Breakthrough SMB -- December 2005

This year's Breakthrough SMB award pays homage to The Meow Mix Company, a mid-market firm that truly recognizes trade efficiency as being extremely critical for a mid-sized company in an extremely competitive category. "Being a small/medium size business shouldn't be an excuse for not having a trade system.

To the contrary, it's the very reason you need one!," says John Kittle, director of Trade Planning and Category Development, Meow Mix. "We need to insure our trade spend is effective at delivering competitive promoted price points and merchandising activity agreed to by our customers during the appropriate time period."

A Categorical Challenge
The Meow Mix Company is the maker of Meow Mix branded cat food. In July 2005, the company launched its line of wet cat food varieties that includes Hook, Line and Sinker; What's the Catch?; Upstream Dream; Deep Sea Delight; among others. The company also manufactures and markets Alley Cat brand dry cat food. Both are leaders in their segments of the dry cat food category.

Since its inception in 2002, Meow Mix used a cumbersome Excel-based planning tool to manage its trade spend while searching for an in-expensive but effective alternative. Using the homegrown system, "the biggest issue we had was that as plans changed, there was no easy way to adjust and re-roll the forecast," says Kittle. "Worse yet, planned liability was often 'left on the table' instead of being freed up to fund another customer event."

In addition, the Customer Service department relied on an extremely manual process to ensure customer pricing reflected the agreed upon allowances. If an allowance was inadvertently overlooked, it would result in an unexpected deduction. Often these deductions occurred several months after the program ran, placing Meow Mix at risk to overspend its trade budget in that customer.

A Winning Combination
Following an exhaustive evaluation of half a dozen trade promotion systems, Meow Mix challenged VeriSync to deliver a fully functioning planning platform. VeriSync's TradeLync, an ASP version of the MEI Trade Management Solution, was up and running in 60 days and allowed Meow Mix to import retailer consumption data provided by Information Resources Inc. to compare shipments to consumption, understand inventory positions in customers and determine how much of the volume sold on promotion was truly incremental. Although Meow Mix was previously able to access this data in separate applications, including it within the new TPM solution allows the sales organization to easily access the information while developing future promotional plans.

"Since the new planning system was implemented, our promotional efficiency has increased from 30 percent to 41 percent," reports Kittle. "We're able to more effectively execute planned trade programs, and liability is actualized automatically throughout the promotion period, instead of requiring a manual process of matching planned volume with actual shipments following each event."

As a mid-market firm, Meow Mix proves that you don't need to be a consumer goods giant in order to make a trade spend system work to your advantage.
"By having a handle on our liability, and re-deploying unused funds, we're actually able to offer more promotional support to our customers," says Kittle.