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Key topics

BUILDING THE BUSINESS CASE FOR NEW PACKAGING FORMATS Dr Trevor Davis, IBM Consumer Products Expert. Key topics. Old kit, new kit, new factory … how to make the best business decision? How to assess the contribution of new packaging to the success of your project?

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Key topics

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  1. BUILDING THE BUSINESS CASE FOR NEW PACKAGING FORMATSDrTrevor Davis, IBMConsumer Products Expert

  2. Key topics Old kit, new kit, new factory … how to make the best business decision? How to assess the contribution of new packaging to the success of your project? How to work out the real contribution of new products to your company? How to work out the real cost of NPD in your organisation?

  3. It important to understand the KPIs that count for decision-makers Process Performance Measures KPIs • Portfolio payback measures • Profit contribution • Return on Investment • Margin • Revenue due to new products/services released in past year • Project measures • Investment (CAPEX, OPEX) • discounted cash flow (IRR, NPV) • break even point • Incremental NPS • Cannibalisation

  4. It is important to know what the “case for change” is before you start Market or Channel driver or consumer benefit Value-engineering & sustainability

  5. Twitter, Pinterest and Facebook involve consumers in packaging For better or worse!

  6. Packaging is getting smarter – not just a supply chain decision • Interactive features must provide value to engage the consumer - inspires loyalty in the world of social media, but the purpose of functional labels must reflect the Brand message • Ability to provide the consumer with interactive data e.g. remaining volume, temperature, time left until the freshness expiry

  7. A packaging business case has to be viewed in context of the mix Net sales - COGS Mix Proposition – Product – Pack – Price format / sku strategy

  8. The key areas of cost to capture • Primary and secondary packaging • Multipacks • Closures / caps • Promotional packs Barcodes / RFIDs / NFC / e-ink etc • Factory / equipment costs (incl tax implications) • Logistics and co-packer charges • Pallet costs (including pallet packaging) • Mock-ups and samples • Testing • Courier costs • Artwork , repro’, printing and labels • Write-offs / downs (e.g. obsolete stock) • Environmental impacts • Productivity changes

  9. Success is measured in terms of how consumers and trade perceive the change, and how much extra revenue comes in

  10. In the future, the business case will show contributions across the ‘triple bottom line’

  11. BUILDING THE BUSINESS CASE FOR NEW PACKAGING FORMATSFor more information contact trevor.davis@uk.ibm.com

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