Next Generation Trade Management Timo Simon Director Products

Next Generation Trade Management Timo Simon, Director Products, Innovation and Business Development, Maihiro Gmb. H Gregor Johann, Product Manager for SAP Trade Management, SAP SE

Next Generation Trade Management is a full solution re-launch 1. 2. 3. 4. One Development Team Continuous Improvement Address Functional Gaps UX Innovations 5. 6. 7. 8. Customer. Driven Roadmap S/4 HANA Strategy Leverage the Power of SAP Hana, SAP Fiori, SAP Leonardo, … More Preconfigured Options

MULTIPLE BUSINESS MODELS AND ROUTE TO MARKET Mass Market Modern trade Buying Group Retailer Estore Distributor Traditional stores Consumer Manufacturer Marketplace operator Marketplace Direct to Consumer Segment of 1

Industry Challenges RETAILERS ARE EXPECTING MANUFACTURER SUPPORT TO ACHIEVE THEIR REVENUE AND PROFITABILITY TARGETS RETAILERS ARE DEMANDING BUSINESS PLAN TAILORED FOR THE BUYER IN THEIR OWN LANGUAGES AND KPIS 60%OF 50% 40% 30% 20% 10% MERCHANDISING TRADE SPEND ARE ASSOCIATED WITH EVENTS THAT DELIVER NEGATIVE PROFITABILITY WITH AN AVERAGE EVENT ROI OF -10% (Pw. C Strategy&) 82% 60% 50% 40% 30% 20% 10% OF CONSUMERS WILL SUBSTITUTE AND SWITCH BRANDS DUE TO AN OUT OF STOCK PRODUCT 52%OF 50% 40% 30% 20% 10% CONSUMERS AGREE THE PRICE OF A PRODUCT IS MORE IMPORTANT THAN BRAND 80% 60%OF EDLP 50% 40% 30% 20% 10% SPEND ARE ASSOCIATED WITH EVENTS THAT DELIVER NEGATIVE PROFITABILITY WITH AN AVERAGE EVENT ROI OF -20% 50% (Pw. C Strategy&)

Revolutionizing trade management with a holistic, integrated process from HQ target setting to execution with wrap-around optimization Statistical forecasting and optimization Sales Planning and Budgeting Promotion Planning Customer Planning Insights Machine Learning Post evaluation Execution and Settlement Internal/external actual data Model driven

SAP TRADE MANAGEMENT OVERVIEW The Trade Management Revolution – Reimagining the End-to-End Process

We are driven to resolve high dissatisfaction levels in the marketplace KEY MANAGEMENT FOCUS AREAS 1 TRADE SPEND REDUCTION Only 19% of survey respondents were able to reduce trade spend as a percent of sales. WHAT TRADE MANAGEMENT DOES FOR YOU Enables CP sales leaders to drive growth beyond shortterm measures of promotion effectiveness to longer-term mutually defined targets including category growth, sustainable baseline volume growth and margin growth. Only sales leaders with accountability for all volume can develop programs that drive customers’ category growth and build baseline volume to drive their own margin growth.

We are driven to resolve high dissatisfaction levels in the marketplace KEY MANAGEMENT FOCUS AREAS 2 FUNDING ALLOCATION 72% of companies cite the need to match historic spend levels or hit a specific revenue target as the primary drivers, not profitability. WHAT TRADE MANAGEMENT DOES FOR YOU Enables sales leaders to sense and predict both the presence and severity of potential risks to revenue, volume and profitability relative to both company and customer targets and KPIs in real-time. Own the entire p&l and prioritize investments and growth opportunities based on objective assessments of customer value and profitability

We are driven to resolve high dissatisfaction levels in the marketplace KEY MANAGEMENT FOCUS AREAS 3 CUSTOMER PLANNING Nearly all companies reported eventprofitability/ROI as the primary measure of success; however, 59% struggle to translate learnings into future plans. WHAT TRADE MANAGEMENT DOES FOR YOU Understand implications for all strategic and tactical decisions vs. full-year targets, plans and KPIs for both parties. Enable factbased decision making to drive activities best aligned to targets Visibility to overall return on the relationship versus simple measures of promotion effectiveness, enabling both cp sales leaders and their customers to prioritize jointly future strategies, investments and programs.

