in B2C Services
  187. 187. 187 In this section consists of 3 parts Overview of the sales and marketing for B2C Services Main challenges in sales and marketing for B2C Services Cases of Business Analyses
  188. 188. 188 Overview of Sales in B2C Services
  189. 189. 189 In terms of sales and marketing B2C services are similar to Retail.
  190. 190. 190 B2C sales model is similar to the one that we can observe in Retail. Online, take away and home delivery are even more important
  191. 191. 191 Main challenges in Sales and Marketing in B2C Services
  192. 192. 192 When it comes to sales and marketing we can be talking about 3 different models Services performed at specialized place Scalable productized services Services performed at customer place that require a person
  193. 193. 193 We will start with the challenges for the first model Services performed at specialized place Scalable productized services Services performed at customer place that require a person
  194. 194. 194 In services performed at specialized places we have the following main challenges Location Brand Awareness Finding a good fit between target group and value proposition Actively growing traffic Growing and using customer database incl. Big Data Customer retention Expansion model Improving conversion and ATV Actively creating demand Up-selling and cross- selling Changing value proposition Changing formats and concepts
  195. 195. 195 Let’s move to the second model Services performed at specialized place Scalable productized services Services performed at customer place that require a person
  196. 196. 196 In services performed at customer place that require a person we have the following main challenges Brand Awareness Word of Mouth Servicemen efficiency that limits capacity of sales Increasing importance of marketplaces and aggregators Content marketingPricing Keeping high NPS Up-selling and cross- selling
  197. 197. 197 Let’s have a look at the last example Services performed at specialized place Scalable productized services Services performed at customer place that require a person
  198. 198. 198 In scalable productized services we have the following main challenges Saturation point in consumption Saturation point in penetration Customer retention Cross selling and up- selling Big data Private Labels / Own products Adding to the offer potential subtitutes Customer trends i.e. for Millennials, Generation Z Acquisition of new customers Bundling products with Strategic partners Expanding into new groups / user cases
  199. 199. 199 Introduction to cases for B2C Services
  200. 200. 200 In this section I will show you examples of analyses that you will be doing in sales and marketing in B2C Services What is the optimal price increase level – coffee shop Does it make sense to introduce new services or product – salad fast food How to increase the net profit by 10% – beauty saloon
  201. 201. 201 What will be the effect of the price increase – Introduction
  202. 202. 202 The impact of the price change on your profit will depend on a few factors How big the increase is What your competition does? How aware of prices are the customers? Price sensitivity The role of the product you are increasing the price Components of the average basket
  203. 203. 203 Imagine that you want to estimate the price change impact for a small chain of local coffee shops 20 location in Poland Sell coffee, cakes, sandwiches and quiches 3 different motives for going there
  204. 204. 204 What will be the effect of the price increase – Solution
  205. 205. 205 Imagine that you want to estimate the price change impact for a small chain of local coffee shops 20 location in Poland Sell coffee, cakes, sandwiches and quiches 3 different motives for going there
  206. 206. 206 If we look just at coffee gross margin we should increase the price of coffee by 9%. If we take into account total gross margin 4% would be a better choice 0 2 000 4 000 6 000 8 000 10 000 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% 0 5 000 10 000 15 000 20 000 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% 29% 30% Gross Margin – Only for Coffee vs price increase In thousands of USD Gross Margin – Coffee and Cakes vs price increase In thousands of USD
  207. 207. 207 Does it make sense to introduce new services or products – Introduction
  208. 208. 208 You have to remember that when you introduce a new product or service it may have benefits but it can also cause problems It can create new reasons to visit the place It can increase frequency New product can attract new customers New product can disturb the delivery of basic product It can require additional assets or training It can repel current customer base from coming It can increase margins May be not compatible with your concept
  209. 209. 209 Imagine that you are analyzing a salad fast food that has just introduced 2 new products and you want to check whether it makes sense 100 location in Easter Europe Fast food for salads They have just introduced coffee and soups to the menu
  210. 210. 210 Does it make sense to introduce new services or products – Solution
