Business Review This template is used to assist in the development of the company’s yearly business review.
Content Overview n Mission Statement and Support n Objectives n Business Performance - Financial Review n Summary n Performance by Major Category Examples - • Sales by Category • Historical Performance • Seasonality • Category • Channel • Performance Trend • Distribution • Category Profile • Mix by Channel • Profitability Analysis • Brand Mix • Price Ladder • Product Ranking
Content Overview n Customer Overviews n Product Category Overviews n Competitor Overviews n Consumer Learnings n Key Issues and Market Trends n SWOT Analysis n Consumer Promotion Review n Enablement? n Cross-BU Integration?
Mission Statement: State your company’s mission statement here. Support: Add any additional supporting information about your company. Example: What is your company doing differently than the competitors?
Objectives What are the company’s objectives and how will be objectives be accomplished? Examples: • Improve sales with more direct marketing plans. • Generate $25 million in sales between January and June • Increase Market Share • Build a Better Product than the Competition • Maximize Customer Satisfaction • Help Other Corporate Businesses • Reduce Number of Employees • Cut Expenses • Maximize Revenue • Maximize Annual Profit • Maximize Return on Investment (ROI) • Maximize Return on Equity (ROE) • Maximize Return on Assets (ROA) • Maximize Return on Sales (ROS) • Maximize Shareholder Value & Discounted Cash Flow • Expand into New Markets • Minimize Risks • Provide for the Employees • Help Community
Business Performance Financial Review
Business Performance -Sales Summary Projected Year Year TY 1 2 3 4 D FY FCST Sale s Gro wth Year Reason for Loss or Profit (Example: 1 Lost major account) Year 2 Year 3 Year 4
Business Performance Sales by Category Insert a graph of the major categories of your company’s product line or service. Describe what is the major categories that are dominating.
Business Performance Historical Performance by Category Previous Year No. of SKU's Current Year TYD Sales % Total No. of SKU's Category 1 Category 5 100% Total Category 4 Category 5 Category 3 Category 4 Category 2 Category 3 % Total Category 1 Category 2 TYD Sales Total 100% n Explain what categories are growing, declining or staying constant.
Business Performance by Major Category Insert percentage bar graph to illustrate growing or declining trend within the family of products or services.
Business Performance Category Profile Don’t know what to do here…. Bubble Size reflects size of business in sales dollars
Business Performance Profitability Analysis YTD Profitability By Category Sales Growth Units Cost GM$ GM% GM$ Category 1 Category 2 Category 3 Category 4 Category 5 Total 100% Describe what categories are dominating in the profitability analysis.
Business Performance Price Ladder and Profitability Analysis UPC Product Benchmark Margin Benchmark Price Ladder
Business Performance Seasonality Insert seasonality graph to illustrate the seasonal sales changes in category.
Business Performance Seasonality by Channel Insert graph to illustrate seasonal performance by Distribution Channel. Example: Mass Market, Superstore Retail, Online, Boutiques, Commercial, International, Distributors.
Business Performance Distribution Insert any observation you might see in regards to the company’s distribution. Example: What are the major channels that might be areas to concentrate more focus in.
Business Performance Distribution Observations: What observations are present in each area of distribution? Example: • Mass Market is more willing to purchase lower price items. • Commercial Market purchases all spread out through all price ranges.
Business Performance Brand Mix Observations: This area can be used to present the brand mix of your company’s product or service.
Business Performance Product Ranking by Sales $ YTD Product/Servic e Description Sales Rank Sales Growth Unit Rank Margin Rank Observations: This area observes the top ranking products/services for the company.
Business Performance Customer Overview by Distribution Pervious Year Sales Growth Total Customer $ Your Company's total contribution to the Customer Product/Service contribution to the Customer Year 1 Year 2 Current Year Store Retailer 1 Store Retailer 2 Store Retailer 3 Observation: Indicate the reasons for sales growth or decline with the customers. Example: • Customers closed several stores. • Customer downsized areas of their company.
Business Performance Direct Print Fact Sheet What to do here? Product Ranking - June YTD 2002 Observations: DP continues a broad decline, across customers and products, with the exception of bulk packs
Business Performance Direct Print What to do here? Direct Print Sales Trend • Sales decline resulted from loss of superstore distribution. • 2002 SS Returns: • Office. Max - SKU 11576 and 11577 (Ink Jet). • Staples - SKU 11576 • Only SS distribution remaining is at Office Depot (11536 & 11537 5 T LSR and IJ. )
Business Performance Direct Print What to do here? Direct Print Commercial Sales • Commercial channel contributes to 95% of the DP business and is growing (YTD +2. 2% versus YAG). • Growth is fueled by the performance of the 24 set laser (+13% vs. YAG). Loyal users are trading up to 24 -set packs.
