Contribution After Advertising and Promotion. A quick way for marketeers and market managers to identify the profit of their brand or markets. It is obtained by deducting the A&P and COGS from the NSV and can be calculated globally for all a brand’s business, by market or even by customer. CAAP is particularly useful to understand when it’s a percentage of the NSV. Also a good measurement to watch closely as sales increase and investment increases too – this way marketeers can check the effect of their investment and watch if profit is increasing, or unfortunately decreasing.

Example of Use: ‘The CAAP of my brand is decreasing because I am not decreasing my investments in line with the decrease in sales.’

Indie Bartender Understanding: A great simple tools for marketeers but quite difficult for us in hospitality to define … we will work on creating a tool which could help understand this in our industry.

The very explicit English name for the type of store where businesses purchase their equipment and supplies and take it away to use or to sell. All types of business can purchase in Cash & Carry stores. Smaller businesses in the wine and spirits sector generally purchase the brands they need for their venues or outlets. Although the customers of a cash & carry can be any type of business, wine and spirits brands consider all sales through this channel as sales into the hospitality on trade.

Example of Use: ‘In order to increase the brand’s distribution in the on trade it is focusing development of the cash & carry channel through trade promotions and incentives in the C&C stores.’

Indie Bartender Understanding: Cash & Carries are where we get our stuff ! The big brands, the niche brands, the soft drinks and mixers as well as the basic tools and the bigger fridges, freezers etc that we need in our venues.

Channels of distribution are parts of the market where the types of business selling a company’s products are similar and operating under similar circumstances. Different channels exist across the market. A marketeer’s job is to understand them and activate them according to the band’s objectives.

Example of Use: ‘The on-trade channel in the city centre market in targets high net worth consumers who come to do business.’

Indie Bartender Understanding: A sub division of the wider market, hospitality is a channel in its own right and within that there are bas, hotels and restaurants …

As opposed to customer or consumer. A client is a person or business using the services of another professional person. -

Example of Use: ‘Lawyers have clients, supermarkets have customers and bars and restaurants have consumers … brands use the word consumer also when talking about their target and those who are the end purchaser of the chain. ‘

Indie Bartender Understanding: Our guests in the hospitality industry are not clients, nor are the customers, the word we should be using is consumer or of course, guests. Why ? Because they come into our venues and they consume … simple!

Cost of Goods Sold. This is the cost price of all the goods (product, brand or services) which the company is selling. It’s the sum of the components, and in wine and spirits, it’s the cost of the liquid, the bottle, the case, the labels etc etc…

Example of Use: ‘When I know my COGS I can define the price I wish to sell at … or when I know the price of the benchmarks of my competitive set, I can define the price I will sell at and then define my target COGS and work towards having a product whose cost price lets me invest and still make profit (CAAP).’

Indie Bartender Understanding: Understanding profit is important and without understanding the costs of the products and services we are selling that would be impossible.

These are composed of specific conditions and obligations which link a brand and its customers with the aim of reaching agreed objectives.

Example of Use: ‘Commercial agreements can be composed of specific discounts, A&P budget support, listing fees and target sales objectives.’

Indie Bartender Understanding: A commercial agreement can be helpful, or it can be a nightmare! It can tie a venue down or it can be a great boost to business. Either way it details the mutual support that brands or their distributors and the venues and customers give to each other!

The person who consumes the brand, ie. the person who buys the wine or spirit brand in order to consume it themselves. A brand sells to a bar (its customer) who then sells to people who order the brand (brand consumers). Consumers do not generally purchase a brand to then re sell it to someone else.

Example of Use: ‘The consume base of this liqueur brand is evenly split between men and women. Consumers like it for its sweet taste and enjoy it also in cocktails.’

Indie Bartender Understanding: In hospitality we use the word guests a lot to describe consumers. This is because we consider that they come into our venues for the experience and not just to put liquid down their throats!

The A&P Budget destined exclusively to finance activations targeting the consumer. -

Example of Use: ‘We use our consumer A&P to develop brand image, this is a long term strategy but we will see that over time our consumer loyalty will improve.’ -

Indie Bartender Understanding: This is the money brands spend trying to seduce their consumers.

Information and knowledge about consumer behaviour obtained by research institutes and sold to brands. This can typically help the brand understand that it is consumed in a particular way or by a particular consumer type. Institutes bring together consumers in focus groups to gain research conclusions about consumption trends.

Example of Use: ‘To understand the consumer we sometimes need to pay for research which gives us insight into their behaviour and needs. ‘ -

Indie Bartender Understanding: Research agencies sell reports on consumer behaviour and desires, but this doesn’t mean they are right or that decisions should only be based on this info. Having a good understanding of our business and our guests, a gut feeling, is often just as valuable and cheaper! Sometimes less tests and moe testicles is just as valid.

Another word for profit but not the legal term used for profit. It’s a concept is not an accounting term but points in the direction of what the profit trend will look like.

Example of Use: ‘The contribution of this brand to my company profit is low so we should not focus on selling too much of this brand. Spend our time on selling those brands with a higher contribution.’ -

Indie Bartender Understanding: It’s an indication of profit without being the legal accounting term for profit.

The people or organisations who purchase a product or brand from its producer or owner with the intention to take it away and/or to resell it. Customers may not be the same people for different organisations which sell. A customer can be a shop, a venue, like it may be a group or even a national distributor.

Example of Use: ‘A good way of distinguishing customers from clients or consumers, is that customers buy to re sell.’ -

Indie Bartender Understanding: To keep it simple us in hospitality we have guests or consumers … not customers.