  211. 211. 211 Imagine that you are analyzing a salad fast food that has just introduced 2 new products and you want to check whether it makes sense 100 location in Easter Europe Fast food for salads They have just introduced coffee and soups to the menu
  212. 212. 212 100 15 115 Gross Margin before the soup introduction The effect of soup introduction Gross margin after we introduce soups Introduction of soups makes economical sense. When it comes to coffee it causes a lot of operational problems and lower gross margin Gross Margin change due to soup introduction In thousands of USD 100 20 12 92 Gross Margin before the coffee introduction Drop in Gross Margin of salads Increase in Gross Margin from Coffee Gross margin after we introduce coffees Gross Margin change due to coffee introduction In thousands of USD
  213. 213. 213 How to increase the net profit by 10% – Introduction
  214. 214. 214 Imagine that you supporting a beauty saloon chain in Easter Europe in their attempt to increase net profit 50 location in Easter Europe They mainly do manicure They are looking for ways to increase profit by 10%
  215. 215. 215 There are number of ways in which you can increase the profit by 10% Get new customers Convince existing ones to come more often Upsell and cross-sell customers during their visit Introduce new product Increase prices
  216. 216. 216 How to increase the net profit by 10% – Solution
  217. 217. 217 Imagine that you supporting a beauty saloon chain in Easter Europe in their attempt to increase net profit 50 location in Easter Europe They mainly do manicure They are looking for ways to increase profit by 10%
  218. 218. 218 Option 1 – Increase price Description Required change to increase net margin by 10% Commodity is a basic good used in commerce that is interchangeable with other commodities of the same type ▪ We increase the price for manicure for all customers ▪ Current price is 25 USD per visit ▪ 5% increase of the price Option 2 – Increase Frequency ▪ We increase the frequency of visiting our beauty shop ▪ Currently, an average customer does 1.4 visit per customer ▪ Increase from 1.4 to 1.6 visit per customer Option 3 – Increase Customer Base ▪ We increase customer bases size – acquire new customers ▪ Currently, we have 60 K of customers per shop ▪ Increase customer base from 60 K to 68 K Option 4 – New product ▪ We introduce new product ▪ Currently we do not sell any additional product ▪ We need 36% of our customer to buy the new product
  219. 219. 219 Sales Analysis for Management Consultants $190 $10 For more check the link with discount below. You will find there a lot of cases with calculations and Excel provided. Click here to check my course
  220. 220. 220 Commodity - Examples of business analyses of Supply Chain
  221. 221. 221 Introduction to Commodity section
  222. 222. 222 In this section you will learn 3 things Overview of the sales and marketing in Commodity Main challenges in sales and marketing in Commodity business model Cases of Business Analyses
  223. 223. 223 Overview of Sales in Commodity
  224. 224. 224 In commodity quit often is about finding the right mix of products to be sold rather than acquiring new customers
  225. 225. 225 Commodity sells to bigger customer directly and using wholesaler or marketplaces to smaller customers
  226. 226. 226 Overview of Marketing in Commodity
  227. 227. 227 Marketing of commodity due to margins is usually very limited. Yet there is alternative approach to it as well Limit marketing expenses Build on the basis of commodity service and market it
  228. 228. 228 FMCG is probably the most advanced when it comes to marketing efforts and uses practically every way to get its message across. Mainly uses paid methods Bought Media Owned Media Earned Media ▪ TV, radio, newspaper ads ▪ Paid digital reach: Adwords, Facebook, Pinterest, Instagram, YouTube, paid digital banners etc. ▪ SEM ▪ Leaflets, inserts etc. ▪ Outdoor advertisement ▪ Affiliate programs ▪ Catalogues ▪ Advertisement at your partner’s media i.e. Retailer ▪ Sponsored content ▪ Product placement ▪ Influencers (Youtubers, bloggers, celebrities) ▪ Motivation schemes for the sales force of your Partner ▪ Brand Ambassadors ▪ Store-in-Stores (offline and online) ▪ Participation in wider loyalty program ▪ Your product and the package ▪ Your site - your factory, office, stores ▪ Your people ▪ Your web presence especially your website, fanpages on Facebook and , YouTube channels ▪ Newsletters, sms and customer base ▪ Mobile apps and the underlying customer (contact) base ▪ Own content and content marketing ▪ Referral Program ▪ Your own loyalty program ▪ Free users (in Freemium and Free trial) ▪ The products of your partners (powered by) ▪ Partners’ owned media when you do not have to pay to get in touch with end-consumers ▪ Partner’s sales force and customer support ▪ Guest blogging, guest presence in YouTube channels etc. ▪ Word Of Mouth especially Virality ▪ Presence in aggregators of reviews (i.e. Yelp) ▪ Evangelists and ▪ Organic SEO ▪ Social Following platforms i.e. Quora ▪ Co-branding (Intel inside) ▪ User Generated Content (post by fans, recommendations, photos, reviews etc.)