Business Performance Direct Print What to do here? Direct Print Sales by Printer Type • Laser is still bulk of the business. DP ink jet dividers experienced higher total sales decline due to loss of distribution at superstores. • Color is growing in the commercial channel (small $ base) *Direct Print Collating = $133, 831 (6% of total)
Business Performance Direct Print Margin Ladder Directwill continue to improve with elimination of Print • Overall margin Gross Margin $ DP single sets at the end of 2004. Single set only yields a 47% GM. 78% GM 80% 85% 80% 81% 77% 82% 79% Source: Brio Data
Business Performance Direct Print Unpunched Sales • After strong growth in 2000, DP unpunched has been down significantly in 2002 • Possibly cannibalized by IM or other alternatives
Business Performance Index Maker Fact Sheet Index Maker Product Ranking - June YTD 2002
Business Performance Index Maker Sales Index Makerby Major Family - July YTD 2002 Observations: • Index Maker continues to grow in all Major Families, except Copier, which is down 16% • While the highest growth rates are coming from 2 nd Tier and Transluscents, their size and overall contribution remains small • Index Maker sales and volume growth remain dominated by Avery Branded paper IM with white and color tabs
Business Performance Index Maker Punched/Unpunched Analysis (Laser Only) Index Maker WOW! Observations: • It is surprising to note that punched sales have declined vs prior July YTD • With unpunched only available in white laser Index Maker, there is opportunity to expand our offering of unpunched in other areas (i. e. Color IM) • We will need to continue monitoring punched sales to determine if the minor family is mature/flat
Business Performance Ready Index Fact Sheet Ready Index Product Ranking - June YTD 2002 Observation: Ready Index, in contrast to IM, sales are dominated by single set packs
Business Performance Channel & Customer Sales Detail Ready Index Superstores decline in 2001 is slowing down this year, which could be a result of improving inventory control. n Commercial is flat after last year’s customer consolidation and inventory reductions. n Mass was up in 2001 with the RI/IM Presentation Center at Wal-Mart, but we are currently encountering returns for that project. Mass sales are declining this year as the price competition continues across manufacturers. n
Business Performance Ready Index - SKUs with. Our best selling SKUs are also our “no growth” Declining Sales products! n n Most of these “no growth” items are single sets of RI Cont Std. n Landscape Ready Index single and 6 -packs topped the list. These items should be discontinued for 2004. n Easy Edit is doing poorly in single set packs. n SKU rationalization decisions to discontinue Executive Hidden Tab and Contemporary Hidden Tab are validated by the rankings of these
Business Performance Ready Index - SKUs with Best Growth
Business Performance Ready Index - SKUs with Best Growt (Cont’d) n While Easy Edit single sets are among the under performing SKUs, 6 -set packs of Easy Edit are among the highest growth products. n 6 -sets packs of RI Contemporary Standard are performing well. n Private label TOC products for Corporate Express and Office Depot are performing well.
Business Performance Ready Index n Single set packs are losing ground to 6 -set packs. n Three-set packs were done for OD Exec. RI, which has been discontinued as of mid-2001 n 24 -set packs are flat since 2000 (24 sets are uncoallated)
Business Performance Write - On Fact Sheet Write-On/Plain Tab Product Ranking - June YTD 2002
Business Performance Insertables Fact Sheet Insertable Product Ranking - June YTD 2002
Business Performance Legal Dividers Fact Sheet Legal Product Ranking - June YTD 2002 Observation: Legal continues to be an area of operational challenges with low volumes for the majority of items while at the same time demonstrating marketing potential for expansion
Business Performance 1 B bound documents are created each year. Bound Documents The desktop binding supplies market is estimated at $150 MM annually (U. S. manufacturer sales). 60% of sales are through copy centers & printers. 40% of sales are through the traditional office supply channels for desktop binding applications. Growth in the category is flat at ~ 2 -3% per year. GBC dominates the category in both the Superstore and Commercial Channels. 85% of documents are bound with plastic comb. 5% of bound documents created at the desktop Source: Desktop Document Binding Market Study, Nauset, Junewith binders is 50%. use dividers. Attachment rate 2001
Business Performance Historical Sales Bound Documents. Summary Facts: • Stong overall growth trend. 2001 decline was consistent with Index Maker punched sales decline (-3. 9%). • Index Maker unpunched represents 87% of our Bound Document Supplies business. • Without Covers, 2002 YTD unpunched Divider sales +17%. Key Issue: Highly dependent on Index Maker unpunched sales. Implication: Need to build Cover business to strengthen position in the category.
