ECR Europe Forum '08. Differentiate or die: shopper-driven solutions

Differentiate or Die: Shopper Driven Solutions

© Oxford Strategic Marketing 2008


In today’s competitive marketplace, successful retailers and suppliers work together to segment shoppers and deliver clear, unique propositions in store.

Purpose of session

1

Why do retailers need to differentiate?

How do retailers differentiate?

What are the implications for manufacturers?



2

In developed markets, retailer consolidation is intensifying retailer brand share battle

Top 12 EU retailers will have c.60% share by 2010

Retailers are chasing a finite amount of consumer spending

US sub-prime crash



3

In-store is a powerful and necessary branding opportunity

Up to 70% of purchasing decisions are made in-store

Each week twice as many people in UK visit Tesco as watch primetime ad breaks

Vs

Shoppers use a portfolio of stores

Typical store loyalty is 26%

73% of shoppers use 5+ channels



4

Segmentation Insight

Proposition Joint Strategies

Using strategic skills the same ways as brands . . .



5

Environment Product

People & Services Communication

. . . and by translating these strategies into differentiated solutions via shopper touchpoints

© Oxford Strategic Marketing 2008 6

Artisanal

Organic Gourmet

1st Price

ProductEnvironment

A real “wow” factor – premium, energetic & dynamic

Film set style lighting and glamour cues Shop-in-shop – El Corte Ingles,

Touchpoint Examples



Communication

Special interest clubs

Clubcard

Promotions

How do retailers differentiate? Touchpoint Examples

People & Services

Cheese counter

Wine expertMaster butcher


What are the implications for manufacturers?

8

Upgrading the Customer Marketing role

Brand and Customer marketing co-creation of commercial strategies and plans - requiring new processes, skills and ways of working

Continuing to create systems to generate and apply shopper insight

Improve strategic marketing techniques to achieve mutually beneficial in-store differentiation


This session demonstrates the sophisticated brand marketing techniques used to target

shoppers with unique differentiated propositions

9

How will this session help?

Result: joint sustained value for . . .

Shopper Retailer Supplier


Agenda

Key Success Factors for Differentiation

Kay Boycott –Oxford Strategic Marketing

Strategic retailer differentiation

Bob James –Oxford Strategic Marketing

Joint Oral Care Plan Duarte Fragoso - SonaeJoao Miranda – Colgate

Differentiation through shopper segmentation

Janne Anttila – Analyse2

Maija Mustonen - Kesko

Turning shoppers into buyers

Detlef Koch – L’Oréal


Strategic branddifferentiation in retail - and its impact on suppliers



Key points

• Complexity of retailer differentiation

• Need for new brand model – FMCG models don’t work

• Need to cascade brand strategy into day to day operational guidance

• Customer-noticeable impact demands fewer, bigger bundles of activity co-ordinated across touchpoints


Hospitality retailing – same scale of challenges as many product retailers

10 millionmonthly customers

67,000employees

19,000 outlets

2

Leading EuropeanHospitality Retailer


Whitbread wanted stronger Brand differentiation across all its business sectors

3


Costa Coffee

• Global retailer – Europe, Middle East, India, China

4

We will focus on Costa Coffee as:

• Like grocery, competes on product sales, service, instore environment and location Core format is High Street but format & estate segmentation are key to expansion

• Aggressive brand-literate global competitor


Retailer branding is different from FMCG

Highly intangible needse.g. “people like me”,

atmosphere, etc

Desired brand experience varies by mission and

mode of use

Customer mental and physical state can vary

within single visit

External Maximise capacity utilisation of asset

Manage wide range of “in-use” touchpoints

Operationally-led organisations and cultures

Internal


3 critical tools were used to address the challenges of managing a retailer as a brand

6

Shopper Insight – a critical component

of the Insight Packs

Journey Mapping required to define

Touchpoints Sequenced shopper-noticeable

brand-building initiatives

Brand House TouchpointGuidelines Brand Staircase


Costa’s Brand House

CONFIDENTIAL

CONFIDENTIAL


Feel special

EntertainingStylish

InformalFriendly

Live life to the fullTreat people as individuals

Don’t rely on traditionGive good value

No-one gives such individual treatment and so makes you feel so special.

No-one gives such individual treatment and facilities at this price. No better entertainment on a flight.

