1、1 2009 NEGOTIATION Prepare, Lead and Follow-up negotiations MASS MARGIN X = SALES SIMPLE EQUATION Check out Cashier TG, Coolers Display Main promotion display Secondary display TG+ TG Podium Promotion Table On-shelf promotion Mini stand Auto walk Sidekick Pillar Cross Merchandising Only % Fix Fix or

2、 % FEES TRANSFER FOR ALL SUPPLIERS PROFITABLE GROWTH PARTNERSHIP SALES FOCUS OFFENSIVE 4 Priority on sales and CM Margin value increase o 2009 ambitious investments plan will accelerate sales growth o Accelerated Sales Growth will bring additionnal Mass of Margin Simplification of national contract

3、is required o Focus on % rebates is required o Negotiation strategy must be adapted to supplier cluster Good preparation is key for success o The preparation of negotiation will bring more professionalism in our demand o The application of training will allow us to better anticipate the suppliers re

4、actions Intro : Key points of the 2009 negotiation project 5 Identification of Supplier Cluster Profitability Sales Share PARTNERSHIP Identification of Supplier Cluster TOP 10 LIAONING - SUNDRY Global Scorecard Avg.CM% 25.63% Sales Participation Of Top 84.92% Sales Weight% CM% 1460 Sundry Global Sco

5、recard Avg.CM% 25.63% Sales Participation Of Top 84.92% R925 Hailin Beiwei N308 Weiduobao 000V SH Shiziwang G122 HRB Yushenghe O371 SD Zaohuaxiang 3971 DL Sanshandao 2351 DL Baijia P137 DL Xiongzhou ZYNB SY Hua Yi G231 DL Huanan 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% -5%0%5%10%15%20%25%30%35% Sal

6、es Weight% CM% 1460 Sundry 7 Supplier relations Strategy JBP : “Win Win” : Sales and Mass Target All initiatives focused on sales (VIP Items, specific promotion mechanism, shortages follow-up, etc.) Traditional Nego for improvement of “Back Margin” 2009 Nego approach / JBP is possible PROFITABLE GRO

7、WTH PARTNERSHIP SALES FOCUS OFFENSIVE . 8 NEGO CLUSTER 1 TG FEES TRANSFER + IMPROVEMENT OF BM PRIOR TO ANY SALES DEVELOPMENT DISCUSSIONS BASIC OFFENSIVE NEGO PROFITABLE GROWTH PARTNERSHIP SALES FOCUS OFFENSIVE 9 NEGO CLUSTER 2 Market share Carrefour support Negotiation Supplier Book Negotiating leve

8、rs: TG FEES TRANSFER IN % PROFITABLE GROWTH PARTNERSHIP SALES FOCUS OFFENSIVE Level of profitability Delivery Services COMPETITION between SUPPLIERS 10 NEGO CLUSTER 3 TG FEES TRANSFER + IMPROVEMENT OF CAT. PROFITABILITY MIX PROFITABLE GROWTH PARTNERSHIP SALES FOCUS OFFENSIVE 11 NEGO CLUSTER 4 STILL

9、NEGO BUT LESS TIME IN NEGO , MORE ON SALES FOCUS FOCUS ON SALES AND MASS MARGIN APPROACH 100 (CM of last year) Sales Growth FEES SYSTEM No impact of sales for more CM Value CM Value = 120 100 (LY) MASS MARGIN APPROACH CM Value coming from add. sales NEGO IN % NEED FOR MORE SALES TO GET MORE MASS MAR

10、GIN Focus on FEES NEGO NEGO % % Still Nego but in % Sales Growth 30 20 CM Value = 130 PROFITABLE GROWTH PARTNERSHIP SALES FOCUS OFFENSIVE 12 VALIDATION OF 2008 LANDING 13 Objective : Identify the basis of 2009 Negotiation Validation of 2008 Landing : clear base for 2009 Nego 25 2008 Purchases Landin

11、g forecasts Appending / TG Fees landing (the supplier speak first) 2009 Development plan of supplier : listen to supplier 25 Market evolution, trend, Market share objectives, innovations to come etc Business plan expected with Carrefour : assortment, DM, Purchase prices evol., etc 2009 Sales and pur

12、chases forecast ? Expectation 2009 Carrefour Strategy 10 Reminder of Total MASS margin approach, Fees transfer Expansion plan confirmation Real Nego will start during following meeting the week after 14 2009 CONTRACT REQUEST 15 Objective : Clear Request with justification Supplier makes its first pr

