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Activity Based Costing (ABC) –
1. Cross-functional cost-accounting to determine the true business cost and profitability of a business process of activity. 2. An accounting method that enables a business to better understand how and where it makes profit. In ABC, all major activities within a cost center are identified and the costs of performing each are calculated, including costs that cross-functional boundaries. The resulting costs are then charged to the product, product line, customer or supplier that caused the activity to be performed. ABC provides a more complete picture than traditional accounting methods of the profits and the costs of doing business, fine-tuned to a particular category, vendor or item. It also includes those costs that add or delete value for the consumer.
All Commodity Volume (ACV) – The dollar volume of all goods sold through a specific
market/channel over a specified period of time. Market level ACV is the projected dollar volume of all goods sold within a market.
Alternative Formats – Channels of distribution other than the traditional supermarket channel (e.g.
club, mass, drug).
Annual Equivalent Volume/Household – A method of equivalizing volume, enabling analysis of
purchases or consumption without regard to product form (e.g., creates an "apples to apples" comparison: liquid to powder detergent, 2-liter soda to 12-pk soda)
Balance Sheet – One of the major summary financial statements of a company. It summarizes the value
of a company’s assets, liabilities and resulting net worth (total assets minus total liabilities) at a certain point in time (e.g. at the end of a company’s fiscal year).
Blended Gross Margin – The total gross margin generated by a group of categories or
subcategories (see Contribution to Margin).
Buying Rate (Annual Expenditures) – The total volume ($ or units) purchased among the total
number of households purchasing the product group. Buying Rate = TTL Volume Purchased # of Buying Households
Cash Generator – A Category strategy which focuses on the ability of a category or products within a
category to generate cash flow (i.e. high product turns relative to payment terms).
Category – A group of products and services that the consumer identifies as being interrelated and
Category Business Plan – A structured, detailed document comprised of the following elements:
category definition, category structure, category role, summary of the category assessment, category scorecard, category strategies, category tactics (assortment, pricing, promotion, shelf presentation, product supply), and implementation plan.
Category Definition – The process of determining the products and services that make up a category
and its segmentation or structure.
S. or "clusters. market or retailer. product sales and market trends of that category. Clustering – A geodemographic (lifestyle/lifestage) approach to grouping stores based on similarities of trading area profiles. the U. Census data differs from panel data.. levels). the methodology and the accountabilities within which the work of Category Management will be transacted. which refers to the day-to-day work required to achieve the strategy.S. a Brand Development Index compares a brand's development within a region or market to its total development. The practice empowers a category manager with full responsibility for the assortment decisions.Category Development Index (CDI) – The level of development of a category for a specific region. Census.). and it may be useful to align retail strategies and operations. inventory levels. which surveys every household in the United States). compared with total development (e.S.S. HH panels capture the shopping behavior of a representative sample of the U. Category Management Business Process – A core component of Category Management..g. With this authority and responsibility. Similarly." Collaborative Relationships – The co-development of category business plans among trading partners presumably creating synergy when the trading partners collaborate to optimize their unique perspectives and resources for a common objective – delivering superior consumer value more profitably. supplier and the market place. the category manager is able to judge more accurately the consumer buying patterns." Clustering reveals shopper composition for each store and percent of each type of shopper living in a store's trading area. which collects a representative sample of the population from panel participants (e. Census Data – Census data represents every individual in a given population (e. % of Category $ Sales in Market "X" CDI = * 100 % of TTL U.g. population. Clustering is also known as "Micromarketing.g. shelf space allocation. Category Definition Category Role Category Review Category Assessment Category Scorecard Category Strategies Category Tactics Plan Implementation Assortment Pricing Shelving Promotion Category Role – The process of assigning a category role (purpose) based upon quantitative and qualitative cross-category analysis considering the consumer. promotions and buying. Category $ Sales Category Management – A supplier-distributor process of managing categories as strategic business units. distributor. 2 . joint distributorsupplier focus in marketing and product supply. the sequence of activities. and then project them to U. TTL U. producing enhanced business results by focusing on delivering consumer value.S.. By emphasizing business results for entire product groups – rather than individual items or brands – Category Management encourages a longer-term.