Executives, 35-55. Make my own choices. Style conscious.

Door to door care. Hostesses (who are a cut above the rest) at beck and call. Fantastic

facilities.

“I need a hassle free trip from end to end, and to be recognised as an individual”

Pampered from start to finish, and so feel really special.

Direct: BA First ClassSecondary: US Airlines 1st Class

Business trip to East Coast via New York

Couples 45-65, cost conscious, not one of the crowd.

More stewardesses. Greater range of films and games.

Prices 10% cheaper than BA

“Even though we want great value, we don’t want to feel like we’re in cattle class.”

Great value without being just another name, and so feel special.

Direct: BA World TravellerSecondary: US Airlines Economy

Visiting friends & relations in North America (+2 week trip)

Couples 25-45. Metropolitan. Work hard. Spend to enjoy life.

Fun loving staff. Responsive service. Great entertainment.

“We have earned our holiday, so the fun has to start the moment we get to the airport”.

The best fun in the sky, and so really enjoy self.

Direct: BA BusinessSecondary: US Airlines Business Class

Short break holidays to New York

PERSONALITY &VALUES

OCCASION

CUSTOMER

COMPETITOR

INSIGHT

BENEFIT

WHY THEY’LLBELIEVE US

DISCRIMINATOR

BRAND PROMISE

Note: fictitious example

Brand HouseIllustrative example


How do Touchpoint Guidelines fit into Whitbread’s management toolkit?

1. Enduring strategic definition of the brand

2. Enduring strategic guideline to shape the thinking behind executional plans

3. Executional definitions which may need revisions and upgrades

Operational Standards

Brand Standards

Bridging strategy into operational

action

En viron ment

People & Service

Produ cts

Commu nications

SOME TOUCH POIN TS STR ET CH ACROSS CORE & SELEC TED SU PPORT OCC ASIONS

SOME TOU CH POIN TS ARE SPECIFIC TO TH E C ORE OCC ASION ONL Y

SOME TOUC HPOINTS STR ETCH ACR OSS CORE &ALL OTHER SUPPOR T OCC ASION S

SOME TOUC HPOINTS AR E SPEC IFC TO A SUPPOR T OCC ASION ONL Y

C ore Occasion Suppo rt Occasion Sup port Occasion

En viron ment

People & Service

Produ cts

Commu nications

SOME TOUCH POIN TS STR ET CH ACROSS CORE & SELEC TED SU PPORT OCC ASIONS

SOME TOU CH POIN TS ARE SPECIFIC TO TH E C ORE OCC ASION ONL Y

SOME TOUC HPOINTS STR ETCH ACR OSS CORE &ALL OTHER SUPPOR T OCC ASION S

SOME TOUC HPOINTS AR E SPEC IFC TO A SUPPOR T OCC ASION ONL Y

C ore Occasion Suppo rt Occasion Sup port Occasion


Customer journey mapping was critical to defining Touchpoint Guidelines

OXFORDSM ‘HEART MONITOR’Example: Coffee Shop

An OxfordSM Tool to map the total customer experience and identify: what matters most to customers; performance highs and lows; and levers for solution hunting

External appearance

Enviro to take break

Space available

Choice of food

Visuals of food/ pricing

Team interaction

Specials

Efficiency of pay process

Make drink

Quality deliverable

Getting the extras

See a table

AccessibleAppropriate

Music buzz

No smoke

Taste product

People like me

Toilet

Parting gesture

Know what to do

Moment of truth

Readying to go!Relax & EnjoySettle at tableReceiveOrder, Sale, PayChoose & QueueApproach & Enter

Customer JourneyCustomer Journey

GreatGreat

PoorPoor

Environment

People & Service

ProductsCommunications

Levers for Solution Hunting

Customer experience

NB. Populated with fictitious data for illustration only


Touchpoint action was then aggregated and prioritised across occasions to create major noticeable initiatives

• Challenge for retailer brand builders is not to dissipate activity and investment across so many individual touchpoints

• These then become invisible to the shopper

IMPACTLow High

Priority ChallengesLower Priority Action

Priority Quick WinsSymbolic Momentum Builders

Priority ChallengesLower Priority Action

Priority Quick WinsSymbolic Momentum Builders

DO

-AB

ILIT

Y

Low

WAVE 1

WAVE 2

WAVE 3

Environment

People & Service

Products

Comms

SOME TGs STRETCH ACROSS CORE & SELECTED SUPPORT OCCASIONS

It’s not Costa unless...