Business Performance Background: Flags Tabs & n Tabs & Flags is approximately a $150 MM category (factory sales). n Market share is dominated by 3 M Post-it Flags with over $100 MM in annual sales. n Redi-Tag is #2 in the category with approximately $10 MM in annual sales. They provide the low cost alternative to 3 M. n Avery’s current range of Tabbing products generated sales of $6. 9 MM in ‘ 01 (-14% vs. ‘ 00). n “Tabs” are for frequent reference vs. “Flags” which are for temporary page marking.
Business Performance Key Observations: Tabs & Flags n Avery is loosing share to alternative products and competition. n Recent increase in competition from 3 M with their Post-it Durable Index Tabs (2 SKU’s). n Must differentiate our new products from 3 M’s products. n Significantly increased activity from Redi-Tab with new catalog listings and Superstore POG space. n Overall positive response from customers to our initiatives to reinvigorate our Tabbing line. n Small overall share position and reasonable profitability makes this an attractive adjacent
Business Performance Sales Summary (July YTD 2002) Tabs & Flags Facts: • Shield Tabs 51% of sales, Gray Cloth Tabs 26% of sales. • Printable Tabs 1 st new product since ‘ 94. Excluding Printable Tabs, sales -8% Key Issue: Core Shield Tabs undifferentiated from competition. Overall declining business. Losing share to alternative products and competition. Implication: Business will continue to decline without further action.
Business Performance Profitability Analysis Tabs & Flags Analysis (July 2002 YTD) Facts: • Solid profitability for category. • Profitability has declined. 5% decline in 2001. • Low profitability lines should be addressed (Strip Tabs & WS Inserts). Key Issue: Declining sales volume is reducing profitability due to fixed overhead costs associated with business. Implication: Need to grow core line sales or reduce costs to increase or maintain profitability (share gain, merchandising).
Competitor Overviews
Competitive Market Share Product/S ervice Product/S ervice Distribution Channel 1 Distribution Channel 2 Distribution Channel 3 Distribution Channel 4 Total Observation: What reasons can be said as to why one channel is dominating over another. Examples: n What channels are continuing to be the weakest n Distribution Channel 1 continues to be the strongest because of lower prices n Distribution Channel 2 grew with extensive marketing campaign.
Retail Price Ladder for Company and Competitor product/service Observation: Insert graph to illustrate the price differences between your company’s products/services vs. competitors. How does your product/service compare to your competitors?
Competitive Distribution by Major Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5 Retailer 6 Your Company Competitor 1 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Observation: What does your company’s distribution by the major retails compare to your competitors?
General Competitive Overview n This section provides a brief description of the top competitors in the Index Dividers category. n What sources was your data compiled from? Example: n Hoovers - website that delivers comprehensive company, industry, and market intelligence that drives business growth n Company websites n Interviews internal staff n The key players in your product catagory: 1) Competitor 1 2) Competitor 2 3) Competitor 3 4) Competitor 4
Competitor Profiles n Background and history: n Financials: n Products: n Current Strategy: n Market Share: Detail all areas for each competitor.
CONSUMER LEARNINGS What is it that your consumers want? Ex: Professional, Easy, Quick.
Trend Report What can be said with the trend reports? Is there a reason as to why there is a incline/decline with your company’s product/service? Do you foresee the trend to continue to the next year/s? Source: Indicate which source was used.
