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A DemAnDTeC CusTomer suCCess sTory

CusTomer oVerVIeW

Challenge Retailer gains were inconsistent on trade events. With little post-event analysis or predictive modeling, Tyson drew fewer bites on future promotions.

Solution Powerful Software-as-a-Service application aligned new business processes with retailers. Consistent successes sprang from a newly shared clarity, better sales plans and event analysis

Key Benefit Tyson soars with DemandTec’s Trade Planning & Optimization service and dramatically raises case volumes, trade ROI, margins and retailer profit.

ComPAny snAPsHoTn Revenue US$26B

n Market Sector Food production and distribution

n Geography Global

ChallengeTyson Foods, the world’s largest processor and marketer of chicken, beef and pork, knew it needed to drive better trade marketing effectiveness as a category leader. Promotion planning was inconsistent, retailer demands were escalating, and trade dollar spending was rising.

Tyson reassessed its entire approach – process, systems and people. It was a first major step to improve trade promotions through superior planning, execution and analysis. Tyson reasoned that if retailers could readily see how trade events benefited them, and could be part of a collaborative process that made events “more theirs,” they’d buy in more regularly.

The company’s self-scrutiny turned up some key gaps in trade promotions. Michael Shinstine, Tyson’s Senior Director of Sales Planning, highlighted these gaps at the Consumer Goods Technology 4th Annual Sales & Marketing Summit:

n Rising costs. Trade spend and execution costs were rising, as were retailer demands, and costs of goods and fuel, which pressured performance. Offering little relief, Tyson was inconsistent in its approach to events, and did not involve its customers in planning.

n Insufficient data. Real-time spending updates were impossible with spreadsheet data. Syndicated data was hardly used. The absence of post-promotion analysis meant few valuable insights followed events.

n No view of the future. Because Tyson couldn’t predictively model future promotions, it was more reactive than proactive.

n Rigid technology. Tyson’s inflexible systems limited promotion planning to its own fiscal year, rather than more appropriate customer timelines.

n No empowerment. Tyson teams often lacked the authority, selling experience and sales planning abilities to ensure powerful programs.

solutionTyson undertook a one-year plan to dramatically improve its approach. A broad self-assessment began in September 2005. By December, the company was accurately sizing how much more effective trade spend would deliver, through its tighter grasp of total ROI across the business, and performance by account, by event and by promoted group and SKU.

Tyson uncovered several key findings, said Mr. Shinstine:

n Significant opportunity existed. Since it varied by customer and product, a tailored approach was necessary.

n Most promotions were positive for customers but negative for Tyson. This would soon improve with knowledge of which products to promote together rather than separately, and with Tyson’s new capabilities for pre- and post-analysis and predictive planning – all enabled by the Trade Planning & Optimization software service.

Tyson Foods Optimizes Trade Effectiveness with DemandTec

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www.demandtec.com

“Tyson benefited immediately

from more powerful, predictive

and analytical trade events.

Optimal planning yielded

38.7% greater contribution

and 13.7% higher trade ROI.

Trade spend became 5.2%

more efficient, and case

volume rose by 3.4%.”

Michael ShinstineSenior Director of Sales Planning

Tyson Foods Inc.

Another plus was vendor-retailer collaboration based on a shared understanding of consumer demand. Putting the consumer at the center of the trade planning equation helped Tyson focus on what mattered most – driving the right consumer behaviors to maximize total category objectives, not just total Tyson portfolio metrics.

Tyson soon attained a leadership position in trade promotions, with tailored strategies and events that grew retailer categories and Tyson brands. To achieve this, Mr. Shinstine said he sought a best-in-class technology partner that was:

n Easy to use. The interface needed to follow current work flow. Sales planners had to be able to use the system intuitively. The system needed to build events the way Tyson plans. It had to develop a predictive category plan vs. a brand plan, and quickly build proposals.

n Based on superior insights into consumer demand, with higher forecast accuracy.

n Scalable, and able to model all categories.

n Lower risk. Software-as-a-Service delivery minimized Tyson’s IT burden.

n Enhances collaboration opportunities with retailers.

DemandTec’s Trade Planning & Optimization software service met these criteria. This, along with reconfigured business processes and better-trained teams, had Tyson ready to fly.

BenefitBy upgrading its trade promotion planning process, Tyson achieved significant brand and category improvements and developed a more meaningful way to engage with key customers.

In a case study presented by Mr. Shinstine at the Consumer Goods Summit, Tyson found that promoting its Boxed Wing product at one retailer yielded unfavorable results for the brand. The DemandTec software guided Tyson to shift ad dollars from the boxed product to the bagged line, and buy a two-week display instead. Performance improved in many ways (see table):

Proactive leadership like this earned Tyson the prestigious 2007 Category Captain Award from Progressive Grocer. Mr. Shinstine said upon receiving it, “This software has allowed us a much more consumer-centric approach to promotions, creating wins for Tyson, retailers and consumers.” Optimized trade promotions have produced differentiating gains and a stronger platform of trust and credibility with retailers.

Learn moreFor more information, call 1-888-221-6128 or visit www.demandtec.com.

09/08

PREDICTIVE ANALYTICS LIFT PLAN PERFORMANCE

Metric % improvement vs. initial plan

Case volume 0.6% Flat volume

Trade spend 0.3% Flat spending

Increased contribution margin 16.1% Significant profit gain

Manufacturer trade ROI 16.4% Better ROI

Retailer profit 1.9% Retail profit increase

Source: Tyson Foods, 2007

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Copyright © 2008, DemandTec, Inc. All rights reserved. Printed in the USA. DemandTec and the DemandTec logo are registered trademarks of DemandTec, Inc. DemandTec Trade Effectiveness, DemandTec TradePoint Network and the DemandTec Platform are trademarks of DemandTec, Inc. All other trademarks mentioned in this document are the property of their respective owners.