1. Trade Round Table Magazinul Progresiv 20 October 2005 Martina Kastler

2. Our mission Add Vitality to Life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. Unilever co-operates within the ECR movement with trade partners around the world. We believe in constructive co-operation to the benefit of the consumer. Unilever Romania established in 1995. We are marketing and producing Home & Personal care brands (Dero, Dove, Domestos, Cif, Rexona) and Food brands (Delma, Rama, Knorr, Delikat)

3. A new beginning: ECR Romania An Association of Industry and Trade Established 15th June 2005 Members to date: Supported by GS1 Romania (former EAN) Co-Chairmanship: Metro (Trade), Unilever (Industry) INDUSTRY UNILEVER SOUTH CENTRAL EUROPE NESTLE ROMANIA KRAFT FOODS ROMANIA PROCTER & GAMBLE MARKETING HOCHLAND ROMANIA DOBROGEA SA HENKEL ROMANIA BRAU UNION ROMANIA BIC (ROMANIA) MARKETING DISTRIBUTION PHILIP MORRIS ROMANIA FRIESLAND-NAPOLACT RETAIL TRADE METRO CASH & CARRY ROMANIA SELGROS CASH & CARRY BILLA ROMANIA PRAKTIKER ROMANIA KAUFLAND ROMANIA ARTIMA RODIPET

4. What is the category? What is the category structure? How important is this category for us? What do we want to achieve with this category? How do we measure category succes? What are the strategies that we will use to ensure succes? What are the tactics (pricing, promotions, assortment and shelf) to follow the strategy? Where and how will we implement the category plan? Example: 8 step Category Management 1 Category Role 2 Category Assessment 3 Category Performance Measures 4 Category Strategies 5 Category Tactics 6 Plan Implementation 7 Category Review 8 Category Definition How does the shopper behave when buying this category? What is the competitor‘s status on the category?

5. ECR Vision Trade and Industry Working Together to Fulfil Consumer Wishes Better, Faster & at Less Cost

6. ECR History Originated in the 1980s in USA Leading retailers (i.e. Wal Mart) started co-operation with industry to improve Customer Service at reduced costs Establishment of ECR Europe in 1995 at Geneva Conference 1st July 2005 ECR Romania accepted as member of ECR Europe

7. ECR Europe National Initiatives ECR AustriaECR Austria ECR BelgiumECR Belgium ECR Brazil ECR Czech Republic/Slovakia ECR Denmark ECR Finland ECR France ECR Germany ECR Greece ECR Hungary ECR IcelandECR Iceland ECR Ireland ECR Ireland ECR Italy ECR Netherlands ECR Norway ECR PolandECR Poland ECR Portugal ECR Portugal ECR Russia ECR South Africa ECR SpainECR Spain ECR Sweden ECR Sweden ECR Switzerland ECR Turkey ECR United Kingdom ECR Romania

8. Changing Market Environment An increasingly Demanding Consumer Choice Service Convenience Quality Freshness Safety An increasingly Costly Supply Chain Assortment Pack sizes Shelf Presentation Product Descriptors Chilled Logistics Traceability

9. ECR Ways of working New relationship between Industry and Trade From Confrontation to Co-operation Breaking down non-productive barriers to better serve the consumer Overcome: Supply Chain Inefficiencies Non effective planning tools Inappropriate information along the Value Chain

10. ECR Europe Work over time 1994 ”Co-operation to fulfil consumer wishes better.... 2000.......to improve margins and competitiveness of all business partners, industry and retail, along the value chain... 2004......and to provide a sustainable platform enabling all business partners to cope with new entrepreneurial (market) challenges”

11. ECR Vision Trade and Industry Working Together to Fulfil Consumer Wishes Better, Faster & at Less Cost with a Shared Business Process leading to Shared Benefits across the Value Chain

12. ECR Pyramid Consumer Relationship Management Category Management Efficient Assortment Efficient Product introduction Efficient Promotion Efficient Replenishment Information Management No Out of Stocks at efficient cost Satisfied Shopper Sufficient to work Attractive POS Well chosen Promotions Well defined, assorted Category presentation

13. ECR Pyramide Demand Side Supply Side Efficient Replenisment Information Management Consumer Relationship Management Category Management Efficient Assortment Efficient Product introduction Efficient Promotion Processes Standards CRP, VMI, Cross Docking, EAN 128, EUL Efficient Replenisment EDI, Internet, Master Data, Identification Information Management

14. ECR Demand Side “To Fulfil Consumer Wishes Better, Faster & at Less Cost” Understand consumer wishes and define shopper requirements Define product categories from a consumer/shopper point of view Combine and sell category assortments customised for target group and shop  ECR has developed standardised processes and generally accepted definitions and parameters to support Trade and Industry.