the market. Cross-Category Analysis – The process of examining multiple categories within a distributor’s category portfolio for the purpose of determining their relative importance in terms of the consumer. generate store orders for warehouse and DSD items. SKU.g. Essential to the success of CAO are complete store-level inventories and accurate point-of-sale scan data.. This measure enables the distributor to discriminate in favor of those items which attract the highest overall category spending. Consumption Index – The percent of a product's sales volume in relation to the household penetration in the category.). flavor. flavor. CAO generally reduces the labor required to generate orders and provides timely information on item movement and inventory turnover at the store level.). The computer system tracks inventory of all items in the store. fill-in needs. size. in concert with scan data. crediting faster selling items of smaller Gross Margin %. Consumer Worth is converted into an index by taking the total category spending associated with the brand (consumer worth) and dividing it by the average category spending for all brands. This measure can be determined at all levels of data analysis (brand. type. Convenience Role – The role (purpose) designated for categories which will be managed to reinforce the distributors image as a full service store by providing good value to the target consumer in meeting less-planned. The distributors focus is to generate profits while providing the target consumer value via time savings creating an image of “one-stop-shopping”. etc. Trip Conversion = Category Buyer Trips in Channel Category Buyer Trips (ALL Channels) Core Shopper – A shopper responsible for the majority (e. Consumer Worth Index – Represents the total amount of category purchases by the consumer who purchases a particular brand (size. Having the computer. Consumer Worth. Contribution to Margin (CTM) Quadrant Analysis – A quadrant analysis showing the relationship between the size of a category (or its subcategories) measured in dollar sales and gross margin %. and the distributor. more than half) of all grocery dollar sales at a given retailer. 3 . Conversion (Buyer) – The percent of category buyers who shopped in a certain channel and also purchased the category within that channel. The formula is: CTM = % of Sales x Gross Margin % CTM recognizes the velocity of a category. CI = % of $ Volume Consumed % of HH's Purchasing Category * 100 Contribution to Margin (CTM) – A tool used to determine the blended gross margin for a group of categories or subcategories. the competition. 2. adjusting for receipts and sales. Buyer Conversion = Category Buyers Purchasing the Category in Channel Category Buyers Shopping the Category in Channel Conversion (Trip) – The percent of total channel shopping trips by category buyers that included a purchase of the category.Computer Assisted Ordering – 1. A retail-based system that automatically generates replenishment orders when the shelf inventory drops below a predetermined level. for their overall contribution to the operations $ profits. etc.
g. Distributor – Retailer or Wholesaler. The standardized hardware/software reduces time. Direct Exchange of Business Information (DEX/UCS) – A store level data interchange system that extends UCS to support Direct Store Delivery (DSD) and allows direct data transfer between the supplier’s delivery personnel and the store’s receiving agent. Product supply (model stock and replenishment) can be managed by the supplier with varying degrees of retailer oversight. The vendor’s salesperson or driver is equipped with handheld terminal in which the details of the order are maintained. A demand index may be calculated for a store's trading area. the handheld terminal is directly connected to the store’s computer and the information is downloaded. including sales revenue and allowance. based on comparing its shopper profile to the demographic composition of a specific geography. store. presence of children. have been credited and all the direct costs involved in moving and handling it from a retailer’s warehouse unloading dock (or store) to the consumer have been allocated. (The result of Activity Based Costing/Profitability performed at the product level). Once the item count is verified by the receiving agent. 4 . Days-of -Supply – The number of days of product stock on hand within a distribution system or retail store. chain. The data is then transmitted to the retailer’s accounting department for reconciliation and payment. Destination Role – The role (purpose) designation for categories. Demand Index = = % of Total Store HH's in demographic segment * Consumption Index in demographic segment "Weighted" Consumption Index in demographic segment Sum of Weighted Consumption Indexes for all demographic segments 3. size. income. education. gender. costs and inaccuracies at the retail back door.. The distributor’s objective is to be identified as the “store of choice” for the target consumer’s needs pertaining to the category. and occupation. bread and fresh baked goods. Demand Index (DI) – A number indicating a product's expected demand. superior value. the percentage of times a consumer purchases bleach with laundry detergent). Cross Purchase Interaction – The likelihood of a consumer purchasing similar or interrelated items in conjunction with their current transaction (e. cluster. (see NEX/UCS) Direct Product Profitability (DPP) – The profit contribution by a product after all revenues. race. A method of delivering merchandise from the manufacturer directly to the retail store. 2. or volume potential. A program that allows direct store delivery of product to a store door at best price versus a warehouse shipment. Major DSD categories include soft drinks. bypassing warehouse facilities. Direct Store Delivery (DSD) – 1. although product check-in is done by both the supplier and the store receiver. beer. 2. DI (TTL Trading Area) = Demographics – A traditional form of segmentation. 1. which identifies target consumers or groups based on characteristics including: Household age. dairy products and fragile items requiring special handling such as potato chips and some gourmet items.Cross-Docking – The practice in which products are transferred from manufacturer to storebound vehicles at the distributors warehouse without extensive handling or long-term storage. Limited availability by brand per quarter. which will be managed to establish the distributor as the dominant store of choice by providing the target consumer with consistent. or zip code.
