1. Planes, Boats & Planograms Howard Bergman

2. The Power of the Customer There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. Sam Walton

3. Planes

4. Cost of a Flight $58,050 Fixed - $46,050 –Jets –Airport facilities –Customer service –Mechanics –Pilots –Flight attendants –Baggage handlers Variable - $12,000 –Fuel –Food

5. Total Cost = $58,050 Variable Cost = $12,000 Total Revenue = $12,800 Ave Cost/passenger (16) = $3628 Loss/Profit = $45,250 $800/seat 4 rows @ $3,200/row = $12,800 $460/seat 11 rows@ $2760/row = $30,360 Total Cost = $58,050 Variable Cost = $12,000 Total Revenue = $27,800 Ave Cost/passenger (46) = $1261 Loss/Profit = $30,250 Total Cost = $58,050 Variable Cost = $12,000 Total Revenue = $58,160 Ave Cost/passenger (112) = $518 Loss/Profit = $110 $320/seat 10 rows @$1,980/row = $19,800 Total Cost = $58,050 Variable Cost = $12,000 Total Revenue = $77,960 Ave Cost/passenger (172) = $337 Loss/Profit = $19,910 $500/seat 5 rows @ $3,000/row = $15,000

6. $300/seat 15 rows @ $1,800/row = $27,000 Total Cost = $48,000 Variable Cost = $12,000 Total Revenue = $27,000 Ave Cost/passenger (90) = $555 Loss/Profit = $21,000 Low Cost Airlines

7. $175/seat 15 rows @$1050/row = $15,750 $800/seat 4 rows @ $3,200/row = $12,800 $500/seat 5 rows @ $3,000/row = $15,000 $460/seat 6 rows@ $2760/row = $16,560 Total Cost = $58,050 Variable Cost = $12,000 Total Revenue = $44,360 Ave Cost/passenger (82) = $708 Loss/Profit = $13,690 Total Cost = $58,050 Variable Cost = $12,000 Total Revenue = $60,110 Ave Cost/passenger (172) = $337 Loss/Profit = $2,060

8. BOATS

9. = Our engines Cost = $80 Price = $100 Total Profit = $100 $20

10. = Our engines Cost = $80 Price = $95 Total Profit = $75 $15 Total Profit = $90 $15

11. PLANOGRAMS

12. Maximize Economic Profit What does a Retailer Need? Increase Margins Increase Turns Increase other sources of income Decrease cost of capital employed Decrease cost of operations

13. Store Layout Yard FoodPharmacyHouseware Clothing

14. Planogram Assortment: What to carry Pricing: What retail price Promotion: How to display it Placement: Where to put it Supply: How much, how often

15. Assortment: Variety vs Duplication Are these items worth keeping? How many items ? How many sizes ? Will the consumer switch to another brand ?

16. $2.00$3.00 $3.15 - $3.00 = $0.15 $2.20 -$2.00 = $0.20 $0.15 X 100/month = $15.00/month $0.20 X 50 month = $10.00/month $25.00/month

17. $0.15 X 150/month = $22.50/month $0.20 X 25 month = $5.00/month $27.50/month

18. Maximize Economic Profit What does a Retailer Need? Increase Margins Increase Turns Increase other sources of income Decrease cost of capital employed Decrease cost of operations

19. Yard Food PharmacyHouseware Clothing

20. The Power of the Customer There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. Sam Walton

21. The End Thank You

22. $3628 $1261 $518 $337 1721124616 $800 $500 $460 $350

23. MPLS Las Vegas 6:00 pm 7:00 pm 8:00 am 11:00 am 8:00 pm 11:00 pm 6:00 am7 am 2 Full Flights Profit = $42,000 2 Additional Flights 1/2 full Variable Cost = $24,000 Revenue = $44,360 Loss/Profit = $20,300 Total Profit = $62,300