How Consumers Shop What do they want? What will they purchase? Specific Purchase. Ex: • Be Healthier • Vitamins • Create a Proposal • Folders • Vitamin B 12 • 5 tabs folder How do they react to price? The Experience the customer will have. Ex: Value High Image consumers less likely to be price sensitive BUSINESS ISSUE: Pricing pressure from customers (PL) and competitors. GAP: Better understanding of value/pricing elasticity. Source: Purchase Behavior and Assessment of Trade Up Potential 03/01
Shopping Behavior 1) Project/Application Drives Product Chosen n n n Time Pressure: Admins may browse, SOHO’s tend not to* Time Pressure: Don’t want to learn new things Outside Request: boss asked for a specific look Inertia: No Pressure or interest to try new products - current divider products are good enough and limited motivation to invest time learning about new products Positive: Avery brand associated with high image and performance comfort using Avery Risk: PL brand is gaining in unaided awareness BUSINESS ISSUE: Enablement communication GAP: Quantified research re: enablement message/icon. Source: Purchase Behavior and Assessment of Trade Up 03/01 *Source: IM/RI Package Preference and Name ID; Brown Tracking Study 06/02
Shopping Behavior 2) Product Evaluation is Visual then Physical RETAIL Visual Picture of Product BUSINESS OPPORTUNITY: Improve shelf presence. Item number Product name Brand name Physical “Feel” of tabs or bending of package (WJ View Tab) CATALOG : Convenience and Efficiency Source: Purchase Behavior and Assessment of Visual Trade Up 03/01 Similar visual cues to retail Bold headlines Product picture Concise Description Index Product Positioning 10/97 Tab Divider Packaging Focus Group ‘ 97 IM/RI Package Preference Name ID 08/02 Catalog Impact Research 02/01
Shopping Behavior 3) Trade Up within Type Evaluation of products within type based on: n Professional image n Ease of Use n Quick Source: Purchase Behavior and Assessment of Trade Up 03/01
Target Consumer Segments Admin n Admin 30% of Admins account for 55% of usage and are responsible for 78% of desktop laser printed dividers (8/98 Market Potential) n Fraction of this population is considered HVC n Majority of the $ volume is shopped via catalogs (commercial channel) SOHO n 16% of population accounting for 2% of total $ volume (data may be outdated) n More likely to feel products are the same n More interested in trying new products n Majority of owner/partners are online and accessible for promotional activity n Primarily shop retail Focus Group ‘ 97; Segmentation Study 10/87; Source: Tab Dividing Packaging Tracking Study Avery n Look for 06/02 brand - synonymous with quality and professionalism *
Target Consumer Segments Students n n n Dividers overall is low involvement. Value reusability and durability. No perceived need for machining dividers. Machineable dividers perceived as durable hence the appeal. Junior high students have greater need for expression via doodling and drawing Mostly insertable users. GAP: Mass and College are the weakest Channels. Source: BTS 2000 and 2001 Focus Groups
![High Value Consumer [The following information is based on 5 year old study] HVC](https://present5.com/presentation/f9f5fcef307da3e96c3426e65168eb68/image-59.jpg "High Value Consumer [The following information is based on 5 year old study] HVC")
High Value Consumer [The following information is based on 5 year old study] HVC is approximately 15% of population that accounts for 84% of $ volume 66% female, 34% male n Are aware of both high end products and low end products n Value products that are professional, durable, easy to use, improve neatness, allow easy last minute changes n 30% are admins, 40% managerial, 15% professional GAP: (1) What is the preferred method of organizing? Why? (2) Understanding copy centers in-house, professional and Xerox Source: Combined Segmentation Study 10/97 GAP: Quantifying HVC and current value to update aging research.
Promotions n Trial is the best way to convert and trade-up consumers. n Larger volume sampling aides in overcoming gatekeeper hurdle. n Seminar programs offer HVC audience, demonstration and trial which helps overcome Gatekeeper hurdle. BUSINESS ISSUE: Need new ways to break through habit-based purchase behavior to create awareness/trial of new solutions. GAP: Quantified payback of consumer seminar programs and large volume sampling.
2002 Learning IM/RI Packaging Study (08/02) 50% value the RI/IM branding name prominently on package n Name acts as descriptor of product or one more cue for reordering n 60% of consumer prefer template reference prominently on front of package GAP: Consumer awareness of Avery templates/pre-designed n templates/icon. Is this one more cue for reordering? Consumer Seminar Program Payback Assessment n Learning TBD
2002 Learning (Cont’d) Tabs and Flags Study 08/01 n Consumers expect and want multiple options for accessing templates for tabs. n Consumers look for durability, flexibility and writeability n Flexibility defined as being able to reposition product securely without permanency n Colors should be light enough to not overpower text Bound Documents Systems and Supplies (07/01) n Reserved for low-cost, high volume applications n 36% high image applications, 64% low image applications* n 20 or less docs prepared in house by small and large companies n Large corporations rely on consumer seminars for new product info n Consumers looked for durability, ease of use, professional look consistent with divider consumers. n Not as price sensitive for external use.
