EMR BUYING MIX ANALYSIS WORKSHEET
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1 EMR BUYING MIX ANALYSIS WORKSHEET 1. A Buying Mix Analysis provides a means of assessing the competitiveness of your product offering, through the eyes of a Buyer in your account. 2. The Buying Mix Analysis measures the Buyer s perception of the important aspects of the offering and conducting the analysis helps you step out of your company and view its products from the point of view of a purchaser rather than a seller. 3. Instructions: Make a few photocopies of the form as worksheets Choose and name a particular retail organisation Choose and name a particular Buyer whose perception you wish to assess Select one of your Brands and its competitors within that retailer (name the brands and select an own-label if relevant) Assess the Product buying influences that motivates the chosen buyer (consider aspects such as brand share, rate of sale, originality) and write them as subheadings to Product Assess the Price buying influences that motivate the Buyer (consider aspects such as margin, cash profit, settlement discount, over-rider) and write them as subheadings to Price Assess the Presentation buying influences that motivate the buyer (consider aspects such as media spend, below-the-line spend, promotional material, pack design) and write them as subheadings to Presentation Assess the Place (distribution) buying influences that motivate the buyer (consider aspects such as frequency of delivery, availability, pallet configuration, J-I-T facility) and write them as subheadings to Place. (NB. It is important to choose combination of influences that are the priority influences on your chosen buyer - If uncertain, why not ask for clarification on your next visit?) Next score each individual influence subheading across the page, from the point of view of the buyer (forget your own opinion), ensuring that the scores add up to 100 Weighting the influences: it is now necessary to assign a weighting to individual influences to reflect their relative importance to the chosen buyer (i.e. margin is probably more important than the pack design!). Weight the influences by dividing 1.00 between the chosen influences, giving each influence an individual weight, ensuring the total of the weights add up to 1.00 down the weight column Next, multiply each score by its appropriate weight and enter the results in the weighted score column Add the weighted scores and enter totals at the bottom of each column The weighted totals should represent percentages and add up to 100% The completed form will now indicate strengths and weaknesses of the products, through the eyes of the buyer, representing relative attractiveness of the various offerings 4. Completing the analysis provides you with a quantified strengths and weaknesses assessment of your product versus its competition, from the point of view of your chosen buyer. 5. This allows you to present the offering in its best light, emphasising its advantages and minimising its weaknesses, compared with the competition
2 A. Review the Buying Criteria BUYING MIX ANALYSIS Analysing the Results 1 Have other, more important, criteria occurred to us since we commenced the analysis? 2 Have we chosen only those criteria where we are relatively strong (remember that the buyer is basing his choice on hid criteria, in an open market and our analysis should reflect this combination) 3 Should we restate/replace some of the criteria in order to focus the analysis more accurately? (write explanatory notes on the relevant page of the notepad ) B. Review the Weightings 1 Ensure all weights add up to one! 2 Try to think yourself into the mind of a particular buyer within a specific customer organisation 3 Reassess the total weightings for Product/Price/Presentation/Place in order to reflect their true importance to the Buyer - certain? C. Review the scores 1 Ensure scores add to 100 horizontally. 2 Reassess the scores; are they as seen by the buyer? a) How do we know? b) How much better/worse are we on each criterion? D. Review the Weighted scores 1 Does the total of the weighted scores reflect relative product strengths (product shares) in that customer? a) Are our product scores unrealistically high? b) Remember that the analysis is meant to reflect that particular buyers view of the available offerings, and reflects perception rather than an absolute. 2 Identify the High scores a) Should they be higher? Lower? b) Is our advantage over a competitor due to one criterion, or evenly spread? c) What are the strong-points/weak-points of our offering, Vs the available competition? d) What would have to be changed in order to make our offering more acceptable to the buyer? e) If change is not possible, how can we present our offering in order to maximise our strengths, and minimise our weaknesses, vice versa the competition? 3 Conduct several What- if analyses, modifying weights/scores (one criterion at a time) to determine sensitivity of the criteria (remember to save each version of the analysis for later comparison.
3 BUYING MIX ANALYSIS (Analysing the Results) Contd. 4 Do we know enough about the buyer s criteria and their relative values? 5 What evidence/proof do we need in order to strengthen our case? 6 For each criterion, think about why the competition are better/worse than our product a) Upon what is our judgement based? i.e. what are the means used by this buyer to assess a specific criterion? b) How are we allocating the particular score in each case? c) Are we believing our own propaganda rather than looking through the eyes of the buyer? 7 What are the gaps in our knowledge of the competitive offering? a) How important are these knowledge-gaps in terms of their effect on the total score? b) What research is necessary to fill the gaps? 8 If we appear to have a stronger proposition than our share of business with this customer indicates, what are the possible causes? a) Our strengths are not rated by the buyer?-in which case, are they strengths? b) We are possibly under-estimating some aspects of the competitive offering and its attractiveness to the buyer? 9 Fundamental Issues a) To what extent is the compromise affecting the Buyers decision? i) How close are the available offerings to the buyers ideal? ii) Is the buyer compromising without realising the degree of sophistication of our product and its ability to satisfy his higher needs? iii) How do we find out? b) How systematic/rational is this buyers buying behaviour? i.e. Hunch vs. considered judgement? c) To what extent is supplier franchise (relationship with the Nam) affecting the purchase of this particular product/category? d) How stable are the buyers e) How representative is this buyer of i) Other buyers in this account ii) Other buyers in this market f) How do other members of the Decision-making-progress affect the decision? i) Who are they? ii) iii) What influence do they have on the decision to buy? How does their influence vary with purchases that are - New-buy - Re-buy - Modified Re-buy iv) What are their buying criteria? v) NB a complex or critical sale may require separate BMA for each member of the Decision-making-unit g) How well do we know the buyer? h) How well do we know the consumer? i) How well do we know the competition?
4 ANALYSIS ( A ) PRICES & TERMS SOURCE Margin POR (Profit on Return) DPP (Direct Product Profit) Competitiveness Settlement Discount Free Goods Display Bonus O/R (Overrider) Tailor Made Competitions Ad-Hoc Discounts Contract Prices Buyers Incentives Low Minimum Order Quantity Credit Period Actual PRESENTATION SOURCE Market Research Advertising Consumer- TV / Press Trade Press Leaflets Brand Image Test Market & Analysis Consumer Trends Proof of Value Sampling Couponing Sales Promotion Consumer Profile Matching Clear Category Strategies Category Captaincy PLACE DISTRIBUTION SOURCE Delivery Speed Delivery Reliability Ex Car Stock Pallet Configuration Ship Outer Convenience Just in Time Cross-docking Supply Class Efficiency Preferred Supplier Status Multi-sitting Within Store PRODUCT SOURCE Ease of Display Packaging Materials Quality / Effectiveness Shipping Outer Strength / Concentration Rate of Sale Brands Share Category Insight Sales / sq.ft. Profit / sq.ft.
5 EMR Buying Mix Analysis Buyer Our Product Competitor A Competitor B Buying Influence Weight* ** ** ** PRODUCT PRICE PRESENTATION PLACE 1.0 Copyright EMR-NAMNEWS Ltd. * The Weights must sum to 1.00 ** The scores must sum 100 Horizontally
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