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ECR TO MOVE FORWARD ON NEW FRONTS

CHICAGO -- The Efficient Consumer Response agenda will shift next year to focus more on in-store and consumer issues, according to plans hashed out by the ECR Operating and Executive Committees.The next wave of proposed ECR initiatives will delve into areas such as customer service, promotion effectiveness and product launches, said Jack Haedicke, vice president of activity-based costing at Kraft

CHICAGO -- The Efficient Consumer Response agenda will shift next year to focus more on in-store and consumer issues, according to plans hashed out by the ECR Operating and Executive Committees.

The next wave of proposed ECR initiatives will delve into areas such as customer service, promotion effectiveness and product launches, said Jack Haedicke, vice president of activity-based costing at Kraft Foods, Northfield, Ill., and co-chairman of the ECR Operating Committee.

Haedicke spoke with SN following two days of closed-door meetings of the ECR Operating and Executive Committees here the last week in October. Among the new programs that will, if enacted, form a large part of future ECR work:

Efficient Store Practices: An ECR program will be developed to look at specific practices that could play a key role in improving store-level efficiency, both from the operations and customer satisfaction standpoints.

"This will involve things like store-ready packaging, consistent standard module designs, and trying to enhance the efficiency of the checkout process," Haedicke said.

Efficient Product Introductions: Part of the new ECR agenda will be to re-examine the issue of new product launches with a goal of providing a case history template for success in this area. The objective is also to set the

record straight about new product success and failure rates in the industry. "There are some horribly bad data out there about the success of new product introductions that have become gospel in the industry. We've all heard the number: out of 20,000 new product introductions, 100 survive more than a year. Everyone agreed that is a seriously flawed number," Haedicke said.

"The first step is to get some realistic data, which I think is available. The second step is to develop the keys for successful new product introductions and present some case studies," he said.

Antitrust issues, which stymied ECR work on product introductions in the past, will be less of a problem with the new focus, according to Haedicke. "We're going to have to work through any antitrust issues, but the lawyers didn't have a problem with [this area] the way we defined it. The way we posed this is that there's bad data out there and we need some history on what has worked and what hasn't."

Efficient Promotions: Emphasis will shift from exploring the sensitive issue of promotional funds to analyzing various forms of in-store promotions, such as point-of-purchase programs, endcap displays and other strategies.

"An interesting twist that we may be looking into is efficient promotions not so much associated with deal funds but with the effectiveness of different types of promotions within the stores. That is a subtle but big difference," Haedicke said.

Another area of work will involve "getting to consistent category definitions, perhaps even at the granular level, with the cooperation of Nielsen and IRI" so that everyone can be talking about the same things, he said.

The ECR agenda will also include completing unfinished business and moving forward with newly launched programs, such as developing scorecards, releasing compact disc-read only memory versions of the best practices reports and spearheading educational conferences and events.

The next step in the process involves the ECR Operating Committee drawing up "action plans" for each of the proposed programs and then presenting them to the Executive Committee for final approval. That will take place just before the Joint Industry ECR Conference next March.

"There are time frames proposed on all of these programs and consultants lined up to do them, but I can't come forward with the specifics until we get the action plans to the Executive Committee," Haedicke said.

All the new programs are scheduled to be completed, with information on the project findings available, by the end of 1996, he added.

By far, the most important aspects of the new programs being considered is the focus on in-store and consumer issues, Haedicke said.

"Certainly, new product introductions are one of the best ways to build excitement and volume within the store, and the same thing can be said for promotions. And if you want to talk about consumer satisfaction, how about front-end efficiency," he said.

Haedicke also reiterated the committees' strong commitment to presenting concrete examples of how ECR can be implemented at the retail and manufacturer levels. "A general trend here is to come out with a lot more case studies of what has worked and what hasn't, which reinforces our direction toward practical solutions aimed at in-store issues and at the consumer."