2002 Learning (Cont’d) Missing Studies To Be Added Later Direct Print Consumer Seminar Analysis Organizing Research
Key Issues & Market Trends
Key Issues & Market Trends Growth: The growth rate for the Dividers market has slowed to 2 - 4% per year. n 2002 July YTD sales are up 5. 1% - primarily attributed to very weak sales in 2001. n Our market share stands at approximately 75% which limits our growth through share gain and puts more emphasis on usage expansion or channel expansion n Trading consumers up to higher price point Dividers (i. e. Index Maker) will increase our sales and the overall size of the Dividers category. n Adjacent categories of Tabbing and Bound Documents offer growth potential: n n Tabs & Flags: 5% share of $150 MM category Bound Docs: 5% share of $150 MM category
Key Issues & Market Trends Competition: Significant new competition from traditional competitors and from customers. n The Superstores are aggressively expanding their private label offering to boost their GM and increase their brand equity. Insertable Dividers have been impacted and requests for private label Write-On and Ready Index Dividers are expected. n Wilson Jones has experienced success with their View-Tab line at our share expense. In particular View-Tab may be impacting sales of our Ready Index line. WJ continues to expand the View-Tab line and promote it heavily.
Key Issues & Market Trends Competition (continued): n White label represents a potentially significant threat to Index Maker that needs to monitored very carefully. n Post-Fax has been aggressive with new valueadded product; however their success has been limited to Wal-Mart and Office Depot (PL TOC Divider) and their parent company (Centis) has filed for Chapter 11 bankruptcy protection. n GBC with annual sales of $600 MM controls over 70% of the Binding Systems and Supplies category and is a formidable competitor.
Key Issues & Market Trends Competition (continued): n 3 M Post-it Flags account for approximately 80% of the Tabs & Flags category. We will position our new Tabbing products as “Tabs” and not “Flags. ” Despite the fact that 3 M has introduced Post-it Durable Index Tabs, we plan to avoid any direct competition with 3 M in this category.
Key Issues & Market Trends Product Life-cycles n The trade is increasingly unwilling to support new products and requires new products to prove themselves over a shorter time frame. n Direct Print, launched as the “ next generation” PC Divider, is not delivering on growth expectations. n Ready Index, a traditional growth driver, is now late in its life cycle and declining in sales (July YTD -4%)
Key Issues & Market Trends Product Life-cycles (continued) n Insertable and Write-On Dividers are approaching “commodity” status and are under tremendous pricing and private label pressure. n Index Maker offers the most significant growth potential with July YTD sales +6. 8%. Easy Apply has the potential to be a significant growth driver by making it faster and easier for consumers to produce professional looking Dividers.
Key Space Issues & Market Trends n The lack of incremental shelf space in the Superstores or incremental page space in the Commercial channel further limits our growth opportunities. Trade-up is our best growth vehicle. n We are increasingly sharing space with private label. Enablement n Templates are the key enabler of PC Divider usage. The long lead-time associated with getting our new product templates into software like MS Word delays our impact with new products. n Getting our new templates onto our consumers
Key Issues & Market Trends Awareness/Involvement n Awareness of Avery PC Dividers continues to be low. Consistent consumer use of PC Dividers for high-image presentation applications represents an incremental revenue opportunity. n Speed, ease of use and professional look will continue to be our consumer message for PC Dividers.
