1. Mike Baiocchi DAZ Systems, Inc. Implementation and Approach Trade Management mike.baiocchi@dazsi.com (714 360-0215)

2. DAZ Systems, Inc. www.dazsi.com Focus on Success Through Expertise and Experience Providing rapid, cost effective solutions:  Oracle Apps E-Business Suite (ERP, CRM, WMS)  Upgrades of E-Business Suite  Trade Management  Data Warehouse/Data Mart  Custom Development (interfaces, integration to disparate systems, web front ends, new software)

3. Overview Issues to Solve What do we hear? / Case Studies / What we learned! Implementation Challenges Specific Functions: Budgets Trade Planning Claims Indirect Sales Q & A Agenda

4.  Target Characteristics: – Co-Operative advertising driven – Iterative selling driven – In need of claim and deduction management  These include: – CPG – High Tech – Life Sciences and Pharmaceutical – Manufacturing and Distribution – ANY Company with a Claim / Deduction Problem Who should be interested?

5. OVERVIEW - INCREASING TFM COST CONTINUES TO BE A CONCERN  The estimated cost of trade promotions for US consumer goods manufacturers is $26 billion per year, or 13% of sales revenues– second only to COGS as leading expense  61% of a consumer product goods company’s marketing budget is spent on trade promotion funneled through retailers Sources: Gartner Group, Cannondale Associates Trade fund spend is increasing at a faster rate than sales! Marginal Increase in Trade Fund Spend Marginal Increase in Revenue

6. ISSUES TO SOLVE NONPRODUCTIVE SPENDING  Distributors: - 84% do not believe they are getting a fair ROI for their trade dollars - There is a 50% variance between actual and planned results Sources: Gartner Group, Cannondale Associates Inefficiency Ineffectiveness Non Productive Spend

7. ISSUES TO SOLVE LACK OF CONTROLS – Compliance Concerns The historical “looseness” in contract negotiations between distributors and retailers brings the Sarbanes-Oxley act into clear focus – Increasing Deductions Retailers are increasingly deducting from vendor payments. Inefficiency Ineffectiveness Competition Regulatory

8.  Compliance Requirements  Profit Maximization  Know What Works, How Well it Works, to Replicate Success What do we hear? Why Marketing Expense Management?

9. What do we see/hear from companies? Case Study 1  Distributor of Hair Care Appliances – Revenue: $800M - $1B – Sells to: Major Retailers / Discount Chains – Operation: Global  Issues – 27 (TWENTY SEVEN!) Sets of Books – SOX Compliance – Claims / Deductions & Tracking – Billbacks – Returns Allowances

10. Distributor of Hair Care Appliances – con’t  Results: – SOX Compliance – 1.2% Initial Decrease in Promo Expense – Increased Customer Satisfaction – Increased Market Share

11. What do we see/hear from companies? Case Study 2  Distributor of Consumer Electronics Products – Revenue: $800M - $1B – Sells to: Major Retailers / Discount Chains / Office Supply Chains / E Commerce – Operation: Global  Issues – Lack of Central Control Point - SOX Compliance – Sell Through Feedback Loop / Verification – “Over & Above” Promotions – Price Protection - SOX Compliance

12. Distributor of Consumer Electronics Products – con’t  Results – Containment of Sales/Marketing “Creativity” – 98% Control of Promotion Process (Replaced Excel) – Decreased Expense via Sell Through Verification – SOX & GAAP Compliance

13. What we learned!  Regulations being seriously enforced  Shareholders are more demanding  Competition is fierce  Days of creative marketing and no serious tracking are over! The Current Perspective :

14. IMPLEMENTATION CHALLENGES Transformation vs. Technology– Software doesn’t solve the problem! Software is a tool!  Process – lack of standardization in process and trade fund terms drives ‘ad-hoc’ approach and increases complexity to manage  Technology – fragmented technology cannot support data and system integration requirements  Organizational – individuals within your organizations are comfortable with traditional approach – no incentive to change  Cultural – belief that art, experience, and ‘gut feel’ cannot be replaced by tools  Partner expectations – increasing retailer leverage and competition drives increasing expectation for trade fund support

