1、European Net Pricing:You have to act now!SK observationsContinuous changes of buying groups and its members incl.local heroes Increasing demands for net price harmonizationSK recommendationStart preparing for increasing international net price and trade terms harmonization NOWEurecaEverestEURELECama

2、zonLidldmepic partnersCoopernicAgeCoreMembers Carrefour EDEKA Jumbo Picnic Systme U Ahold Delhaize E.Leclerc Rewe amazon Kaufland Lidl dm EDEKA Esselunga Migros Jeronimo Martins Jumbo Picnic Systme U Ahold Delhaize Coop Italia E.Leclerc Rewe Colruyt Conad Coop EroskiCountries+others+others+others+ot

3、hers+others+others+others+others+others2Profit risk|Increasing tendency for international net price comparisons within buying groups leads to high profit risk for international consumer goods manufacturers Source:Simon-KucherRiskNet price harmonizationEuropean trade termshighlowLatest changesSimon-K

4、ucher|European net price management|2024What is your European Net Price approach?How do you evaluate the profit risk due to buying groups exploiting your net price differences?1 3Source:European Net Pricing Webinar,13th March 2024;Simon-KucherMarket sentiment|Consumer goods manufacturers feel the pr

5、essure from intl retailer/buying groups but are not well preparedConsumer goods manufacturers have to act now!87%of manufacturers feel profit risk from intl buying groups and 61%do not pro-actively manage net prices on a European levelHigh 48%Medium 39%Low 13%Dont know;1%Firefighting40%Local21%Pro a

6、ctive 29%Euro.11%Firefighting Re-active approach to manage demands from intl retailers/buying groupsPro-active Pro-active management of retailer demands with market-,retailer-,and SKU-specific target prices and mitigationsLocal for Local No international net price steering approachEuropean Pro-activ

7、e European net price management integrated with European PPA and trade terms approachSimon-Kucher|European net price management|2024 Local-for-local approach Local P&L,iKAM for intl accounts European steering with local P&L Fully integrated European Governance and P&L No international net price stee

8、ring approach One European target net price corridor Differentiated target net prices per market,retailer,and SKU Differentiated target net prices per market,retailer,and SKU with aligned trade investments Lacking structure and know-how to cope with demands from intl retailers/buying groups Re-activ

9、e fire-fighting approach to manage demands from intl retailers/buying groups Pro-active management of retailer demands with market-,retailer-,and SKU-specific mitigations Pro-active European net price management integrated with European PPA and trade terms approach Locally different EXCEL templates

10、EXCEL-based tool centrally managed with basic functionality EXCEL-based tool with sophisticated simulation and monitoring options Fully integrated and automated software solution 4European Net Pricing maturity stepsSimon-Kucher|European net price management|2024Source:Simon-KucherAmbition level|Euro

11、pean consumer goods manufacturers should be at least on a Sophisticated maturity level to be well prepare for retailer demandsBEST IN CLASSSOPHISTICATEDBASICADVANCED5Next level of European Net Pricing|Sophisticated net price management with targets per country,retailer and product is essential to op

12、timally manage increasing pressureSource:Simon-KucherMarket-and retailer-specific target net prices enabling actionable European steering and profit maximizationGeneric approach lacking compelling risk evaluation and actionable mitigation strategiesNet pricesCurrent net pricesTarget corridorNet pric

13、esCurrent net pricesTarget net priceBACBAACInt.retailer/buying gr.MarketIllustrativeIllustrativeOne European target corridor per SKUCalculated net price riskHigh-level prioritization based on price gaps vs.corridorGeneric mitigation approach on market levelDifferentiated target net prices per market

14、,retailer and SKUCalculated net price risk considering defendable net price gapsDetailed prioritization of risks on SKU-,market-and retailer-levelMarket-and retailer-specific mitigation actions on SKU-levelCorridor approach(1.0 version)European net price management 2.0BACBAACInt.retailer/buying gr.M

15、arketSimon-Kucher|European net price management|2024vs6Golden rules|Based on our extensive experience in developing and implementing European net price management concepts,we know what works in the marketSource:Simon-KucherGolden rulesData is essential:Have a trustworthy database and comparable net

16、price calculationNet price differentiation is a must:Maintain net price differentiation wherever possible and identify spaces to even increase differentiationMake differences explainable:Guide towards explainable net price differences based on objective criteria(e.g.,shelf price level per country)Si

17、mplicity is key:Elaborate net price methodology that is easily explainable and impactful at the same timeSpecific/granular measures:Define actions on most granular level to provide clear guidance for implementation(e.g.,target price per country,retailer and product combination)Local implications:Don

