It’s around this time that manufacturers and retailers agree joint business plans, or JBPs, for the coming year. But JBPs can be a very mixed bag, so if you’re going to do one, it’s essential you do it in the right way and for the right reasons. JBPs come in just three flavours, so which one is right for each of your major relationships?
The Sales Plan:
It’s the most common form of JBP but, in reality, it’s nothing more than a 12-month promotion calendar. Periods of trading, interspersed with launches and deals. It’s a low-value exercise. At best it helps you coordinate activity, stock, and investment across the year, but it’s never going to transform your businesses, so don’t waste much time on it.
The Battle Plan:
This flavour of JBP is really a competitive negotiating tool, to be used to gain specific commitments and concessions. A retailer may be offered extra promotions for a cost price increase. A manufacturer might be promised volume growth in return for more investment. The numbers in the plan are only there to support the negotiation, and to be used as a beating stick, for one side or the other, during the year. It’s a hard-nosed deal for a 12-month period, so it needs time, focus and planning.
The Strategic Plan:
The “strategic” JBP is very different. It requires an open, collaborative relationship. It starts with an ambitious vision of where the relationship could be in the future, where it could add genuine value for customers, and where it could create something new, different and worthwhile. The strategy is as much about joint initiatives as it is about buying and selling, and it may outline a plan that will run for the next several years.
BOTTOM LINE: you can’t collaborate with someone intent on competing with you. But for those relationships where you can collaborate, the rewards from a strategic JBP can be huge. Choose the right approach, set appropriate objectives, and adopt a style to maximise the opportunity. Don’t waste your time going through the motions – there’s really no point.