SOME TGs ARE SPECIFIC TO THE CORE

OCCASION ONLY

SOME TGs STRETCH ACROSS CORE &ALL OTHER SUPPORT OCCASIONS

SOME TGs ARE SPECIFIC TO ONLY ONE SUPPORT

OCCASION

Core Occasion Support Occasion Support Occasion

Environment

People & Service

Products

Comms

SOME TGs STRETCH ACROSS CORE & SELECTED SUPPORT OCCASIONS

It’s not Costa unless...

SOME TGs ARE SPECIFIC TO THE CORE

OCCASION ONLY

SOME TGs STRETCH ACROSS CORE &ALL OTHER SUPPORT OCCASIONS

SOME TGs ARE SPECIFIC TO ONLY ONE SUPPORT

OCCASION

Core Occasion Support Occasion Support Occasion


Brand Staircase combines short term Touchpoint action with more radical initiatives

→ Current situation

→ Key Measures to quantify the long term brand development objective

Vision Brand AmbitionBrand AmbitionBrand Ambition

STARTSTARTSTART

Existing TouchpointImprovement

Innovation A:

Bundled Touchpoints

→ Address major consumer negative

→ Differentiate Touchpoint

→ Extend consumer perception on key driver

→ Attract new consumer group

→ Develop competence in new area

Bundled Touchpointsfor New Occasion

Innovation B:

Bundled Touchpoints


Costa’s Brand Staircase combined short and longer term change

→ New Italian designer coffee cups

→ Improve store design and merchandising to increase authentic Italian atmosphere

→ Improve food quality consistent with Italian authenticity

→ Reduce seasonality skew to warm weather consumption via summer Frescato launch

→ Increase loyalty and dwell-time among core customers for pitstopoccasion through association with relaxing reading: renaming of Whitbread book awards

→ No need to waste time queuing to pay when you’re rushing to work. Reduce walk-aways to drive commuter occasion revenue

→ Winning customers loyalty by delivering the Best Coffee Moments

Brand AmbitionBrand AmbitionBrand Ambition

STARTSTARTSTART

Store design andmerchandising

Costa Book Awards

Italian coffee cups

Italian pannini snacks

Frescato

Pre-pay card

Support grower communities

→ Build awareness of Costa’s support for grower communities

NB. For confidentiality, reconstructed from externally observable initiatives


The Results: The Process

14

John DerkachManaging DirectorCosta Coffee Global

“This isn’t airy fairy marketing. It will fire up every person from Chief Executive to

front line”

Marketing Society Award 2005

(for marketing capability)

For more information see the full case study at www.oxfordsm.com


The Results

15

New Food Offer

Re-imaged stores external & internal

“We now understand why the Costa experience can hook the guest and the role our

coffee plays”

Annual Report 2006/07Coffee

Year One“Customer noticeable relevant improvements”

Year Three“Brand transformation and hike

in commercial performance”

66% of surveyed customers would strongly recommend the brand –nirvana of Advocacy!

+16% like for like growth in 2 years


Implications?

“Brand” no longer a comms silo – now driving operational

decisions

Retailer investment in shopper/customer insight

Adoption of sophisticated brand management techniques

Strategic development of retailer brand – crucial criteria

for resource(e.g. store fit, merchandising, estate formats, product

listings, staff role and training,etc)

Alignment of supplier brand and total portfolio with retailer brand

Shopper insight investment;increase research collaboration

Brand-literacy in customer roles

Deep customer insight & open longer range strategic dialogues

FMCG Supplier Implications

Differentiation through

Advanced Shopper Segmentation

Maija Mustonen, Kesko Food Ltd

Janne Anttila, Analyse²

Agenda

Kesko’s Segmentation Challenge

Advanced Shopper Segmentation

Case Study : How Trend Segmentation BoostsPromotions

Key Learning Points & Conclusion

Finland5.3m

Sweden9m

Estonia 1.4m

Latvia 2.3m

Lithuania 3.4m

Norway4.5m

Total approx. 56 million consumers

Belarus9.8m

Kesko in Brief

St. Petersburg area 5m

Moscowarea 15m

Kesko FoodGrocery trade

41%

RautakeskoBuilding and home improvement

27%

VV-AutoCar and spare parts

8%

AnttilaDepartment store trade

6%

Kesko AgroAgricultural trade

8%

Other operating activities

10%

Group’s total net sales €9,5 billion (2007)

