CGT Inside News - 07/12/2006

7/12/2006

Inside News

Hotline

P&G Thwarts Prilosec Private Label Threats

July 12, 2006 - A court-ordered stay prevents private-label manufacturer Perrigo from rolling out a store brand version of Prilosec OTC, allowing Procter & Gamble two more years to exclusively market its antacid beyond the period initially set by the Food and Drug Administration, reported Advertising Age earlier this week. Initially, store-brand versions of Prilosec OTC were expected to reach drug store shelves in June 2006 -- marking the expiration of Procter & Gamble's three-year exclusivity of the over-the-counter, proton-pump inhibitor. However, Prilosec manufacturer AstraZeneca filed a patent-infringement suit in late May 2006 in U.S. District Court in Delaware and Eastern Virginia against Perrigo's partner, Dexcel Pharma Technologies, an Israeli company that developed a generic version of Prilosec OTC. In June, the court issued a 30-month stay preventing Dexcel or Perrigo from marketing a private-label Prilosec OTC. The companies can market the drug at the risk of having to pay for patent infringement after that, however, a representative of Perrigo says that the company does not expect to shipp a private-label version of the drug sooner than 2008. Unless the court finds in favor of Dexcel prior to 2008, P&G will continue to enjoy exclusive rights to Prilosec OTC, which is the only major OTC antacid brand not to face private-label competition.

TechTactics

Reckitt Benckiser Enhances Product Development

Reckitt Benckiser, a household cleaning products manufacturer, implements Sopheon's Accolade process and portfolio management system to provide an enterprise-wide platform for new product development. The company began using the solution a little more than a year ago in an initial deployment that spans 40 countries and involves approximately 600 users in marketing, research and development, manufacturing, finance and executive management. Deployment of the software is an element of a larger strategy aimed at supporting the creation of new-to-the-world consumer products and minimizing the time required to bring those products to market. New product launches within the past 36 months account for almost 40 percent of Reckitt Benckiser's total net revenues. The collaborative, Web-based environment produced by the Accolade system allows crossfunctional teams that drive the company's innovation processes to work more efficiently and reduce the amount of time spent on administrative tasks.

Spring Air Bolsters Manufacturing and Distribution Operations.

The Spring Air Co., the world's fourth largest bedding manufacturer, chooses Microsoft Dynamics AX from Microsoft Corp. as the technology to power its new manufacturing, distribution and financial IT solution. Spring Air required a solution that could help streamline communications and key line-of-business processes in its main corporate office, its 18 U.S. licensee manufacturing locations, and the dozens of furniture and department stores that carry its products. The office of Crowe Chizek and Company LLC, a Microsoft Gold partner and member of Microsoft Business Solutions President's Club, provided a tailored road map for Spring Air's new IT solution, based on the mattress-maker's highly specific manufacturing style. The configuration flexibility of Microsoft Dynamics AX allowed Crowe to develop a solution exceeding the functionality and return on investment of other products also under evaluation by Spring Air that were developed specifically for the mattress industry.

Kerry Americas Deploys Custom On-Demand Solution

Kerry Americas, a food ingredient and flavor producer, deploys Salesforce SFA and Service & Support from Salesforce.com. In addition, Kerry Americas used Salesforce.com's AppExchange to successfully create and deploy an on-demand application for product development. A home-grown, proprietary application, coined CRISPI, was providing valuable project management functionality for Kerry Americas, but the company realized the system would require substantial development resources to support ongoing improvements and drive greater synergy between sales and product development. Kerry used the salesforce.com AppExchange and AJAX toolkit to replicate the CRISPI system as an on-demand application and easily integrated it with Salesforce SFA and Salesforce Service & Support. "AppExchange allowed us to rebuild our CRISPI application in a matter of weeks with full integration to all of our enterprise applications. We've been able to significantly reduce our development time and focus on business processes rather than the nuts and bolts of the technology," says Dan Callahan, Kerry Americas' IT director. "The Salesforce solution has provided on-demand access to business information, resulting in greater visibility into our product development activities and better collaboration across departments."

