DPP takes off with new technology: European standards to be harmonised

Abstract

The concept of Direct Product Profitability (DPP) is not new. The idea of being able to establish the individual contribution to profitability of each product by identifying costs of transport, shelf‐space, overheads and man‐hours has been around for some years. But the analysis has, up to now, been costly and time‐consuming — and has all too often finished up in the hands of data processing people who failed to appreciate its importance as a retail tool. Now, thanks to advanced technology — notably the PC — it's possible for the retailer to do the job himself, and compare rapidly and accurately the performance of one line against another. He can formulate his merchandising policy on a basis of being able clearly to identify products which are “sleepers” or “losers”, “winners” or “underachievers”. And he will be assisted in the job with the development, by the Institute of Grocery Distribution, of the first unified DPP model in the UK, announced early in March. In January an international workshop on DPP, under the auspices of the CIES, was held in Paris. It is apparent that the technique is being followed as enthusiastically on the continent as it is here; national models have been developed in both France and Germany, and it will be the function of the CIES to harmonise these with the UK model.

Citation

Harris, D. (1987), "DPP takes off with new technology: European standards to be harmonised", Retail and Distribution Management, Vol. 15 No. 2, pp. 9-12. https://doi.org/10.1108/eb018332