: Vision & Goals

• Our Vision requires us to develop deep customer insight – this helps us understand & anticipate customer expectations

• We use this insight to build the best shopping experience – we are always looking for new ways to delight our customers

: Food Stores

Hypermarket. A versatile and competitively priced store for the whole family. The selections include all food delicacies and branded products for clothing, leisure time and home

Supermarket. A high quality food store. Motivated and skilled staff at your service and a versatile selection of fresh qualityproducts always available

Convenience store. A store with a good selection of food. K-markets are located in suburbs or rural centres

Small convenience store. Focuses on personal serviceand, in addition to daily essentials, offers many extra services

How does this translate to our Food Stores?

Know your customers, differentiate from competitors, implement chain concepts

Kesko’s challenge in 2004: Consumer studies, POS data and loyalty card programs are not sufficientNo direct linkage to strategy and day-to-day business decision-making

Target:Everything has to be based on customer information

: Why we are interested in Advanced Segmentation?

CUSTOMER

SUPPLIER

Specialized in customer segmentation methods

Leading consultant in consumer insight management

Advanced Segmentation tools, reporting and analysis systems

Over 30 retail and supplier customers

Long term collaboration with Kesko:

Analyse² in Brief

Market information

ServicesSegmentation

2004 2008

Collaborative Information

Services(CIS)

Foodstyle

CM Processes&

Advanced Segmentation

2005 2006 2007

Next steps

...

Advanced Shopper Segmentation:Case Kesko

Advanced Segmentation – Trend Segmentation

Consumers

Trends

Customer segments

Stores

Products

The Benefits of Trend Segmentation

Strategic alignment

Trend segmentation

Chain concepts, target groups etc.

Anal

ysis

& C

ontr

ol

Supplier Collaboration Processes

NPIAssortment MgmtProduct Portfolio

Brand Portfolio

Pricing

Space Management Promotions

Marketing

CRM

R&D

Implementation

Customer programs, sales programs

Supplier Collaboration Process

New service launched to Kesko’s suppliersJointly agreed goalsInformation, tools and scorecards are common for both Kesko and suppliersDifferent levels of collaboration

NPIAssortment MgmtProduct Portfolio

Brand Portfolio

Pricing

Space Management Promotions

Marketing

CRM

R&D

Case Study: How Trend Segmentation Boosts Promotions

Advanced Promotion with Trend Segmentation

BackgroundCannibalisation between Mammutti (Mammoth-promotion) and sales

Totally new approach to promotion planningPromotion target groups and tactics were selected based on trend segmentation methods

• : price-oriented promotion with wide range of product categories

• : target customers prefer value beyond price

Several suppliers in co-operation

Trend Segmentation in Action

Target group analysis

Trend analyses in target groups

Category selection based on Trend segmentation

Matching products, target groups and trends

Selection of tactics based on the understanding of the target groups

Marketing message designed using target group and trend information

Measu

rin

g t

he r

esu

lts

Trends involved in every phase

Price Recipes etc.

Case Study : Results

The promotions went live in stores in Feb-Mar 2008

Sales, total +19,1% +8,4%

Sales, meat +13,3% +19,7%

Target categories +150-200% +130-250%

# of customers/chain +14,0% +1,4%


Key promotions designed with the help of trend segmentation do not cannibalize each other!

Explicitly defined target customer segments are in a key role in focusing the promotions

Continuous implementation from chain strategy into Category Management processes and supplier collaboration


Differentiate or die!

Change the segmentation paradigmTotal change in mindsetFrom projects to processesCommitment from strategic level

Change the collaboration in the value chainCommon language between retailer and suppliersInnovative ways to add value to the consumer

Thank You!

