DemandTec Announces New Version of Consumer Demand Management Applications

DemandTec 4 Dataflow Technology Quantifies and Optimizes Total Store Impact of Pricing and Promotion Strategies for all Products

SAN CARLOS, Calif. – March 1, 2004 – DemandTec Inc., the global leader in Consumer Demand Management (CDM) software, with more customers in production than any other CDM vendor, today announced the latest version of its CDM Science Platform™ and applications. DemandTec 4™ includes applications for optimizing base pricing and promotions, whole store pricing, and market basket analysis. With these capabilities, retailers for the first time have the ability to quantify the Total Store Impact of all of their merchandising decisions.

DemandTec 4 efficiently processes vast quantities of Transaction log (T–log) data, Point of Sale (POS) data, loyalty data, and syndicated data for every stock keeping unit (SKU), every store, every week. Next, specific price recommendations and promotion tactics are provided to merchandisers, category managers and pricing analysts to achieve the optimal balance of revenue, profit, and volume at the category/store/chain level, while increasing traffic and improving price image. In addition, DemandTec's Market Basket and Affinity Analysis delivers cross-category product interaction and market basket insight to all DemandTec applications, enabling retailers to understand the best way to grow the number of baskets and basket size, and to improve the overall profitability of each basket while understanding the Total Store Impact of these improvements.

With the addition of user–defined rules based pricing to DemandTec's sophisticated optimization capability, retailers for the first time can use one system to set prices for all merchandise regardless of the nature of the item. The overall platform enables customers to find consumer buying patterns, apply business rules and objectives, and test complex "what if" scenarios with the ease of navigating a Web–based graphical user interface. The resulting data provides retailers with a clear understanding of consumer demand at every price point, to make precise fact based decisions

"Since DT4 supports the full spectrum of product lifecycles – in one system – retailers can make the best possible merchandising decisions by accurately forecasting the perfect balance of price, promotion and markdown to reach their business objectives," said Dan Fishback, President and CEO of DemandTec.

"Our experience with DemandTec 3 is that it's the ultimate consumer demand rules engine," said Don Beaver, Senior Vice President, Information Systems & CIO of H–E–B Grocery Company. "Now we're looking forward to moving to DemandTec 4 because its rules based, whole store pricing will streamline our operations and enable us to more quickly react to market changes."

At the heart of DemandTec 4 is the CDM Science Platform, an enterprise solution that incorporates the company's patented consumer demand, financial, and rules engines. Driving the T–log processing is a new, patented dataflow engine. DemandTec automates bi–directional data integration with data warehouse and legacy systems via its DemandTec OpenLink integration software.

DemandTec 4 – Retail Merchandising Optimization Applications
DemandTec 4 includes four Web–based products that help retailers create, test and execute merchandising strategies based on a clear understanding of consumer demand: DemandTec CDM Science Platform™, DemandTec Price™, DemandTec Promotion™ and DemandTec Markdown™.

• DemandTec CDM Science Platform delivers a robust understanding of consumer demand across the entire retail enterprise utilizing patented demand modeling techniques that deliver unique consumer demand models for each SKU in each store. Additionally, this platform incorporates activity based costs to measure full financial impact. DemandTec CDM applications utilize this platform to ensure that all activities are mutually visible across the decision making process.
• DemandTec Price utilizes the CDM platform and recommends the best base prices for every item in every store. This updated application allows retailers to create and test pricing strategies incorporating key business rules and objectives, such as price limits, volume goals, gross margin, brand relationships, competitor pricing and cost changes.
• DemandTec Promotion determines which products to promote, product-to-product affinities, and which promotions yield the best return. Retailers can easily see the effect of a promotion at the product, category and total store levels.
• DemandTec Markdown determines the best price reduction strategies at the chain and store level. This platform was architected to be extensible across DemandTec's current and future applications so that all merchandising activities are mutually visible across the decision making process and use the same data to ensure "one version of the truth."

DemandTec 4 will be generally available in April 2004. For more information, please visit www.demandtec.com.

About DemandTec
DemandTec's Consumer Demand Management software helps retailers and consumer products manufacturers strategically plan, optimize, and execute demand–driven merchandising and marketing programs based on a quantified understanding of consumer demand. Retailers have ranked DemandTec #1 in Strategic Value, Customer Satisfaction, and Quality of Service among the top 50 retail software vendors in the 2004 RIS Leaderboard survey. DemandTec customers include B&Q, Best Buy, Brookshire Grocery Company, Duane Reade, H–E–B Grocery Co., Longs Drugs, Monoprix, RadioShack, and Safeway. DemandTec software is provided via the IBM On Demand program. For more information, please visit www.demandtec.com

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