13、oposal 30 CRF raises and explain its request for 2009 business 30 Reminder of Carrefour Services excellence 2009 Purchases forecasts, big picture of potential business plan 2009 Operating costs increase /No other choice than increase of Unc. RB Reminder of Total MASS margin approach, Fees transfer P

14、oints agreed and to be further negotiated 30 16 Typical progression of a negotiation with a supplier Landing 08 validation + Supplier 2009 Business plan orientation Week 1 : Meeting 1 Terms proposals from supplier And CRF Counter- argument of the supplier W3 M3 Output Intensification of the position

15、 of Carrefour by new calculated arguments - Level of TG % transfered must be validated at this stage The supplier has to redefine a proposition Lead the negotiations W2 M2 Supplier revised proposition W4 M4 Output - Contract should be concluded at this stage Signing the contract OR Negative scenario

16、 3 4 17 Supplier Final proposal W6 M5 Output -Presentation of the FINAL proposition of the supplier - Contract conclusion OR - Implication of Top Management The Supplier leaves with a final compromise proposal Or T2T Meeting T2T Meetiing W7 M6 Output Conclusion of the agreement (contract) OR - SAP /

17、 NO CNY planification Signing the contract OR SAP Typical progression of a negotiation with a supplier Lead the negotiations 18 Conducting negotiations : Key sucess factors PREPARATION Being adequately prepared : - Having maximal knowledge of the supplier - Communicating coherently the key points of

18、 a file to the supplier Mastering Carrefour different levers - Preparing alternative scenarios (positive/negative) - Preparing a strategy with some compromise - Use efficiently the time by not waiting too long for supplier answers - Planning the next meeting at the end of previous one COMMUNICATION

19、Show strong determination and no room for hesitation Show confidence in Carrefour strategy Acting in a gentle, patient and smooth manner but with determination Have clear ideas when presented to supplier Good Listening to the other party (will give new nego ideas) Asking questions : learning about t

20、he supplier 19 NEGOTIATION SHEET China Merchandise Head Office 12 Faire Share coeff 584Value evolValue evolValue evol30% Schick7,566,931 17.19%8,701,971 15.00%10,000,000 14.92%38.82%Nego TargetGap Nego vs target 396,604,031 18.43%7,594,636 15.00%8,800,000 15.87%39.69%0.87%0.27% 117+2560PAD60PAD60PAD

21、 Value Remarks% in Purchase% in SalesValue Remarks% in Purchase% in SalesValue Remarks% in Purchase% in SalesValue Remarks% in Purchase% in Sales General Discount198,121 3.00%2.62%356,948 4.70%4.10%- 440,000 5.00%4.40%0.30% Common Assortment594,363 9.00%7.85%683,517 9.00%7.85%- 818,400 9.30%8.18%0.3

22、0% Data Exchange33,020 0.50%0.44%37,973 0.50%0.44%- 44,000 0.50%0.44%0.00% Brand & Market Dev.264,161 4.00%3.49%303,785 4.00%3.49%- 352,000 4.00%3.52%0.00% No Return- - - - 0.00% Others (to be defined)- - - - 0.00% COMMUNICATIONDM792,484 12.00%10.47%949,330 12.50%10.91%- 0.00%1,126,400 12.80%11.26%0

23、.30% Basic Display (TG)- - 0.00%- 0.00%396,000 4.50%3.96%4.50% Cashier Display- - - - 0.00% Special Display- - - 44,000 0.50%0.44%0.50% 1,882,149 28.50%24.87%2,331,553 30.70%26.79%- 0.00%0.00%3,176,800 36.10%31.77%5.40% COMMUNICATIONDM0.00%0.00%0.00%0.00%0.00%0.00%0.00% Basic Display (TG)214,706 3.2

24、5%2.84%326,569 4.30%3.75%0.00%0.00%0.00%0.00%-4.30% 100% Cashier Display0.00%0.00%0.00%0.00%0.00%0.00%0.00% Special Display0.00%0.00%0.00%0.00%0.00%0.00%0.00% 214,706 3.25%2.84%326,569 4.30%3.75%- 0.00%0.00%- 0.00%0.00%-4.30% 2,096,855 31.75%27.71%2,658,122 35.00%30.55%- 0.00%0.00%3,176,800 36.10%31