identification and emphasis on higher volume/margin items and improved pricing strategies to increase return on investment (ROI). are highly ineffective. manufacturing. The ECR strategy focuses particularly on four major opportunities to improve efficiency. Category Definition Category Role Category Review Category Assessment Category Scorecard Category Strategies Category Tactics Plan Implementation Market Coverage Deletion Validation Retention Validation Addition Validation Assortment Finalization Pricing Quantification Shelving Promotion Efficient Consumer Response (ECR) – A strategy in which the grocery retailer. distributor and supplier trading partners work closely together to eliminate excess costs from the grocery supply chain. retailers and suppliers can eliminate the cost of non-required sizes. efficient assortment helps retailers increase store volume and gross margins. such as couponing. quicker adjustments of products in response to changes in customer purchases. electronic store receiving. Efficient Promotion. Efficient Replenishment. Efficient Assortment. Efficient Replenishment – Efficient replenishment focuses on the integration of the flow of information and product from supplier to store shelf. Some of the practices that make up efficient replenishment are accurate scan data needed to drive information systems. and the move toward one count processing and scan validation will ultimately drive costs down. At the same time. electronic accounts payable systems and dynamic computer-assisted ordering. costs for inventory handling. within a category. By optimizing shelf space with true assortment that meets consumer needs. Efficient Assortment Business Process – A core component of the Efficient Assortment Model. Efficient Promotion – By shifting away from a buying strategy to a consumer-oriented selling strategy. 5 . Consumer promotions. that achieves target consumer fulfillment and enhanced business results. more effective promotions at the retail level are expected to generate growth in volume and improve competitive position. storage and uneven manufacturing runs will be reduced. Electronic Data Interchange communications. A highly disciplined 6-step process by which distributors and suppliers working in collaboration determine the percent of market coverage and product mix required to optimize category performance given its specific role in the distributor’s portfolio.Efficient Assortment – A collaborative Supplier-Retailer process of determining the optimal product offering. In so doing. products with little differentiation and those with low turns. Efficient Product Introduction – Efficient product introduction centers on reducing system costs by finding new and better ways to identify and introduce new products that are more directly related to consumer needs. and Efficient Product Introduction. distribution. The key drivers of this initiative are category and space allocation targeted by store.
