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SKU Rationalization
Reduce business complexity with minimal impact to
Revenues, Profitability and Customer Satisfaction
A non-traditional approach to SKU rationalization was                complexity, while maintaining Customer Satisfaction.
undertaken. Rather than a Product-centric view and                   Approximately 30% of SKUs were rationalized with
seeing which SKU’s were contributing marginally to                   minimal impact to revenues, profitability & Customer
overall revenues and profits, a Customer-centric view                retention.
was implemented. This framework reduced business


   Client : A leading B2B Retailer of Personalized Gift Products



    • Business had over 5000 SKU’s
      across a few unique Product
      Platforms. Each platform had
      SKU’s across many style groups
      and colors.
    • Style groups and colors were
      investigated for marginal
      contributions to Revenues.
    • It was found that only a few
      key style groups and colors
      accounted for over 90% of
      revenues




   • Further, it was found that key style groups and colors remained consistent year-on-year
   • And that Customer repurchases on deleted style groups and colors were not significantly impacted the
     following year
   • Recommendations made to rationalize marginal style groups and colors, leading to approximately 30% SKU
     reduction and significant cost savings in business complexity and working capital.
   100%
                                                                          Reactivation Continued SKUs   Reactivation Discontinued SKUs
            30%        30%            31%       30% Blue       Customer 49%
    80%                                                        Segment1 44%


    60%
                                                               Customer 57%
            26%        25%            26%       28% Gunmetal   Segment2 64%


    40%     10%        11%                                     Customer 36%
                                      11%
                                                12% Red
                                                               Segment3 34%
            11%        11%            11%       10% Black
    20%
            11%        10%             8%        6% Burgundy   Customer 15%
                        5%             5%        5% Green      Segment4 13%
            5%
                                                     Rest
    0%
          2008-09     2009-10        2010-11   2011-12               0%        10%      20%      30%    40%      50%      60%      70%
Y O U R PA R T N E R F O R
D ATA A N A LY T I C S S E R V I C E S
                                        ADVANCED ANALYTICAL SOLUTIONS
                       Industry                                Business Focus              Tools and Techniques
       Consumer Finance                               Investment Optimization          SAS, SPSS, R, VBA
           Credit Cards                               Revenue Maximization             Cluster analysis
           Loans and Mortgages                        Cost and Process Efficiencies    Factor analysis
           Retail Banking & Insurance                 Forecasting                      Conjoint analysis
           Wealth Management                          Predictive Modeling              Perceptual maps
       Consumer Goods and Retail                      Risk Management                  Neural Networks
           CPG & Retail                               Pricing Optimization             Chaid / CART
           Consumer Durables                          Customer Segmentation            Genetic Algorithms
       Manufacturing and Supply Chain                 Supply Chain Management          Support Vector Machines
             High Tech OEM’s                                                           Sentiment Analysis
             Automotive
             Logistics & Distribution

                                                                                              GLOBAL EXPERIENCE.
                  MANAGEMENT TEAM
                                                                                               PROVEN RESULTS.

      Roy K. Cherian
      CEO
      Roy has over 20 years of rich experience in marketing, advertising and media
      in organizations like Nestle India, United Breweries, FCB and Feedback
      Ventures. He holds an MBA from IIM Ahmedabad.



      Anunay Gupta, PhD
      COO & Head of Analytics
      Anunay has over 15 years of experience, with a significant portion focused
      on Analytics in Consumer Finance. In his last assignment at Citigroup, he was
      responsible for all Decision Management functions for the US Cards
      portfolio of Citigroup, covering approx $150B in assets. Anunay holds an
      MBA in Finance from NYU Stern School of Business.

      Buck Chintamani
      EVP, Strategic Initiatives & Business Development
      Buck has extensive experience working with global clients across sectors.
      He was an early employee at Infosys, a founding team member at supply-
      chain software startup - Yantra, and part of the management team at RFID
      sector startup - Reva. Most recently, he was the Vice-President for Service
      Partner Strategy and Programs at product lifecycle management software
      company, PTC. Buck has an MBA from IIM Ahmedabad.


      Kakul Paul
      Business Head, CPG
      Kakul has over 6 years of experience within the CPG industry. She was
      previously part of the Analytics practice as WNS, leading analytic initiatives
      for top Fortune 50 clients globally. She has extensive experience in what
      drives Consumer purchase behavior, market mix modeling, pricing &
      promotion analytics, etc. Kakul has an MBA from IIM Ahmedabad.