SWOT Analysis
SWOT Analysis Strengths • Category Dominance • Distribution- have broadest distribution in category - need to defend and compete aggressively to avoid loss of share • Brand Name - while Avery is the best known brand in the category, it remains a low involvement category with low brand awareness over all - need to continue to strengthen relationship with consumer to reinforce Avery specific value • Breadth of Line - the Avery offering is broad and complex - look for opportunities to simplify, but be prepared to respond quickly to competitive threats or entries into category • Access to trade - established trade relations are generally positive and at least provide access, continue to build on relationships to increase value of Avery to buyers • IP on some products - leverage existing IP, extend where possible and continue to seek new IP to create and leverage sustainable competitive advantage • Enablement • Partnership with and placement in Microsoft - remain the only divider provider with templates in MS Word, need to partner with MS to be on board with emerging strategies (I. e. web enablement) • Relationships with other enablement providers • Experience/expertise w/ templates - we have more templates/solutions for our consumers - need to continue to build on to maintain position of strength in this area • Relationships w/ Admins/Consumer Knowledge - continue to research evolving consumer needs and values, use consumer marketing to build on relationship, especially with high value consumers - Need to be known as providing the fastest, easiest and most satisfying dividing products available • Operations (Supply chain, economies of scale, purchasing strength, sourcing in Mexico and Asia) - while we have some economies of scale and expertise, this remains an area for significant improvement
SWOT Analysis Weaknesses • Market Leader vulnerabilities • Competitors more willing/aggressive to do private label - articulate private label position • Limited flexibility based on Avery legacy - need to address that Avery positioning (high quality w/ high margins) does not always satisfy customer needs, leaving opening for competitors • Depend on high margins, restricts ability to respond to actions of low price competitors - need to develop a response to low end producers • Competitors are quick to knock off non-proprietary products and innovations - leverage strength of proprietary products (ie IM) by focusing marketing efforts on growing profitable products with sustainable differentiation. Begin to manage mix (high and low margin products) to defend market share • Tend to be focused on office, not other consumer groups - recognize that our consumer message does not speak to every consumer group. Investigate opportunities develop products or messages for different consumer groups or channels (e. g MM) • Knowledge about consumers use, preferences and needs for enablement limitedincrease and leverage understanding of consumer use of enablement to strengthen preference for Avery solutions and expand usage • No control over customer promotional executions - work with trade & sales to understand influence trade promotional behavior • Too slow in getting to market - broad and complex issues need to be addressed including: • Juarez & PFG purchasing deficient • Lack of experience w/ plastics • Long launch cycles • Dependency on outside production for quick launches • Low involvement category/low brand awareness - focus on influencing consumers when they are interested and involved (packaging, use/enablement, catalog lay-out)
SWOT Analysis Opportunities • Leverage enablement - Improve communication about enablement and its benefits • Product Innovation • Develop plastic expertise and products - need to increase capabilities for working with plastic to fully capitalize on its growth potential • Increase cross BU integration - can strengthen position with trade and consumer by leveraging broader OPNA • Improve shelf presence through new packaging (physical and graphical) - Update packaging to make it easier to shop and to strategically influence consumer buying behavior • Growth • Expand presence in adjacent categories w/ low market share (e. g. tabbing & bound documents) • Potential opportunities in vertical segments (legal, realestate, etc. ) could provide incremental growth opportunities • Distribution in new channels (e. g quick copies/Kinko’s) is another opportunity for growth • Expand develop more consistent consumer promotional vehicles • Focus spending on more targeted database marketing to increase impact while reducing cost (fewer small/experimental efforts) • Cross BU integration to extend message for dividers and other BUs • Cost Savings • Focus marketing resources and dollars more strategically and efficiently (fewer, more focused efforts) • Simplify product line - build on 2002 discontinuation efforts to reduce duplicates and near duplicate products • Adjust product specs to optimize consumer value (by balancing price and quality) - don’t always sell cadillacs • Sharpen Focus and communicate more clearly • Focus sales team and promotional activity on biggest growth/profit opportunities, meaning not every product line will get supported to the same level • Leverage alliances more completely and effectively (software, printers, customers, etc. ), look for ways to work together to expand reach and save money in accessing the end consumer • Increase level of competitive intelligence - track competitive activity to look for potential voids Avery can fill • Improve outsourcing capabilities to increase production alternatives, development speed and reduce cost
SWOT Analysis Threats • Private Label - customers are becoming competitors • Need to develop and articulate divider PL position, recognizing it will vary by situation (e. g. give up Insertables and Write-On to PL, defend IM, DP and RI with patents or programs) • Need to push for a clear and consistent Avery OPNA PL position that gives BU’s the flexibility to address their category realities without being inconsistent throughout Avery (e. g. PL is not supported by programs, programs encourage branded sales) • Competition - Customers are competing on price (Centis) and innovation (WJ) • Asian product is fueling cost pressure for category (PL, Better Office, etc. ) • Wilson Jones demonstrated the ability to find a hole in our offering and exploit it successfully (View Tab) to gain share • Plastics, which we position as premium, are frequently use as entry price point products • Need to leverage strength of account relationships, proprietary products, brand, enablement, and consumer knowledge to highlight Avery’s value to customers and consumers • Need to also acknowledge that some products are commodities and compete aggressively to maintain share • Trend to digital over paper presentations, archiving and reference • Optimize awareness and sales to users of paper/plastic organizational consumers • Look to categories that are less susceptible to obsolescence from digital alternatives • Slow Economy • Defend share against competitors and private label, so as to be well positioned to benefit from increased consumer consumption once the economy improves
Consumer Promotion Review
Consumer promotion Objective and Strategy • Objectives of the 2002 promotions: – Gain consumer awareness - Great Results Newsletter & off-shelf displays. – Generate trial - Cross-sell, database sampling and consumer seminars. – Encourage repurchase - retail circular placement. • 2002 Promotion Strategy: – Shift promotion dollars from Direct Print to Index Maker and Ready Index. – Focus on targeted database sampling to increase ROI on promotions. – Gain awareness and trial of new products.
