Trade Management (TrM) Sami Kureishy Application Consultant, QAD

1. Trade Management (TrM)Sami KureishyApplication Consultant, QAD

2. Agenda • Opportunities and Challenges • QAD Credentials • The QAD Solution • Partnering for Success • Questions

3. The Marketing Reality…

4. Opportunities & Challenges Trade Management

5. Brand Allows Differentiation

6. Brands can be 75% of the market cap of CP companies National and International brands under attack from private label Retailers building own brands Companies are building portfolios of brands they can market and sell to the same channels Brand Management

7. Trade Promotions • Money to Stock Line • Money to Select Shelf Space • Money to Stock throughout the Supply Chain • Money to Advertise • Money to Manage Space • Money When Sold Money to Build Brand and Drive Profitable Business!

8. Promotional Spending Facts • Promotional spending activity continues to grow, as does dissatisfaction with its effectiveness • The correlation between the effectiveness of promotions and IT is important to trade promotions success rates • Most solutions are developed in house and not integrated with other business applications • Fewer than 4% of manufacturers surveyed by Aberdeen indicated they had best in class performance • Sarbanes-Oxley redefines how promotions are reported • There is ample room for improvement!

9. Some Numbers • Trade fund budgets run between 10%-30% of revenues • Trade promotion management is responsible for 20% of a company’s profits and comprises as much as 70% of marketing budgets • Trade funding ranks as the 2nd highest cost for manufacturers behind the cost of goods • Estimated $8B wasted every year in deduction management across industries • Deduction investigation costs $260 per event • Deductions less than $1,000 usually not investigated --- automatically granted

10. The Retail vs. Supplier Syndrome • 93% of manufacturers rate trade-promotion spending and effectiveness as an extremely important issue • 78% of retailers rated trade-promotion inefficiency as an extremely important issue

11. The Retail vs. Supplier Syndrome • 84% of manufacturers do not feel that they are getting good value for their trade dollars… • 62% of retailers are not satisfied with their share of trade dollars and feel shortchanged

12. The Business Issues • No integration between promotions, product planning and Finance • Little visibility of aggregated promotional activity or its effectiveness • Unresolved erroneous and fraudulent claims • Inefficient administrative procedures • Ineffective analysis & evaluation • Deductions processing with no audit trail • Trade spending out of control!

13. Trade Management QAD Credentials

14. With Error No Error Real Customer ROI • Before Trade Management • Pricing errors occurred on more than 60% of invoices* • *Estimate based on # of deductions received for pricing errors • Daily Invoices = 250+, • With Errors = 150 = 60% error rate • After Trade Management • Pricing errors dropped to 10-15%* • *Estimate based on # of deductions received for pricing errors • Daily Invoices = 250+ • With Errors = 38 • A 45% reduction 100% 80% 60% 40% 20% 0% After TM Before TM

15. 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Total Hours Total Promos Before TM After TM Real Customer ROI • Before Trade Management • All promotions entered for each customer, each item, each deal • 5000+ promotions per year • 5000 x 5 min/input = 417 Hrs/Year • After Trade Management • With grouping functionality, # of promotions required reduced by 37% or 1,850 per year • 1850 x 5 min/input = • 154 Hrs saved per year

16. Before Trade Management Open deductibles somewhere between 2000-3000 Research & resolution time between 60 - 160 days After Trade Management Deductions reduced to average of 1200 Resolution time dropped to average of 30 days with many resolved within 7 days Using on-line lookups, research time significantly reduced with more time to work with customers 2500 2250 2000 1750 1500 1250 1000 750 500 250 0 Avg R&R Time Total Deductions Before TM After TM Real Customer ROI

17. Customer Feedback “We save over $2M annually through accuratededuction processing” “We saved $5M in the first year, almost eliminating erroneous and fraudulent claims”

18. Trade Management The QAD Solution

19. Significant Opportunity • $1B company • 15% average trade promotional spend • 2% gain would equal $3M to bottom line • Could achieve same sales for $3M less • Or could spend same with a $20M promotional lift • ROI is in months!

20. TrM – ROI Drivers

22. Planning Evaluation Documentation Administration Approval Execution Trade Promotions Management Process Sales & Marketing Supply Chain Finance Finance Sales & Marketing Supply Chain

23. Price Lists Price Lists Promotions SO InvoiceLoad Invoice Claims A/R A/P G/L MFG/PRO – Trade Management Integration TrM MFG/PRO Customers / Products (Divisions, Groups, Profiles) Customers / Products Rebates Accruals Rebate Run Deductions Write Off Back to AR Promo Claim Short Payment in AR

24. Trade Management Feature Summary • Pricing • Customer and Product Profiles • Customer Groups • Product Groups • All pricing defined in TrM • Promotions • TrM supports off-invoice, bill back and lump sum promotions • Customers can be added to promotions individually or by customer group • Items added in-total, individually or by product group • TrM accrues the liability for lump sum and bill back promotions

25. Trade Management Feature Summary • Rebates • Customers added to rebates individually or by customer group • Items added in total, individually or by product group • Accrues the liability for rebates • Generates rebate payments using MFG/PRO AP vouchers and AR memos • Claims And Deductions • Customers submit claims for lump sum promotion monies, deferred discounts from bill back promotions and rebate payments • Claims paid by MFG/PRO AP vouchers or AR credit memos • Supports payment of claims by deductions • Deductions entered when payments received in MFG/PRO • Claims generated from deductions

26. Promotion View

27. Promotion View – Product Summary

28. View Deal Workbench

29. Trade Promotion Feature Pyramid

30. Trade Management Partnering forSuccess

32. plan Plan • Change Management –Reengineering, Risk Assessment • Strategic Planning – Architecture/ Integration Planning • Governance/ Compliance – SOX, cGMP, Sunrise 2005

33. Design • Business consulting to design the model • Technical consulting to change information architecture & rationalize data centers

34. Implement • Project management • Project consulting • Project Methodologies • Project Review/Quality Assurance

35. Manage • AMS – Application Management Services • Standard Global Support • eLearning

36. Trade Management Questions