15. Brand Loyalty „product-branding“ Consumer LoyaltyShopper Loyalty CRM Industry Example: CRM Example: Consumer Relationship Management Trade Shop Loyalty „store-branding“

16. CRM: Focus on the individual shopper and shopper groups. Specific offers to the target group. - „Individual offers“ to shoppers - „Data warehouse“/Loyalty cards personalised: 1 for 1 - Marketing targets the most attractive and valuable groups - Data management important segmented: 1 for some - Mass marketing with limited effect standardized: 1 for all CRM: Shopper Differentiation

17. ECR Supply side “To Fulfil Consumer Wishes Better, Faster & at Less Cost” Optimise physical flow of goods from supplier warehouse to shelf Co-ordinate data - and information flow Co-operate to identify cost saving potential  ECR has developed standardised processes and commonly agreed identification and parameters to: - Reduce stocks - Optimise transport capacity - Reduce workload - Ensure On Shelf Availability

18. Example Supply Side: VMI Vendor Management Inventory is a process when both Industry and Trade agree to share the data (sales and stocks) to create common KPI for replenisment Unilever and Metro have started this process last year Based on KPI established by Metro the order is now done by Unilever  Simplification for the department manager  Improving the quality of the order (we have to manage 150 articles in Detergents and Cosmetics vs. 2000 articles in the category for Metro)  The stock days have been reduced by 7 days

19. ECR: POS Data exchange Demand side Combining knowledge of POS Data (Shopper) and Market Research (Consumer) provides better decision base Monitoring and Analysing agreed KPI accelerates learning curve Systematic measurement of OSA prevents out of stock and increases consumer/shopper satisfaction Supply side Reduction of logistic costs and stocks Improved service level, less OoS Cost savings in planning and ordering Less write-offs for residuals, obsoletes and expired goods

20. ECR standards - available already Consumer Relationship Management Category Management Day To Day Category Management Web Enabled Category Management Category Management Online Retailing Efficient Promotions, Efficient Assortment Efficient Product Introduction Consumer Enthusiasm Promotion Analysis POS Data Exchange & Management Collaborative Planning Forecasting & Replenishment Efficient Replenishment Continuous Replenishment Vendor Managed Inventory Cross Docking I & II EAN 128 Optimal Shelf Availability Shrinkage / Stock-Loss Track & Trace of Goods Recall of Goods RFID in the Supply Chain 22+9+5+6+ Global Trade Item Number Global Location Number Reduced Space Symbology EAN 128 / SSCC Composit EAN Barcode Radio Frequency Identification UPC Electronic Product Code Digital Signature etc. EANCOM Messages / EDI GCI/EAN-XML Master Data Alignement Automated Data Capture Global Product Classification Efficient Unit Loads EAN 128 Palette Standards for Containers Beverage Boxes etc. ProcessesIdentificationCommunication Logistics ECR Standards - available already

21. ECR Results in Europe Trade and Industry together realised the following - Savings Supply Chain 1995 – 2005:3,6% of total cost = Eur. 18 bn. - Increased Customer Service Level 1995–2005: + 5,7% - Reduction of stocks10 days - Reduction of out of stock:- 4,9% of total inventory Source: ECR EuropeCase Study

22. ECR Experience ECR has helped to fulfill consumer wishes better

23. ECR Pyramide Demand Side Supply Side Efficient Replenisment Information Management Consumer Relationship Management Category Management Efficient Assortment Efficient Product introduction Efficient Promotion Processes Standards CRP, VMI, Cross Docking, EAN 128, EUL Efficient Replenisment Identification (EAN), Electronic Data Exchange (EDI, Internet), Master Data Management Information Management

24. ECR Universe Business Model Co-operation Trade & Industry Common Values and Principles Consumer is Focus Enablers: Standards Processes Best Practice Methodologies Tools Network: Companies and Associations Implementation and Experience Communication Platform ECR

25. ECR Culture Shared Values and Principles Trust Honesty + Openess ECR

26. ECR Romania: Main Tasks Embrace the ECR culture Come together to define common priorities between Trade and Industry to better serve the consumer Use available ECR Europe description of processes and international identification standards Establish common understanding and language Develop, adapt, test Teach, Train, Disseminate Information Work in project groups and share learnings

27. Invitation “Working together - building business” Join ECR Romania! www.ecr-romania.ro Telephone: +4(021)3178031/2/3

28. Thank you!