Consumer promotion Payback Analysis Assumptions: • Converted Users reflects adjusted response rate based on the following: - Consumer Opportunity Matrix reflecting 25% conversion rate for IM and 19% DP - '99 DP DTD post promotion research - Adjustment for overstatement based on IM/DP '99 Recontact Study - Average set per converted user of 30 based on Consumer Opportunity Matrix • Incremental GM profit and top line sales includes cannibalization
Consumer Promotion Payback Database Sampling • Success of E-mail Distribution depends on control over E-mail distribution by filtering out non-targeted sample requests. • Avery Database tend to be exhaustive. Purchased lists carry less value. • Customer Database Sampling is more targeted and, in most cases, customers can track purchase behavior before and after consumer trial. • Corporate Express - Currently available • Staples - Currently available • Boise - Expected to be available in 2003 • Office Depot - Capability and resource questionable Note: Currently no other commercial promotion data available. Trade initiatives in place to better track promotion activities in the commercial channel.
Consumer Promotion Payback Cross Promotion • Cross promotion encourages sampling and adds value to host products: – Overall response rate has been above 2%. – Cross Promotion provides a wide reach and targets ideal substitutes or complimentary products. – This vehicle requires long lead time. Therefore, setting up version codes will help work though the inventory) – Host products may not always be available. There should only be one promotion in each host product at any given time. – Sample offer (w/ coupon) cost more than product inpack, but helps build database and provides opportunity for consumer research.
Consumer Promotion Payback Consumer Seminars 2002 Dividers Participation in the Consumer Seminar and Relationship Activities: -Easy Edit (25 K) -RI Translucent (15 K) • # of seminars conducted YTD July ’ 02: 1, 074 (. 5% decrease from ‘ 01*) • # of consumers reached YTD July ‘ 02: 32, 537 (. 55% decrease from ‘ 01*) • 1, 074 seminars scheduled/conducted in 2002 (vs. 1, 690 YAG) * - The poor economy and large number of white collar worker layoffs had a large impact on MANY consumers who have had to cancel or postpone seminars - We have fewer AMs/CAMs in the field than we did last year - Our AMs/CAMs are now also devoting some of the time that they used to focus on scheduling/conducting seminar toward the Avery Site License program. To date this year, we have placed 71 Site Licenses for a total of 62, 566 workstations/users. • Consumer seminar is a cost-effective way to create consumer awareness and trial: • Consumer seminars offer the highest payback (approximately 3 months) • Seminar offers low cost of conversion and high impact sampling when combined with consumer education (presentation and video), sampling and word-of-mouth. • The downside is narrow reach (seminar is a limited and shared resource)
The Enablement Menu 11 Software Avery Wizard 12 Software Design Pro 1 Packaging 2 Formatting and Printing Tips 10 3 Direct Print Collating Software Microsoft Word 9 Direct Print Custom Divider Template CD for MS Word 4 Microsoft Template Gallery 8 5 Avery. com Print From the Web 7 6 Avery. com Pre-designed Templates Blank Templates Email Auto Reply
Cross-BU Integration Cross BU Activities and Products
BU Integration Picture View n Binders ($7 MM Aug YTD, $46 MM since launch ’ 99) and Dividers ($100 M Aug YTD 2002 launch year) Flexi-View n Binders ($3. 9 MM Aug YTD, $23 MM since launch ‘ 01), Dividers ($100 M Aug YTD 02), Sheet Protectors ($ ? ? ? ) Drawable Concept - Multiple Product lines within BUs n Binders, Dividers, Sheet Protectors Presentation for Dummies (Centis Me-Too) n Project not launched but valuable learning process in working together to create a bundled product. IM Templates including spine I. D.
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