15. Oracle Integration Points Trade Management publishes business events based on sales forecasts created by sales users. Such forecasts can be inputs into the Demand Planning application to impact demand plans. Demand Planning Budget, offer, claim, indirect sales, product use the product definitions Inventory Getting Cost of Good Sold for Offer ROI Calculator Costing Claim settlement by check Payables Deduction and overpayment claim creation Claim settlement by credit, debit, write-off, others Receivables Postings for accruals and/or expenses General Ledger Execution of offers Update of accruals and expenses in Budget Claim settlement by RMA Order Management Supported FunctionalityOracle Product Offers Price Lists (for Chargeback solution) Advanced Pricing

16. Oracle Integration Points Estimating taxes of transactions generated by claims Tax Engine Customer Buying Group Trading Community Architecture POS data management Data Quality Management Territory Management, Task, Note, Attachment, Calendar, Resources CRM Foundation Offers can source from marketing campaigns Marketing uses some limited functionalities of Budget and Offer Trade Management and Marketing share basic common administrative setups Marketing Special Pricing Request (Ship & Debit) Partner Fund Management Lead Referral Compensation Partner Management Supported FunctionalityOracle Product Indirect Sales Data Import WebADI EDI 844 and 867 Inbound; EDI 849 Outbound XML Gateway

17. Other Integration Points Business events Demand Planning, Costing or any other systems Third party sales import program Order Management Accounting entry interface table General Ledger Claim / Deduction creation API Claim assignment API Configurable settlement workflow Receivable or Payables Support provided by Trade ManagementThird Party Systems Budget creation API Budget Planning Tools

18. Sales Force Automation – Trade Management is a Sales Application for “iterative sales” products – Difference between Trade Management & Oracle Sales? Lead and Opportunity Based Iterative Selling Model High Tech, Financial Service, Telecommunications, Transportation CPG, Life Science / Pharma, High Tech Industry Focus Examples Business Flow Examples “Sales” Apps Promotion Analysis to Execution Deduction Creation to Settlement Third Party Accrual POS / Chargeback Processing Oracle Trade Management Campaign to Lead Lead to Opportunity Opportunity to Quote Quote to Order Oracle Sales

19. Complete Promotion Solution Trade Management is a Complete Promotion Solution Plan Execute Monitor Analyze Settle Execute Create offer Validate eligibility Price sales orders Calculate accruals and discounts Plan Set sales quota / target Create budget for customer / product Set budget thresholds Allocate to sales hierarchy Create account plan Analyze Analyze historical sales Forecast sales volume Calculate forecast ROI Review prior activities Monitor Capture POS data Update checkbooks / General Ledger Calculate actual ROI Verify field activities Settle Create check / credit Manage claims / deductions

20. Key Differentiators:  Integrations – Financials, Supply Chain  Comprehensive Promotion Types  Accrual Management and GL Integration  Flexible and Retroactive Adjustments  Indirect Sales Management  Deduction Management  Lockbox Integration  Customer 360 View  Robust Customer Relationship / Buying Group Support

21. Budget Functions  Creation – Fixed – Fully accrued with multiple parameters  Allocation – Top-down allocation along a territory hierarchy – Allocation based on prior year sales – Bottom-up submission  Validation – Budget-offer validation Planning Execution Tracking

22. Budget Functions (continued)  Sourcing – Request funds – Transfer funds  Monitoring Usage – Threshold alerts – Recalculated committed  Reconciliation – Reconcile committed but not earned – Reconcile earned but not paid Planning Execution Tracking

23. Budget Functions (continued)  Accruals Management – Integration of all ordering channels – General Ledger integration – Account Generator workflow – Manual adjustments – Retroactive offer adjustments – Spread lump sum offer postings – Scan data offer accruals and adjustments – Volume offer accruals and AP updates – Third party accrual API with AP simulations Planning Execution Tracking

24. Trade Planning Functions Account Manager Dashboard Creation of offers including lump sum, off invoice, accrual, promotional goods, order value, terms upgrade, scan data, volume and accrual Volume forecasting based on historical sales data Manufacturer’s ROI based on forecast volume and cost of goods sold, calculate forecast ROI Analysis/ Planning Execution Tracking