 CONTACT                                                                                                    www.marketelligent.com
                                                   MARKETELLIGENT, INC.
                            80 Broad Street, 5th Floor, New York, NY 10004
                 1.212.837.7827 (o) 1.208.439.5551 (fax) info@marketelligent.com

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Reduce 30% of SKUs with Minimal Revenue Impact

  • 1. SKU Rationalization Reduce business complexity with minimal impact to Revenues, Profitability and Customer Satisfaction A non-traditional approach to SKU rationalization was complexity, while maintaining Customer Satisfaction. undertaken. Rather than a Product-centric view and Approximately 30% of SKUs were rationalized with seeing which SKU’s were contributing marginally to minimal impact to revenues, profitability & Customer overall revenues and profits, a Customer-centric view retention. was implemented. This framework reduced business Client : A leading B2B Retailer of Personalized Gift Products • Business had over 5000 SKU’s across a few unique Product Platforms. Each platform had SKU’s across many style groups and colors. • Style groups and colors were investigated for marginal contributions to Revenues. • It was found that only a few key style groups and colors accounted for over 90% of revenues • Further, it was found that key style groups and colors remained consistent year-on-year • And that Customer repurchases on deleted style groups and colors were not significantly impacted the following year • Recommendations made to rationalize marginal style groups and colors, leading to approximately 30% SKU reduction and significant cost savings in business complexity and working capital. 100% Reactivation Continued SKUs Reactivation Discontinued SKUs 30% 30% 31% 30% Blue Customer 49% 80% Segment1 44% 60% Customer 57% 26% 25% 26% 28% Gunmetal Segment2 64% 40% 10% 11% Customer 36% 11% 12% Red Segment3 34% 11% 11% 11% 10% Black 20% 11% 10% 8% 6% Burgundy Customer 15% 5% 5% 5% Green Segment4 13% 5% Rest 0% 2008-09 2009-10 2010-11 2011-12 0% 10% 20% 30% 40% 50% 60% 70%
  • 2. Y O U R PA R T N E R F O R D ATA A N A LY T I C S S E R V I C E S ADVANCED ANALYTICAL SOLUTIONS Industry Business Focus Tools and Techniques Consumer Finance Investment Optimization SAS, SPSS, R, VBA Credit Cards Revenue Maximization Cluster analysis Loans and Mortgages Cost and Process Efficiencies Factor analysis Retail Banking & Insurance Forecasting Conjoint analysis Wealth Management Predictive Modeling Perceptual maps Consumer Goods and Retail Risk Management Neural Networks CPG & Retail Pricing Optimization Chaid / CART Consumer Durables Customer Segmentation Genetic Algorithms Manufacturing and Supply Chain Supply Chain Management Support Vector Machines High Tech OEM’s Sentiment Analysis Automotive Logistics & Distribution GLOBAL EXPERIENCE. MANAGEMENT TEAM PROVEN RESULTS. Roy K. Cherian CEO Roy has over 20 years of rich experience in marketing, advertising and media in organizations like Nestle India, United Breweries, FCB and Feedback Ventures. He holds an MBA from IIM Ahmedabad. Anunay Gupta, PhD COO & Head of Analytics Anunay has over 15 years of experience, with a significant portion focused on Analytics in Consumer Finance. In his last assignment at Citigroup, he was responsible for all Decision Management functions for the US Cards portfolio of Citigroup, covering approx $150B in assets. Anunay holds an MBA in Finance from NYU Stern School of Business. Buck Chintamani EVP, Strategic Initiatives & Business Development Buck has extensive experience working with global clients across sectors. He was an early employee at Infosys, a founding team member at supply- chain software startup - Yantra, and part of the management team at RFID sector startup - Reva. Most recently, he was the Vice-President for Service Partner Strategy and Programs at product lifecycle management software company, PTC. Buck has an MBA from IIM Ahmedabad. Kakul Paul Business Head, CPG Kakul has over 6 years of experience within the CPG industry. She was previously part of the Analytics practice as WNS, leading analytic initiatives for top Fortune 50 clients globally. She has extensive experience in what drives Consumer purchase behavior, market mix modeling, pricing & promotion analytics, etc. Kakul has an MBA from IIM Ahmedabad. CONTACT www.marketelligent.com MARKETELLIGENT, INC. 80 Broad Street, 5th Floor, New York, NY 10004 1.212.837.7827 (o) 1.208.439.5551 (fax) info@marketelligent.com