Pulse

Campbell Sheds British and Irish Assets

U.S.-based Campbell Soup Co. sells its British and Irish businesses for about $845 million to Premier Foods PLC. Premier Foods already owns brand names such as Ambrosia, Branston and Quorn, and the Campbell deal will add Homepride sauces, OXO dry stocks and Batchelors dry soup and meals. The combination should produce cost savings and added revenue production of 28 million pounds ($51.7 million) within three years. The sale also includes three manufacturing plants in Britain and one in Ireland.

Miller Brewing Strengthens Stake in Caffeinated Beer Market

Miller Brewing Co. moves into the caffeinated alcoholic beverage market with the purchase of two brands from McKenzie River Corp. for $215 million cash. SABMiller PLC -- Miller Brewing's parent company -- will add Sparks and Steel Reserve brands from the San Francisco-based beverage marketing firm to its brand portfolio. Milwaukee-based Miller has been brewing both of those brands, which comprise the majority of McKenzie River, for years. "We anticipate that category to grow for many years," says Miller spokesman Pete Marino. "We feel very positive about this deal because it gives us two strong, growing brands." Miller launched its own caffeinated beverage, Mickey's Stinger, in California, Nevada and Arizona in late May. Marino says he's heard the introduction has done well but it's still too early to tell whether the beverage will be sold beyond those markets.

Retail Scene

Friedman's Jewelers Implements Private Label Card Program

Friedman's Jewelers, with 422 locations, signs a five-year agreement with Alliance Data for private label credit card services. The private label credit card program includes account acquisition and activation, receivables funding, card authorization, private label credit card issuance, statement generation, remittance processing, customer service functions and marketing services. With the integrated credit and marketing services, Friedman's will be able to reach additional consumers by providing promotional programs.

CSK Auto Drives Business Performance

CSK Auto, a specialty retailer in the automotive aftermarket operating more than 1,280 retail stores, expands its use of MicroStrategy's business intelligence technology to better assess corporate performance. Corporate management, business analysts and field personnel will use MicroStrategy for analyzing consumer purchasing trends, reporting loss prevention statistics, monitoring vendor performance and compliance, and conducting detailed analyses of the sales, replenishment and purchasing functions.

Guitar Center Streamlines Global Sourcing

Guitar Center implements the TradeStone Suite to unify its global sourcing. Phase one of the implementation of the suite, which includes TradeStone's Unified Buying Engine and modules for product development, sourcing, and logistics, took 90 days to complete. The suite will allow the Guitar Center to create Requests for Quote (RFQs), and put those quotes out for bid to manufacturers worldwide. By normalizing currencies, languages, lead times and automatically calculating the estimated landed costs for goods, the suite enables Guitar Center to compare offers from different manufacturers in different locations.

New Technology

JDA Software Completes Manugistics Acquisition

JDA Software Group Inc. purchases all of the outstanding equity of Manugistics Group, Inc. for approximately $213 million in cash, or $2.50 per share. By finalizing the acquisition, JDA significantly grows its size with the addition of Manugistics 800 customers. "If JDA can successfully translate its experience in acquisitions, their presence in the retail sector combined with Manugistics supplier optimization capabilities means we'll have a single company focusing their resources and energy on developing integrated solutions with a real end-to-end perspective," says Bill Nienburg, vice president of sales and operations planning, at Sara Lee - an existing Manugistics client.

Sun Microsystems Introduces New Server
Sun Microsystems launches the Sun Fire X4600 server, a four-way server that can scale 16 ways in a single 4U chassis. With the server, retailers are able to consolidate up to 76 x86 Xeon servers onto a single Sun Fire X4600 server. In addition, in order to decrease the complexity of managing large numbers of servers in a datacenter, the entire Sun x64 line features an Integrated Lights Out Manager (ILOM) Service Processor that handles the management, monitoring and control functions of the servers.

Management on the Move

Tyson's Chief Marketing Officer Resigns

Chief Marketing Officer Bob Corscadden of Tyson Foods Inc. is resigning after 14 years of service. His duties will be assumed by Tyson's Vice President of Marketing Services Sue Quillin, a long-time member of Tyson's marketing staff, who has most recently been overseeing the company's branding/advertising and market research teams. Corscadden was senior vice president and chief marketing officer of Tyson Foods since 2001, overseeing the company's advertising and consumer marketing efforts, as well as internal communications. He started with Tyson as a product manager in 1992 and steadily moved his way up the ranks of the company's marketing staff.