18、t forget impact on local heroes when deriving net price actions for international retailers/buying groupsBe firm:Thoroughly prepare negotiations/red lines with int.retailers and stick to your planMake it stick:Ensure European net price management is supported by holistic governance structure(process

19、,incentive system,organizational anchoring,etc.)Tool as enabler:Develop a flexible and easy-to-use tool to manage European net prices and exposure over timeSimon-Kucher|European net price management|2024iStock/berya113European net price management7Our project approach|We jointly establish an improve

20、d European net price management along six stepsSource:Simon-KucherDefine requirements for long-term software solutionCSoftwareDefine leadership and governance(processes,organization and incentive scheme)BGovernanceEvaluate European net price exposure risk and trade termsA1TransparencyDevelop Europea

21、n net price approach incl.trade terms conceptA2ConceptDerive and prioritize net price increase actionsA3ActionsElaborate negotiation plans and prepare negotiationsA4Negotiation plansSimon-Kucher|European net price management|20248Source:Simon-KucherEvaluate yourself|Consumer goods manufacturers feel

22、 the pressure from intl retailer/buying groups but are not well preparediStock/DNY59Do you have transparency on the biggest exposure risk drivers among intl retailers and buying groups?Do you have a European net pricing approach which justifies explainable net price differences?Do you have clear red

23、 lines for the negotiation with intl retailers and buying groups and stick to them?Do you have a governance structure which supports net pricing decisions on a European level?Do you have a software solution which helps you to collect,analyze and monitor net prices?You should contact us if you answer

24、 one of these questions with No YesNoSimon-Kucher|European net price management|2024iStock/blackdovfx9Simon-Kucher|European net price management|2024Source:Simon-KucherCase studies|Previously conducted European net price management projects have generated significant profit impactNear-food manufactu

25、rerDevelopment of value-based pricing approach as guidance for individual countriesDevelopment of a European net price management concept supported by a tool to manage international pricing risksDetermine additional assortment measures to mitigate net price risks3Intl net price exposure mitigation+5

26、%pt.profit marginNear-food manufacturerElaboration of an international net price management concept incl.governance structureDefinition of requirements catalogue for a long-term software solution the preferred supplier Development of mitigation measures incl.valorization strategies to increase volum

27、e and profitEuropean net price steering+2%pt.profit margin30%risk reductionFood manufacturerEuropean net price optimization+17mprofit50%risk reductionRisk assessment from parallel trade and net price alignmentsIdentification of key pain points causing majority of alignment riskDefinition of mitigati

28、on measures via price increase initiatives combined with a consumer-centric value story12Additional value of Simon-Kucher:Proven approach with directly implementable resultsExperienced team of industry,country and subject experts Benchmarks we know what works in the market10Simon-Kucher|European net

29、 price management|2024Source:Simon-KucherYour Partner|Why we are the right partner for European Net PricingWe are a global consultancy with extensive consumer goods experienceWe are THE expert for European Net Price managementRecent project overview13Simon-Kucher overallWe are the best consultancy f

30、or Commercial Excellence2Financial TimesFinancial Times,list of the UKs Leading Management Consultants,silver category,2023ForbesForbes,survey of the best management consulting firms in the US,3-stars rating,2023brand eins/Statista brand eins/thema special edition Consultancies 2023,together with St

31、atista:Best Consultancies in Germany No.1,2023Across 11 industries and functional areas,Simon-Kucher was recognized by Forbes as one of the Worlds Best Management Consulting Firms for the second year in a row.Forbes,2023,together with Statista:list of the Worlds Best Management Consulting Firms,2023

32、What others sayOur Consumer Goods&Retail network350+experts 20 24successful European Net Pricing projects with major consumer goods players in recentmonthsNegotiation preparationHolistic net pricing conceptsEuropean PPA&trade terms optimizationOrganizational anchoring&governanceImplementation suppor

33、tSoftware solutionand much moreSub-topics addressed541m361105538199520002005201020152020202320224Revenue in 2023:541mEmployees:2,000Projects per year:1,500Revenue Your contacts at Simon-KucherFrancesco FioresePartnerConsumer Goods&Retail PracticeItalyTel:+39 02 289951 212francesco.fioresesimon-Jos E

34、elandPartnerConsumer Goods&Retail PracticeNetherlandsTel:+31 20 75312 37jos.eelandsimon-Tim BrzoskaSenior PartnerConsumer Goods&Retail PracticeGermanyTel:+49 173 538 1818 tim.brzoskasimon-Guillermo SagnierSenior PartnerConsumer Goods&Retail PracticeIberiaTel:+34 93 11808 22guillermo.sagniersimon-Martin CrepySenior Partner andGlobal Head of ConsumerConsumer Goods&Retail PracticeFranceTel:+33 1 5669 2370martin.crepysimon-And many more across our European and international network.