  229. 229. 229 Introduction to cases for commodity
  230. 230. 230 In this section I will show you examples of analyses that you will be doing in commodity for supply chain Managing capacity Customer catchment area Supplier catchment area Plywood – finding the best spot for your factory
  231. 231. 231 Supplier catchment area
  232. 232. 232 Locations of some factories depends on the so called supplier catchment area. You are looking for area where you have sufficient amount of resources or suppliers K K K K K K K K K K K K K K K K K K K K
  233. 233. 233 Below some examples of businesses where the supplier catchment area is crucial Energy production Production based on big usage of specific mineral Production based on natural resources Production based on specific subcontractors ▪ Coal, oil, wind ▪ Salt, ceramic tiles ▪ Wood, paper, plywood, slaughter houses, food processing ▪ Small domestic appliances, Silicon Valley
  234. 234. 234 Customer catchment area
  235. 235. 235 The customer catchment area is important in picking the right location for the factory. Both B2B as well as B2C
  236. 236. 236 If you want to standardize the work I recommend the following approach Define on what depends your catchment area Gather data Draw catchment area – how big it is? See which customers are within the catchment area Estimate the demand and make the decision
  237. 237. 237 0.02-0.04 0.00-0.02 0.04-0.06 0.06-0.09 > 0.9 Cost of transportation EUR/lWhere to expand – catchment area
  238. 238. 238 SC Johnson Oriflame Colgate Henkel Unilever Reckitt Benckiser PLC Estee Lauder Companies Gillette Procter & Gamble Avon Beiersdorf L'Oreal K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K K KK K Cosmetics producers Others K Customers within the catchment area
  239. 239. 239 Catchment area / reach analysis - B2B
  240. 240. 240 Finding the best spot for your factory – Introduction
  241. 241. 241 Let’s have a look at plywood producer that has 2 factories and is considering where to build the third one 2 plants 3 potential locations for the 3rd plant CC Wikimedia.org
  242. 242. 242 There are things you should consider when choosing the location for you factory Sufficient amount of raw materials / suppliers in the catchment area Sufficient number of customers in the catchment area Cost of transportation of raw materials to the factory Cost of transportation of finished goods to customers Local labor market – sufficient amount of workers and wages Cost of electricity Support from local government
  243. 243. 243 Finding the best spot for your factory – Excel
  244. 244. 244 SMCG - Examples of business analyses of Supply Chain
  245. 245. 245 Introduction to SMCG section
  246. 246. 246 In this section you will learn 3 things Overview of the SMCG supply Chain Main Challenges in Supply Chain in SMCG Cases of Business Analyses
  247. 247. 247 Overview of Supply Chain in SMCG
  248. 248. 248 SMCG are all branded goods that you consume infrequently during your life. In this category we have cars, domestic appliances and other similar products
  249. 249. 249 SMCG supply chain is extremely complicated on the supplier side
  250. 250. 250 Main challenges in Supply Chain in SMCG
  251. 251. 251 SMCG supply chains have to face many challanges Many suppliers and sub-contractors Short lead times Focus on minimizing Inventory Flow of information between partners Multichannel Lean manufacturing principles applied to Supply Chain Automation Modularization and Standardization Customization Non-standard transportation modes Supply Chain of added services and products
  252. 252. 252 Introduction to cases for SMCG
  253. 253. 253 In this section I will show you examples of analyses that you will be doing in SMCG for supply chain Transportation mode vs value density Car Industry – Planning the flow of finished goods Kanban Continuous flow in production
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