Analyse²

Mr. Janne AnttilaCEO

[email protected]

www.analyse2.com

VISIT US AT STAND 15/5

Kesko Food Ltd

Ms. Maija MustonenSales Manager

[email protected]

www.kesko.fi

L’Oréal: No. 1 in Beauty

560m Euro investment in Research & Development

100 years of expertise in cosmetics

17,1bn Euro consolidated sales turnover

19 global brands

60.851 Employees

Channels Brands

Food, Drug and Mass

The Body Shop

Pharmacies

Parfumeriesand department stores

Professional

L’Oréal: Distribution in all channels

Turning shoppers into buyers

Wednesday 28th May 2008

Detlef KochL’ORÉAL Germany

Spending for all FMCG from category buyers

Source: GfK Consumer Panel

The Beauty Exception

Different consumption behaviour

Highly profitable category

Above average spending for FMCG

2750

2800

2850

2900

2950

3000

3050

3100

Colour Cosmetics

Colorants Facial care

Spen

ding

in €

Ø

Colorants

Very emotional category

Quite complex

Very interesting for retailers: above average spending for FMCG

-21,5% -21,7%

+1,9%

+12,1%

+6,6%

+11,6%

+6,2%

18 - 24yrs

25 - 29yrs

30 - 39yrs

40 - 49yrs

50 - 59yrs

60 - 69yrs

70 yrs+

difficult market in recent years

A strong decrease of younger users

Colorants: Quite a challenge

Source: GfK Consumer Panel 2008

Development of the colorant market in %

Hair colorant users

-0,7

-8,4 -8,9

-0,1

0,41

Source: Nielsen Market Track

No demand anymore?

2005 2006 200720042003

Look outside one’s own territory

Consultancy

Professional application

certainty for consumers

Coloration development in salon in %

20072006

Colorants at hairdressers

Source: GfK Hairdresser Panel

+ 4,7+ 4,5

…and the driver for this growth is coloration

Overall, yearly spending in salon has increased …

Hugh selection of colorants

Product diversity = complexity (up to 500 items on shelf)

Lots of innovation

Limited product consultancy in-store

What does the mass market offer?

Current situation at shelf: hugh potential

30% non-buyers at shelf

mainly due to uncertainty

Source: L‘Oréal Shopper Studies, 2006

Percentage of buyers vs non buyers in different distribution channels

40,427,6

68,4 73,772,459,6

67,5

26,331,6 32,5

Total Drug Client 1 Drug Client 2 Hyper Client 1 Hyper Client 2

Buyers

Non-Buyers

Why did you not purchase today? (n=131)

14

12

12

28

28

30

31

37

44Just wanted to gather information

Was not sure how to choose the right product

Get an idea of pricing

Get an impression of total range offered

The color I wanted to buy was not available

Did not find what I was looking for

Scared to make a long lasting decision

Could not decide

Needed counseling, but no one was around

Bringing hairdresser benefits into the shelf

Conversion of non-buyers into buyers Sales-up-lift of the category

The Colorants Advisor

Combating the main causes of non-purchase:

Reducing the level of uncertainty

Guidance in the selection process

Increase of category awareness

Focus on younger target group (Attracting new, inexperience customers)

Consultation support for sales staff

Enhancing the category/image of trade partner

How does it work?

Question 1:Given my current hair colour, which colour would I beable to achieve?

Question 2:Finding your ideal coloration

Question 3:How do I apply the coloration correctly?

Colour recommendation

Brand recommendation

Application film

3 key questions to minimise purchase drop outs:

Reduce Uncertainty by giving clear advice

if hair is already coloured, no lighter tone than the current

hair colour is possible

with high percentage of grey hair, we recommend the use of a

permanent coloration

Video demo of how to conduct the Skin Allergy test

… and explaining complex products

Large box -> Difficult application?

Classified as a level 2+ product-> Explaining innovation

Application moviesExplication of key-benefits

Application in only 10 minutes

-> How does that work?