Liz Claiborne Names Group President, Direct-to-Consumer

Liz Claiborne Inc. has a new group president heading up its direct-to-consumer business, which includes e-commerce. The company names Jill Granoff as group president, direct-to-consumer. She will be responsible for Liz Claiborne's specialty retail and outlet stores as well as its U.S. e-commerce sites. Before joining Liz Claiborne, Granoff was president and chief operating officer of Victoria`s Secret Beauty, a division of Limited Brands. Prior to that, she was senior vice president, strategic planning, finance and information systems for Estee Lauder Inc.

Vantage Point

Taking Retail Execution to the Next Level

By Harris Fogel, President, O4 Corporation

In today's complex retail environment, bottom-line growth depends on more than product innovation, sophisticated supply chains and analytical marketing.

It also requires excellence on the front lines - in the stores where, after many months of planning, the critical difference between success and failure can often come down to retail execution.

Take a long, hard look at your company's retail execution strategy and ask yourself the following questions:

Does it support an environment where the right products reach the right place at the right time?

Does it ensure that your well-crafted promotions and objectives are realized?

Does it increase shelf space and brand awareness?

Or, is much of the company's effort ending up in the clutter of a retailer's stock room?

Closing the Loop

The aforementioned questions can beg another: Is it possible to connect head office planning with retail-execution - to know exactly what's happening in the field?

Let's consider what that might look like.

Imagine a world where the field sales organization uses the marketing plan to simulate, enhance and optimize trade plans to be used by account teams.

Individual account plans are created and agreed to, and the appropriate field-related activities including promotions, tasks, objectives and surveys are ready for deployment to the field.

The next time the representative synchronizes, instructions are automatically transmitted to their handheld computer.

They also receive relevant sales and competitive data, graphical images of in-store promotions, multimedia files of associated TV ads, up to date planograms, and store-specific details of the company's relationship with that individual customer.

In the retail outlet, field workers can leverage the information and functionality available to them on their handheld device to influence the retailer's buying decisions. All activities including distribution checks, promotional compliance, surveys, audits and competitor activity are processed and captured at the point of activity. The data feeds back into the field operations, account planning and marketing systems for analysis and in time for review.

This process of checking and updating happens in real time.

Achieving Maximum ROI

In a perfect retail execution world, this cycle continuously repeats itself. Workflow becomes fluid and integrated, leading to maximum effectiveness and efficiency throughout the entire process and, ultimately, maximum ROI.

Forecasts are improved and trade funds optimized because planning and feedback from the field is better. Perhaps most important, positive in-store results reach record levels because field activities are executed correctly, at the right time.

Think this is a dream? Think again. The tools to make ideal retail execution a reality are available today.

According to a March 2006 Gartner Research note titled Next-Generation Retail Execution and Monitoring Solutions for Consumer Goods, "Retail execution and monitoring solutions used by consumer goods (CG) manufacturers or their agents have evolved from data capture and activity tasking, to solutions, to analytical and role-based selling tools with more power to influence outcomes in the retail environment. These next generation retail solutions can give managers responsible for sales and sales operations a competitive advantage based on their requirements and business processes." Additionally, McKinsey & Company notes in their 2005 Customer and Channel Management Survey, "In-store execution winners achieve a higher display penetration and share growth."

From Planning to Reality

A major factor that determines the success of any consumer goods company is how well the carefully created plans are actually executed at retail.

By optimizing execution, companies can ensure that the effort they put into brand planning, trade promotion and account management is worthwhile and is implemented to achieve optimum results.

By making improvements to business processes in the field and the way that field operations are managed from the office, a business is able to gain a competitive market advantage and strengthen its bottom line.

Field Operations Solutions help companies achieve their strategic goals by empowering field management to increase the efficiency of their field force and the effectiveness of their organization's field execution.

In today's consumer goods world where driving bottom-line growth is king, make sure your retail execution strategy can carry products and company plans to market in a timely, cohesive and cost-efficient manner.

Re-visiting your company's field operations is a critical first step in turning retail execution dreams into reality.