Calculated by dividing Annual Gross Profit $ by Inventory $ at Cost. Age. etc. if 40 Households out of 100 surveyed fulfilled 100% of their annual category needs with Brand A. zip-codes) so that high potential consumers can be found on the ground. impulse. which communicates a sense of urgency or opportunity to the consumer (e. type. which aggregates households by cross-tabbing the principal drivers of consumer goods (Income. Urbanicity. bill-back. Absence or Presence of Children).S. The discontinuation of these products could result in the target consumer leaving the store. This measure can be determined at all levels of data analysis (brand. Standards have been developed for all regular business-to-business communication. That is: Gross Margin = Retail Price – Cost Retail Price Gross Margin Return on Inventory (GMROI) – Used to quantify assortment decisions made for the category. mailing and other costs associated with paper-based information. stores. etc. The information is usually organized in standard file formats or transaction sets following guidelines administered by the Uniform Code Council (UCC) for the grocery industry or the Voluntary Inter-Industry Communications Standards Group (VICS) for the general merchandise industry. Census data can also be cross-tabbed in this way. Exclusivity Index – A measure representing the percent of consumers purchasing a particular brand (size. lifestyle oriented. including purchase orders.) that fulfill 100% of their category needs exclusively with that brand. Everyday Low Price (EDLP) – A permanent competitive pricing strategy where retail prices continually reflect all off-invoice.g. size. Brand A would have an exclusivity of 40%. channels. flavor. time delays and errors. EDI reduces costs. It 6 . Exclusivity. As example. Exclusivity is converted into an index by taking the exclusivity associated with the particular brand and dividing it by the average exclusivity measure for all brands in the category. in restaurants.Electronic Data Interchange (EDI) – The computer-to-computer transmission of business information between trading partners. shipping notices and funds transfer. seasonal). geodemographics can directly link product consumption to geographies (states. DMAs. in stores and through media. Geodemographics – Consumer segmentation. Gross Margin – The difference between an item’s retail price and its cost expressed as a percentage of the selling price. (40HH/100HH = 40%).). and other promotional funds eliminating short term “hot sale prices”. This measure enables the distributor to discriminate in favor of those items where targeted consumers have shown an unwillingness to use other products within the category. Represented as Current and New (estimated) Gross Margin Return on Investment. Because U. invoices. GMROI = Turns are calculated as follows: Annual $ Sales at Costs Average Inventory $ at Cost Gross Margin 100 – Gross Margin X Turns Gross Margin Return on Inventory (GMROI) Quadrant – A quadrant analysis showing the relationship between the gross margin and the annual turns among categories or subcategories. By eliminating the clerical. SKU. Excitement Creation – A category strategy. flavor.
7 . Loyalty and the loyalty index can be measured at all levels of data analysis (brand. it means that on average he purchases and sells a product 22 times a year. service. including: Annual purchases. Light User – A category user whose product consumption is significantly lower versus the category (e.). local market. Market Basket Analysis – Understanding the value of total market basket relating to a category. Heavy User – A category user whose product consumption is significantly higher versus the category (e. a region. Captured sales conditions may include: pricing.g. which communicates the distributor’s desired image to the consumer in one or more of the following areas: price. or SKU. SKU.g. Rural Towns and Farms. and level of education with geographic data such as family dwelling status and location (e. brand.. if a consumer makes 10 purchases annually in a given category.helps identify which actions are most appropriate to increase the overall return on assets in a category. and variety. quality.. etc. etc. etc. flavor. typical purchase size ($ or units)... Loyalty is converted into an index by comparing (dividing) the loyalty of Brand A by the average loyalty of all brands within the category. Lifestage– A form of consumer segmentation. The most common way to compute Turns is: Sales Inventory Turns = Average Inventory If a retailer turns his inventory 22 times a year. feature. indexed at 120 or higher versus the category average). which are projected to represent a targeted area (e. Heavy User Purchasing Behavior – Describes purchasing behavior among heavy users based upon number of criteria. This measure enables the distributor to discriminate in favor of those items where targeted consumers have shown a higher loyalty to purchase versus other products within the category. It represents the speed with which inventory is sold.. Loyalty. This measure is effective when compared to average market basket.). a case) of an item. Inventory Turns—The number of times a retailer sells out of his complete inventory in a given period of time. indexed at 80 or lower versus the category average). As example. which combines demographic data such as occupation. The discontinuation of these products could result in the target consumer leaving the store. Loyalty is often referred to as “share of requirements”.g. Lifestyle – A form of consumer segmentation. Metro Elite. Loyalty Index – That share of annual category requirements that the consumer is able to satisfy with a single brand (size. which combines age and presence of children in a particular household (e. TPR. type.). Mid-Upscale Suburbs). Image Enhancing – A category strategy. both at retail or cost or units). All purchases are captured at the point of sale. Household Panel Data – Product purchase behavior data collected from a "panel" of households. 3 of which are made of Brand A. or in-home via hand-held scanners. Gross Profit – The dollar difference between the sales of a product and its cost. Sales and inventory must be in the same units (e. segment. subcategory. It usually refers to the profit generated from the sales of a number of units (e. percent deal volume. household income. trade channel. display. or total U.g. flavor.g. size. Brand A would have a 30% loyalty.g. etc. (3/10 = 30%).S.g. 18-34 households w/ no children).