No roll-out without testing

Installation of terminals at retailers

6 months test

Evaluation of success via:

Click-Stream Analysis (via UMTS)

248 Shopper interviews at POS

Sales Monitoring vs. comparable shops

Findings: Terminal usage

ø 160 users per week/store(increasing development)

More than 60% of these are intensive users

terminal attracts first of all young target groups and shoppers with less experience in colouring at home

-> recruiting new users for the category

Source: POS interviews

3941

810

20

9

2018

2016 16

-20 years 21 - 30 years 31 - 40 years 41 - 50 years 51 - 60 years 61 years +

Age of users

Terminal users Non-Terminal users

Terminal users vs. non terminal users (248) in %

Findings: Awareness, Usability & Usefulness

terminal arouses curiosity for the category

nearly all users are completely satisfied with the usability

more than 70% stated that the information provided was helpful when searching for the right product

It is seen as an additional, helpful tool in upgrading the shelf and making purchase more interesting

Source: POS interviews

1415

23

48

very helpful helpful less helpful not a bit helpful

71%Usefulness of given information

in % of users (120)

Findings: Sales impact

Source: retailer scanner data

Terminal clearly supported the sale of colorants, despite the fact that some products needed to be removed to make place for the terminal.

104 104 104 103

106

80

85

90

95

100

105

110

Total Manufacturer1

Manufacturer2

Manufacturer3

Manufacturer4

Index (Volume)

To sum up the test results

The tool achieved its objectives and to some extent even exceeded

expectations:

very high acceptance

increase of category awareness

recruiting young and unexperienced users

reduction of the level of uncertainty

enhancement of the shelf

increase of sales in a difficult category

How can retailers differentiate today?

Competition through expertise and a great in-store experience

by

Looking outside one’s own territory

simply following panel data can be misleading

learnings from other channels help to recruit new users

Listening to the shopper and develop solutions that

serve relevant needs of consumers

are easy to use

are highly attractive for the intended target group

A win/win/win - Situation

&

Joint Oral Care PlanJoint Oral Care Plan

CP & Sonae Agenda

CP & Sonae Agenda

• Background• Oral Care joint plan• Business impact

• Background• Oral Care joint plan• Business impact

May 2008

Investor Relations departmentTel: + 351 22 956 19 47E-mail: [email protected]

Sonae Distribuição


3,4 Bn€*

Turnover

(215.000 articles in portfolio)

710.000sqm sales area

(in 646 stores)

No.1 retailerin Portugal

(with food and non food retail)b

~3.500suppliers

~32.000employees

(biggest private employer in

Portugal)

~2.800.000*

sales receipts/week

Key facts

2007 figures* not considering the hypermarkets acquired to Carrefour (Portugal) by the end of 2007


Portugal PortugalSpainGreece

Food RetailNon Food Retail Shopping Centres

SonaeCapital

Sonae Distribuição SonaecomSonae

Sierra

Telecommunications

PortugalFrance

ServicesTourism

SONAE SGPS

Portugal GermanyItalyBrazil

100%

Sonae world

Wood Based Products

SonaeIndústria

PortugalSpainFranceGermanyUK

BrazilCanadaS. AfricaSwitzerland

Europe

PortugalGermanySpainFranceU.K.IrelandItalyGreeceNetherlandsRomaniaPoland

Asia

China

Oceania

Australia

America

BrazilCanadaU.S.A.

Africa

South Africa

Sonae is present in 17 countries around the five continents with around 40,000 employees

Major milestones

Opening of the first

hypermarket in Portugal

(joint-venture with Promodés)

1995 …1990 …1985 …

Set up of the category

management model

Logistic and information

systems structure

Development into

non food based formats in Portugal

New market investment in

Brazil

Accelerated expansion

process in the food area

Consolidation of commercial and economic success of non food formats

Consolidation of the Brazilian

operation

Strong expansion plan

in Portugal

Client focus initiatives and promotional innovation

New non food formats

Divestment of Brazilian operation

2008 …

Strong expansion in

Portugal (organic growth

and integration of Carrefour

hypermarkets)

Continuous innovation

(value proposal and promotional

activity)

New formats and concepts

New market investment

(Spain)

Social responsibility &

sustainable development

2000 … 2005 …

Sal

es e

volu

tion



Balanced portfolio

Business development

Val

ue

crea

tion (

RoCE (1

) )

Bubbles’ size represents relative dimension of sales

Mature markets

Strong growth businesses

Options for the future

new businesses

(1) EBIT/Net capital employed

travel agencies

computers

mini-hypermarketsand supermarkets

hypermarkets

sports goods

DIY and garden

consumer electronicsapparel

mobile communications

kidswear

health areas

Colgate-PalmoliveColgate-Palmolive

• Started trading in 1806 in US• Selling products in 223 countries • $14 Billion Sales, 35,000 Colgate People• Worldwide Oral Care Leader

