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Post by onoudidint on Sept 11, 2012 6:33:59 GMT -5
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Post by onoudidint on Sept 11, 2012 6:36:18 GMT -5
hmmmmm !
Circular Logic
Six steps to drive advertising production effectiveness and efficiency
Foot traffic drives sales. And, for many retailers, circulars drive foot traffic. But designing, producing, and distributing millions of circulars across the country can be costly—and the effort can sometimes consume as much as half of the total company marketing budget. But it doesn’t have to be this way.
By implementing a targeted, fact-based approach, retailers can reduce the cost of paperbased circular campaigns by 20-30% and reduce time-to-market by more than a third—all without any degradation in effectiveness.
This can be achieved by following six key steps:
1. Dissect the process and create bottom-up cost baseline
Profiling the cost baseline is the first critical step in assessing the efficiency of the ad production process and identifying optimization opportunities. Typically, the ad production process comprises three pieces: 1) ad circular layout and design, 2) production, and 3) insertion and distribution. While the design stage is usually done internally, both circular production and insertion/distribution are typically handled by third-party vendors and, together, typically represent 80-90% of the total cost baseline.
Because the process generally includes different third-party vendors (printing houses, integrators, distributors, newspapers), costs are separated in multiple cost centers (marketing, category management, IT, etc.), which can make building the cost baseline challenging. But it must be done in the most comprehensive and accurate way possible to provide transparency and insight into the key levers to prioritize.
2. Understand circular production cost structure and develop ‘should cost’ perspective
Circular production typically uses offset printing because it enables high quality, high run, and speed printing (up to 50K prints per hour per machine). The major cost driver in the process is its key input material (paper), accounting for about 60% of the total cost structure. With labor and other variable cost (energy, ink) representing about 35% of the cost, printing houses’ margins are typically in the low single digits (3-5%).
Understanding the process and the cost structure of the different options (coldset vs. heatset, or digital printing) may enable retailers to know how much each component of the process “should cost” and therefore better identify potential opportunities for efficiency.
3. Monitor paper price trends and minimize cost increases
Paper is a highly volatile commodity, and its price directly affects circular production cost. In the past two years, the RISI index for 50-pound offset rolls increased 7% from April 2010 through June 2011, but it declined 4% after that.
During the same time, we have seen the circular cost increasing by the same amount (7%) but not decreasing when the price of paper was declining. Although retailers are not typically commodity-hedging experts, understanding these price movements can make all the difference in strategy. In some cases, retailers can leverage trilateral negotiations, including the paper mill counterpart, or even index the circular cost to paper price.
When commercial levers to reduce paper price have been exhausted, retailers can resort to technical levers to minimize the impact of paper cost. Marginally revising format sizes to reduce the quantity of paper used could yield savings of 2-4% and is hardly noticeable by customers. Lowering paper density can also reduce paper cost significantly. Despite some reluctance, especially among the higher-end retailers, to embrace lower density paper, we have observed a clear trend towards newsprint even for thoseretailers that were most resistant to change (e.g., consumer electronics).
4. Optimize circular format and select supplier most suitable for selected formats
The cost of a circular depends in part upon on how well the format is optimized for the size and type of the printing press that is used by each specific printing vendor. Retailers often select the printing house that is the most suitable for their average format, even though that facility may not be optimal for each and every format. As a result, a retailer may end up overpaying by 3-5% for those suboptimal formats.
Selecting which and how many printing houses are most suitable for the required formats thus becomes a critical component in the circular procurement strategy. Using a printing integrator eliminates the need to coordinate with multiple suppliers and can help save a significant amount of time and resources, but integrator margins must be appropriately negotiated.
5. Perform version rationalization
While circular version proliferation has helped retailers tailor their promotions to different markets and better respond to competitive local offerings, it has also created added complexity, increased circular cost, and slowed speed to market. As a result, it’s critical to review all versions and perform a detailed ROI analysis. Understanding the cost, sales, and margin lift of each version is instrumental in deciding which deserve to “live” and which should be reduced or eliminated.
Our analysis of thousands of circulars for dozens of retailers and other companies reveals that 40-50% of versions have negligible or negative returns and can be candidates for elimination.
6. Consider outsourcing of non-core activities (circular design)
Many retailers still maintain the leaflet design functionality in-house primarily because they believe it’s the more flexible option. However, with the right partner, outsourcing this function can be another way to reduce overall cost and decrease the time-to-market significantly.
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Post by onoudidint on Sept 11, 2012 6:37:19 GMT -5
doesnt kodak have something to do with printing ?
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Post by onoudidint on Sept 11, 2012 6:38:46 GMT -5
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Post by onoudidint on Sept 11, 2012 6:43:00 GMT -5
Bankruptcy & Restructuring Plan of Reorganization Value – Bankruptcy Strategy and Negotiation On behalf of the board of directors, AlixPartners valuation team was engaged to provide a comprehensive, global analysis of a major automotive OEM in connection with the assessment of the sale of its assets under Section 363 of the U.S. bankruptcy code. In short order and working with OEM employees and the company’s multiple advisors around the world, AlixPartners assessed the going concern value of core foreign operations, joint ventures and stakes in a myriad of other ancillary businesses and also deter¬mined the value, on a liquidation basis, of the company’s North American business and other diverse assets. The board ultimately decided to pursue the sale and the new entity subsequently emerged from Chapter 11 with a supportable capital structure and improved operations.
Mergers, Acquisitions & Divestitures Case Studies Determining Value in an M&A Environment AlixPartners assisted a Midwestern manufacturer in negotiating its potential sale to a public company. The company operated as an ESOP, thereby adding additional complexity to its structure and value determination in an M&A environment. Our role included assessing the value of the company under numerous scenarios, negotiating with the potential buyer, providing management and the board of directors with strategic and financial advice, assisting in determining the optimal structure and consideration of the deal and standing ready to support the transaction for regulatory purposes.
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Post by onoudidint on Sept 11, 2012 6:44:02 GMT -5
Tax Valuation Case Studies IRS Negotiations AlixPartners was retained to assist a multi-national taxpayer in its negotiations with the Internal Revenue Service regarding the value of certain intangible assets transferred between U.S. and foreign subsidiaries. We provided a detailed valuation analysis and prepared a rebuttal report analyzing the IRS’ economist’s position. AlixPartners met with representatives of the IRS to present our valuation analysis and our critique of the economist’s position.
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Post by onoudidint on Sept 11, 2012 6:44:32 GMT -5
what it mean , what it mean
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