Additionally. scorecard. On-Sale/Off-Sale Mix – A means of showing the promotional mix within a category or subcategory. price reduction. Market share is also captured in terms of a distributor’s all commodity volume (ACV) which represents the average weighted market share for all categories within the distributor’s operation. feature.g. without merchandising support). The role designation for categories which will be managed to reinforce the image of the distributor as a store of choice by providing timely.e. the distributor identifies those items in the market that represent a determined percentage of each segments sales within the category. it minimizes payment discrepancies and the time required to correct them.Market Coverage – That percent of market demand that a Distributor chooses to meet with a category’s assortment. Market $/$MM ACV Index – An items $ Sales for each million dollars of all commodity volume (ACV) in a given market place. when not purchasing a competitive product within the same category. Such categories do a majority of their volume in a shorter time period(s) during the year. less than half) of all grocery dollar sales at a given retailer. opportunity gaps are represented by the linear distance between the current performance of the category versus the desired state (role). automates post-delivery accounts payable and receivable. costs. Opportunity Gap – Using quadrant analysis during category assessment. display). It provides additional benefits when used with DEX. These distances can be quantified to determine the location of the largest business opportunities to be addressed in the further development of the category strategies and tactics. and delivery authorization. This figure is converted into an average by taking the items factor. promotions. Market Share – That percent of $ sales in a given category controlled by a distributor in a specific geography. This percentage (market coverage) is set at levels that enable the Distributor to achieve the specific strategies. Using a market level item ranking report. Out of Stock – A product is considered "out of stock" whenever it is not available for purchase. while DEX provides direct linkage between trading partners at the store’s back door without the need for other (or public) networks. Occasional Shopper – A shopper responsible for the minority (e. dividing it by the average for the segment. the off-sale component is the percentage of business sold at normal cost and retail (i. and role performance that have been established for the category. Most Preferred Substitute – A data point collected via household panel which provides insight on those products within a category that consumers will most likely switch to. Mark-Up – The penny difference between the selling price and the cost of a single unit. 8 ..e. Network Exchange (NEX/UCS) – UCS provides two communications links between store and supplier: DEX and NEX. Occasional (Category Role) – Also known as Occasional/Seasonal. The on-sale component is the percentage of the total business supported by merchandising activity (i. NEX/UCS is used by both the grocery and mass merchandise industries. This data allows distributors to better predict where consumer purchases will shift when delisting items that have been identified as having low consumer loyalty within their product mix. maintains data files on products. NEX supports communications between office-based computer systems over public communications networks. competitive value to the target consumer.
e.) in the segment. the item would have 75% ACV Availability. Example: Category A represents $100 sales.Payment Terms – The payment terms offered by a supplier to a retailer. Percent (%) of Segment $ Share (Sales) – An item’s share of a category segment’s $ Sales. Profit and Loss Statement – Also known as Income Statement. One of the segments within Category A represents $20 sales. “Extended terms” are often offered on new or seasonal items. high gross margin. Percent of ACV Selling – The percent of All Commodity Volume (ACV) that sold at least 1 unit of an item during a specific time period. type. If an item can be found in stores within a market that are responsible for 75% of ACV $ sales. A major financial statement of any company summarizing the sales. Profit Productivity Index – The segment’s Share of Category Net $ Profit divided by the segment’s share of category items (SKU’s).5% $ sales.e. prior fiscal year). expenses and net profit results for the company during a specific time period (e. turns.. Planogram – The design of shelf schematics allocating specific space and facings on a per item basis. This measure is used in determining proper market coverage levels in Efficient Assortment analysis. and in some cases.g. from one manufacturer to another. Profit Generation – A category strategy. Example: The top ranked item in a segment controls 5% dollar sales. Percent of Transactions per Shopping Occasion – see "Conversion" Percent Sold on Deal – The percent of product purchases on which a consumer perceived that a deal was present (e. Switching Index – The cumulative percent of the brand's users who buy other brands (size. etc. This measure enables the distributor to discriminate in favor of those items where targeted consumers have shown an unwillingness to switch to other products within the category. and GMROI.g. the retailer received a 2% discount for payment on or before the tenth day. but the full amount is payable within 30 days). features.5%. The 2nd ranked item controls 4. gross profits and margins. the percent of households who purchased a product group at least once within a given time period (usually annual). 9 . Preferred Role – See Routine. Payment terms will vary from category to category. Percent (%) of Market ACV Availability – The availability of an item in the market measured as a percent of All Commodity Volume. etc. An item in this segment that represented $5 sales would be responsible for 25% of the Segment $ Share. price/bonus packs). Penetration (% of HH's Purchasing) – For a specific market/region. flavor.) divided into the average cumulative percent of users buying other brands (size. high gross profit dollars). A preferred role can also be established as the “best in class of trade” for the retailer. type. Average payment terms within the industry are “2/10 net 30” (i. Percent of Category $ Sales – The percent of product $ Sales compared with total category and/or demographic segment sales. Percent (%) of Cumulative $ Share (Sales) of Segment – That percentage of segment $ sales controlled by an item and all other items of higher rank. Shelving software has enabled the input of such schematics to provide specific financial performance expectation around inventory $. displays. flavor. The % Cumulative $ Share of item 2 would be 9. Product Switching. which focuses on the ability of a category or its components to generate profits (i. coupons.
