GMA to Study Better Ways to Use DSD for Business Growth

WASHINGTON -- Grocery Manufacturers Association said yesterday that the trade group has chosen Durham, N.C.-based Clarkston Consulting and Boston's AMR Research to conduct a study of how CPG companies and their trading partners can more effectively employ direct store delivery (DSD) as a marketing tool.

"Our mission is to help our member companies grow, and we believe a key component of that involves looking at the effective use of DSD," noted v.p. of supply chain and technology Pamela Stegeman Stegeman. "Our hope is that this study will promote industry dialogue and help change the perception of DSD from a distribution model to a marketing/sales execution model."

"Product availability and effective merchandising have dramatically increased in importance compared to traditional marketing tools such as advertising," added Thomas Bornemann, managing partner of consumer products at Clarkston. "DSD is one of the most effective methods available -- not only in terms of influencing product presence at the store shelf, but also in growing revenues when used as an extension of the marketing and sales execution model."

Earlier GMA studies on the effective use of DSD have looked at ways for trading partners to boost efficiency by adopting best practices. This latest study, "Growing through DSD," will build on the previous reports by investigating how closer collaboration with retailers can help create demand, improve supply chain effectiveness and, ultimately, better serve consumer needs. The study will additionally identify the many benefits that DSD provides to retailers in expanding their businesses.

For the study Clarkston will re-examine statistical information gathered in the GMA's 1999 study, "The Power of DSD," particularly data related to purchase frequency, new product introductions, inventory efficiencies, category growth, and the effectiveness of promotions.

The second part of the study will analyze the advantages of collaboration between manufacturers and retailers in creating demand and driving revenues, as well as in bettering supply chain and cost efficiencies.

A crucial feature of the study is to illustrate the DSD model of the future. Clarkston ha suggested that CPG companies should use DSD strategically, rather than simply as a distribution method, by using a model based on extensive collaboration with retailers, in which intelligent, fact-based DSD becomes an integrated part of marketing and revenue-generating activities.
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