We are driven to resolve high dissatisfaction levels in the marketplace KEY MANAGEMENT FOCUS AREAS 4 SYSTEMS AND TOOLS 2/3 rd of respondents reported not having predictive or post-event analytics systems capabilities WHAT TRADE MANAGEMENT DOES FOR YOU Wrap-around optimization supports every single trade management process step providing machine-learning insights that drive performance analytics as well as future predictions and optimization Identifying “best course” options for full kpi achievement considering past performance, forecast results, real-time market conditions and other constraints.

Customer Business Planning Insights, powered by SAP Analytics Cloud • Get a start with pre-defined business content. Easily extend sample stories and sample data models to fit your specific needs • Quickly combine with additional KPIs data • Easily monitor and take action for sales review e. g. on a monthly basis • Collaborate with your team in realtime • Communicate success with compelling visualizations and profound insight

SAP TRADE MANAGEMENT DEMO Demo

SAP Customer Business Planning Price and Volume Planning (P&L View) Planning based on different views: P&L, Product Tree or summary view Monitor key performance measures Drill down along the planning hierarchy Budget Monitor to evaluate reserved and available budget Zoom-in, Zoomout Graphical view of the planning data Drill down along the P&L planning view Compare plan against last year, version or reference data

SAP Customer Business Planning Price and Volume Planning (P&L View) Select Measure to maintain Planning Hierarchy view of your planning data Tabular view of the planning data

SAP Customer Business Planning Price and Volume Planning (P&L View) Plan all measures based on any level of the product planning hierarchy Product Tree View or flat view of a hierarchy level Planning Hierarchy view of your planning data Promotion Slider to plan promotions on plan screen

SAP Customer Business Planning Price and Volume Planning (P&L View) Review plan impact (after recalculate) Personalize Slider Columns Filter and search options for promotions Change data in slider for multiple promotions – use pop-ups for complex data Bulk actions for promotions Update Plan

SAP Customer Business Planning Price and Volume Planning (P&L View) investigate alternative approaches for meeting the Customer plan targets Assign promotions to plan scenarios Activate the best scenario meeting the plan objectives Easy comparison and maintenance of plan scenarios

SAP Model Company Key Building blocks

SAP Model Company for Trade Management for Consumer Products Lion, Australia – Early adoption of Model Company approach as Pilot Customer SAP MC 4 Trade Management for Consumer Products – Available in April 2018 Lion, Australia – SAP MC early adopter support started in February 2018 Access to MC Reference System (S/4 HANA, CRM and BW) Project acceleration through best practices and pre-configured content: - Golden Business Processes - BC Sets for SAP CRM - Initial Promotion Planning Configuration - Approval Processes - Integration concept S/4 HANA / Trade Management SAP is part of Lion Project Team in Sydney SAP Expert support (remote) from MC 4 Trade Management for CP build Team Remote support from SAP Trade Management Development Team

“Simplify”: Global trade promotion processes for local markets Our Customer Project goal Scope of the project § Founded in 1876, today a global supplier of branded goods and system solutions for consumers and industry § Strategic business areas: detergents and cleaning agents, cosmetics/body care, adhesives, sealants and surface technology § Around 51, 000 employees in 120 countries § EUR 18. 714 billion turnover in 2016 § Improved communication between key account management and field sales § Transparent and efficient key account management § Evaluation of promotions and their profitability § Timely KPI tracking in sales § Implementation of a fully-integrated account management process, integrated into a globally-uniform CRM platform Process scope § Key account planning § Trade promotion management as an online laptop solution (promotion planning and execution) Project profile: Henkel KGa. A, Düsseldorf Photo

What does our co-innovation partner say? • Henkel Co-Innovation Story