Purchase Frequency = TTL Purchase Occasions # of Buying Households Projected Annual $ Sales for Retailer – The projected dollar sales the item will generate for the Retailer over a one year period. ROI becomes Return on Net Worth. 10 . divided by retailer share YAG (year ago). ROI is measured as: ROI = Net Profit (After Tax) Investment If “investment” in this formula is Net Worth (Assets minus Liabilities). The routine role will likely be assigned to a majority of the categories in a Retailer’s operation. divided by the average GMROI or ROA per item for the Retailer’s segment. Repeat Buyer % – The percent of buyers who purchase the product group more than once in a given time period. Retailer Share Index – Retailer’s share of segment. if it is Total Assets. divided by the average dollar sales per item for the Retailer’s segment. Repeat Buyer = # of Repeat Buyers # of TTL Product Group Buyers Retailer Dollar ($) Sales/Sq. competitive value in meeting the consumer’s routine/stock-up needs. Return on Assets (ROA) – The ratio of a company’s net profit in relation to its net worth. Retailer Trend Index – Retailer’s share of segment during the latest 52 weeks. divided by the average profit per item for the Retailer’s segment. Retailer Profit Index – An item’s dollar profit.Projected Annual $ Sales/$MM ACV for Retailer – The projected annual dollar sales a new item will generate for a Retailer determined by multiplying the average $ Sales for each million dollars of all commodity volume (ACV) in the market place. derived by dividing the company’s after taxes net profit by its net worth. by the amount of million dollar ACV done by the Retailer. Return on Investment (ROI) – A general measure of how well a company’s invested assets are generating profits during a period of time. Purchase Cycle – The average number of days between purchases of a particular product group among households who purchased at least two times annually (repeat buyers). divided by the retailer share of total market (ACV). Retailer GMROI or ROA Index – An item’s Gross Margin Return on Investment (GMROI) or Return on Assets (ROA). In general. Routine Role – The category role designation for categories which will be managed to establish the distributor as the store of choice by providing consistent. Ft. Index – An item’s dollar sales per square foot of retail space. ROI becomes Return on Total Assets. Purchase Frequency – The average number of times each buyer purchases an item over a given time period.