25. Trade Planning Functions (continued)  Advanced Pricing Integration – All offer information passed directly to Advanced Pricing – Uptake of Attribute Manager – Multiple currency price lists  Integration with All Ordering Channels – Offers automatically or manually applied to orders – Both hard and soft promotional limits Analysis/ Planning Execution Tracking

26. Trade Planning Functions (continued)  Performance Monitoring  Actual ROI – Based on actual sales data and cost of goods sold, calculate actual ROI  Views – Budget view – Customer view Analysis/ Planning Execution Tracking

27. Claim and Deduction Functions  Creation – Deductions and overpayments created in Oracle Receivables – Claims and debit claims created in Trade Management – Mass create claims – API and claims import  Assignment – Claim territories, teams, and API Creation/ Assignment Research Settlement

28. Claim and Deduction Functions (continued)  Task Management – Tasks – Action template defaults based on reasons  Audit Trails – Source – History based on rules – Attachments and notes Classification Research Settlement

29. Claim and Deduction Functions (continued)  Discoverer – Customizable – Claim business area provides information on all customer transactions  Associate Earnings – View all customer earnings available for claims – Search for customer earnings using multiple criteria such as transactions and products – Buying group support Classification Research Settlement

30. Claim and Deduction Functions (continued)  Claim Aging View – Configurable aging buckets – Grouped by customer  Claim Details – Split claims – Related documents – Duplicate claims – Others Classification Research Settlement

31. Claim and Deduction Functions (continued)  Oracle Receivables Integration – Auto resolution – Deductions from Oracle Receivables are passed automatically to TM with owners assigned. – Automatic settlement by credit or debit memo.  Oracle Payables Integration – Automatically create invoices for check payments  Order Management Integration – Automatic creation of RMAs – Access to discounts and order history to validate claims. Classification Research Settlement

32. Claim and Deduction Functions (continued)  Autopay  Accruals Management – General Ledger integration – Account generator workflow – Scan data offer accrual adjustments  Configurable Settlement Workflow – Claim settlement workflow allows companies to customize their own, easy to maintain, functions Classification Research Settlement

33. Indirect Sales Functions  Import – WebADI – XML Gateway (EDI 844, 867, 849) – Direct SQL load into interface Import Processing Settlement

34. Indirect Sales Functions (continued)  Processing – Basic data completeness check – Mapping of external to internal data – DQM integration – Chargeback validations – Special pricing validations – Dispute reconciliation – Send to 3 rd Party Accrual Engine for further processing – Send to Inventory Tracking for tracking Import Processing Settlement

35. Indirect Sales Functions (continued)  Mapping of external to internal data: – Price List – End Customer – UOM – Item  DQM integration – Party – Party Site – Party Contact Import Processing Settlement

36. Indirect Sales Functions (continued)  Chargeback validations – Price List number – Effective dates – End Customer/Buying Group eligibility – Product/Category eligibility – Inventory – WAC – QP Attribute configuration: Seller Import Processing Settlement

37. Indirect Sales Functions (continued)  Special Pricing validations – Special Pricing number – Effective dates – Quantity – Price – Product – Customer Import Processing Settlement

38. Indirect Sales Functions (continued)  Dispute reconciliation – Automatic assignment of dispute code – Ability to update dispute code on screen – Ability to update data disputed and re- process – Re-submission of disputed lines Import Processing Settlement

39. Indirect Sales Functions (continued)  3 rd Party Accrual: – Indirect sales data can be sent to the 3 rd party accrual engine for processing automatically or manually. – 3 rd party accrual runs a pricing simulation and applies all promotions eligible on indirect sales data, payment can be for distributor or end customer. It also finds a price difference to be accrued. Import Processing Settlement

40. Indirect Sales Functions (continued)  Inventory Tracking – Distributor inventory is tracked automatically based on a System Parameters option. – Inventory In = OM data – Inventory Out = TM indirect sales data – Adjustments = made in TM Import Processing Settlement

41. Indirect Sales Functions (continued)  Settlement – Payment by Check or Credit – Using Autopay – Option to deplete upfront accrual or create new Import Processing Settlement

42. In Summary: Trade Management SalesCustomersMarketing Sarbanes - Oxley Good Business Practices GAAPGAAP GAAPGAAP

43. Q & A