25、.77%1.10% 0.00% 0.00% 0.00% 0.00% 165,101 2.50%2.18%189,866 2.50%2.18%- 0.00%220,000 2.50%2.20%0.00% 2,261,956 34.25%29.89%2,847,988 37.50%32.73%- 0.00%0.00%3,396,800 38.60%33.97%1.10% 100,000 1.32%1.15%0.00%0.00%120,000 1.36%1.20%0.05% NEGO IMPROVEMENT 34.25%29.89%38.82%33.88%0.00%0.00%39.96%35.17%

26、1.15% 0.66% 1.95% Mass Margin Evol.20% Schick 3,516,800 (IV) APPENDING Dept: Holding/Supplier Code: Holding/Supplier Name: Number of Cities : Number of Stores : CONDITIONAL RB Net Purchase 5% 2007 Real2008 Landing2009 ForecastPrice Increase INFLATION 2009 Final (III) COND. RB ACTUAL UNC. RB STORE EX

27、CELLENCE Condition No.1 Condtion No.2 Condtion No.3 Condtion No.4 (I) SUB-TOTAL CONDITION - % COMMERCIAL MARGIN (BM+GM) CONTRACT TERMS (II) SUB-TOTAL CONDITION - Value RB - VALUE SUB-TOTAL RB WITH CONDITIONNAL (I+II+III) SUB-TOTAL RB W/O CONDITIONNAL (I+II) BACK MARGIN (BM) (I+II+III+IV) STORE EXCEL

28、LENCE GROSS MARGIN (GM) RB - % - 2,947,988 46.72% 2,261,956 3,233,640 42.73%4,065,425 971,684 12.84%1,117,437 0.00%48.67%4,866,800 12.84% - 0.00%1,350,000 13.50% TG Fee Transfer 2009 National Holding Negotiation Preparation 2007 Real BM before Price increase BM with Fair Share coeff 2008 Landing2009

29、 Request Improvement vs 2008 Real Net Sales Payment terms UPDATED GUARANTEED NON G. 20 THE NET NET PURCHASE APPROACH 21 Price Increase Renegotiation 10% BM 9% BM WHICH RETAILER IS MORE PROFITABLE FOR P&G ? 22 Price Increase Renegotiation 10% BM 9% BM WHICH RETAILER IS MORE PROFITABLE FOR P&G ? NPP =

30、 10 NPP = 9 23 Price Increase Renegotiation 10% BM 9.00 RMB 8.19 RMB NET NPP NET NPP 9% BM Margin value = 1.0 Margin value = 0.81 NPP = 10 NPP = 9 24 Price Increase Renegotiation IMPACT OF PRICE INCREASE ON OUR PROFITABILITY 10% BM Price Increase : +10% NPP = 10 New NPP = 11 11% BM = +1pt Margin val

31、ue = 1.0 Margin value = 1.21 WHO GETS MORE VALUE FROM PRICE INCREASE ? 25 Price Increase Renegotiation IMPACT OF PRICE INCREASE ON OUR PROFITABILITY 10% BM 9.00 RMB Price Increase : +10% NPP = 10 New NPP = 11 NET NPP 11% Margin value = 1.0 Margin value = 1.21 BM = +1pt 26 Price Increase Renegotiatio

32、n IMPACT OF PRICE INCREASE ON OUR PROFITABILITY 10% BM 9.00 RMB Price Increase : +10% NPP = 10 New NPP = 11 9.79 RMB NET NPP New NET NPP REAL VALUE SHARING 11% 0.21 0.79 Carrefour Supplier Margin value = 1.0 Margin value = 1.21 BM = +1pt 27 Price Increase Renegotiation WITH A FAIR SHARE of 50% OF VA

33、LUE CREATED 10% BM 9.00 RMB Price Increase : +10% NPP = 10 New NPP = 11 9.50 RMB NET NPP New NET NPP REAL VALUE SHARING 13.6% New BM= +3.6 pt 0.5 0.5 Carrefour Supplier Margin value = 1.0 Margin value = 1.50 2009 NEGOTIATIONS POTENTIAL % Price increase : +6% Share 50% +3.00% Paper increase : +20% Op

34、erating cost/m2:+10% General Discount Cost= 0.50% +1.50% Cost= 1.00% 29 Conclusions Success of our negotiations is linked to : Good preparation Efficient timing Competition among suppliers Mass Margin approach is not only a commitment for Sale growth from Carrefour but also for Profitability growth from the Suppliers Keep in mind the key message of our President to the suppliers : “ We want the same :Sales and Profitability”