feature + display. which are in limited distribution. sub-category. it relates sales (or shares) to each 1% of All Commodity Volume (ACV) to which that brand is exposed at retail. May also be expressed as unit sales per million or equivalent sales per million. without discriminating against those products. segment. improve category planning decision-making. Sales Productivity Index – The segment’s share of category $ Sales divided by the segment’s share of category items. which occurred during store display only. units or equivalent units) = $ Sales/$MM ACV All Commodity Volume (Millions) Sales Per Million ACV is useful in that any market can be related to the national average or compared to other markets. divided by the share of ACV $ Sales controlled by that same targeted consumer group.Sales Per Million ACV ($ Sales/$MM ACV) – The sales of a product for every $1MM of ACV to which a product is exposed at retail. Sales Percent with Any Promotion -. Segment $ Sales Index – A segment’s share of $ Sales that are controlled by a targeted consumer group. Useful in comparing retailer and key competitor consumer purchase timing. Sales Percent from Display – The percent of product sales ($ or units). Sales Percent from Shelf at Regular Price – The percent of product sales ($ or units). display. or "seasonality" trends within the retailer target market. or TPR). Scorecard – A measurement tool used to monitor the progress of the category business plan. feature + display. Sales Percent from Feature & Display – The percent of product sales ($ or units). which occurred during store feature and display. but perform well where offered. Sales Percent from Price Reduction (TPR) – The percent of product sales ($ or units). which occurred during store feature only.The percent of product sales ($ or units) sold on any store level promotional condition (feature. 11 . As an alternative measure to Sales Per Million ACV. Sales Percent from Feature – The percent of product sales ($ or units). Sales Volume (or Share) = Sales (Share) Per Percentage Point of ACV Selling Sales Per Point of ACV Selling is useful in offering rationale for additional retail placement. TPR). which occurred without any store level promotional support (feature. This measure enables the Retailer to discriminate in favor of segments having the greatest appeal/importance to their target consumer. and as a basis for reward and recognition Seasonality Index – The ratio of $ Sales to average weekly $ Sales within a category. Available through data suppliers. and plotted over time for a specific retailer or market area. Segment $ Rank – Numerical dollar sales ranking of item within segment. the formula is: $ Sales ($. which occurred during any form of price reduction. and for estimating potential sales from a new retail placement. display. brand or SKU. Sales Per Point of ACV – A measure used to equalize a brand’s sales (or share) position by assuming that all brands have equal retail availability.
3% of the items ordered by retailers are scratched or back ordered because of out-of-stocks. etc. a 97% service level was achieved. Service Level – Another measure of the ability of a retailer buyer/merchandiser to meet store orders from warehouse stock or a supplier to meet the level of demand for its products in a store. impulse purchases).). size. Turf Protection – A category strategy. This is different than an out-of-stock rate which measures the percentage of items (not cases) that were not shipped. This measure enables the distributor to discriminate in favor of those items where targeted consumers have shown an unwillingness to switch to other products within the category. which focuses on drawing consumer traffic into store. 2 of 10 households (20%) make +$40K. aisle. Share of Requirements (SOR) – Expressed as a percentage. flavor. high % of sales). larger sizes. and/or category (i. etc. divided by the percentage of shoppers that the same demographic represents of all shoppers in the market place. type. Traffic Generation or Traffic Building – A category strategy. (30/20). size. Transaction Building – A category strategy that focuses on increasing the size or the average transaction for a category (i. Service Level = Cases Shipped (or Delivered) Cases Ordered (or Required) For example. Switching Index – The cumulative percent of the brand’s users who buy other brands (size. Example: 3 of 10 households (30%) using Olive Oil make +$40K annually. The Segment shopper index would equal 150.e. The use of this measure enables the Retailer to discriminate in favor of segments having the greatest appeal/importance to their target consumer.Segment Shopper Index – The percentage of a segment’s shoppers represented by a targeted consumer households (demographic).) divided into the average cumulative percent of users buying other brands (size. highly price sensitive. flavor. Share (%) of Category $ Sales – The segment $ Sales as a percent of the total Category $ Sales. etc. etc. SOR is useful as a measure with which to assess consumer loyalty. e. “Net” profit is preferred to gross profit. but may not be available. Share (%) of Category $ Profit – The segment profit as a percent of the category profit. The discontinuation of these products could result in the target consumer leaving the store. items or segments having characteristics such as.g. type. Units per Transaction – Physical units purchased during a single shopping transaction. higher than average ring. which focuses on aggressively positioning the category (relative to competition) to appeal to the target consumer. the share of a consumer’s total annual purchases of the category that can be attributed to a specific brand. flavor.) in the segment. flavor. In the market place. frequently purchased. high share. when a warehouse has a 97% service level. if a store ordered 1000 cases and 970 were shipped. Share (%) of Category SKUs – Segment SKUs (items) as a percent of the total category items. Units/Transaction = Annual # of units purchased Annual # of transactions 12 . Reached by dividing Actual $ Spent (shopping trips per year * $ spent per trip) by Annual Household Requirements (for the brand.e.
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