• Started trading in 1806 in US• Selling products in 223 countries • $14 Billion Sales, 35,000 Colgate People• Worldwide Oral Care Leader

Colgate-PalmoliveColgate-Palmolive

Using Shopping

• Consumer at the center of our strategy• Understanding of users & shoppers• Consumer at the center of our strategy• Understanding of users & shoppers

Buying

• Understanding of customers’ goals and strategies

• Drive sustainable and mutually profitable growth

• Understanding of customers’ goals and strategies

• Drive sustainable and mutually profitable growth

BackgroundBackgroundConsiderConsider Oral Oral CareCare a a keykey categorycategory

Sonae OC : 32,8%Sonae OC : 32,8%CP/Sonae OC : 46,2%CP/Sonae OC : 46,2%

VeryVery aggressiveaggressive goalsgoals for for thethe categorycategoryStrategicStrategic relationshiprelationship

CATEGORY DEVELOPMENT WORKSHOPCATEGORY DEVELOPMENT WORKSHOPCrossCross--functionalfunctional offoff--sitesite meetingmeeting withwith peoplepeople fromfrom bothboth

teamsteamsJanJan 2006 1st 2006 1st EditionEdition -- JanJan 2008 2nd 2008 2nd editionedition

Oral Care Development WorkshopOral Care Development Workshop

ObjectivesObjectives–– ShareShare MidMid--termterm plansplans andand initiativesinitiatives–– IdentifyIdentify andand selectselect keykey opportunitiesopportunities for mutual for mutual growthgrowth–– Define Define strategiesstrategies to to addressaddress thethe opportunitiesopportunities–– ShortlistShortlist tacticstactics andand agreeagree a a planplan ofof actionaction

Review past years activities (what worked well / things Review past years activities (what worked well / things to improve)to improve)Brainstorm Brainstorm identification of key opportunitiesidentification of key opportunitiesBreakouts sessions to address the opportunitiesBreakouts sessions to address the opportunitiesMedium term strategies and actions + Quick WinsMedium term strategies and actions + Quick Wins

Oral Care Development WorkshopOral Care Development Workshop

Oral Care Development WorkshopOral Care Development WorkshopOutcome:Outcome:

Strategic initiatives:Strategic initiatives:–– Develop OC in MODELO S Develop OC in MODELO S HypersHypers & Supers& Supers–– Education & TrainingEducation & Training–– Develop Kids SegmentDevelop Kids Segment–– DevelopDevelop Oral Oral CareCare systemsystem–– RelaunchRelaunch Oral Oral CareCare FairFair / OHM/ OHM–– SharedShared ScorecardScorecard

Action Plan signedAction Plan signed--off by top managementoff by top management

Oral Care Development WorkshopOral Care Development WorkshopSonae shopperSonae shopper

Oral Care involved, seeking superior Oral Care Oral Care involved, seeking superior Oral Care shopping experienceshopping experience

Regards Regards SonaeSonae as most trusted brand among retailersas most trusted brand among retailers

Families with kidsFamilies with kids

Higher penetration than average in high end Higher penetration than average in high end consumersconsumers

MultichannelMultichannel profile shopper: Urban in profile shopper: Urban in HypersHypers Small Small town and inland in Superstown and inland in Supers

EXECUTIONEXECUTION

Some Some tailor made activitiestailor made activities implemented in implemented in SonaeSonae’’s storess stores

OralOral CareCare UniversityUniversity

Oral Oral HealthHealth MonthMonth

ReplaceReplace toothbrushtoothbrush campaignscampaigns

KidsKids EventEvent

1. Importance of Oral Care Category

2. The tooth anatomy

3. Oral Problems -> DVD

4. Golden rules for a proper oral hygiene

5. Oral Care Category

6. Frequently asked questions

ContentContentOral Care training for SonaeOral Care training for Sonae’’s Store Personnel s Store Personnel

Colgate Oral Care UniversityColgate Oral Care University

March 2007: Train the TrainerMarch 2007: Train the TrainerCP gave training to SonaeCP gave training to Sonae’’s Trainers Group.s Trainers Group.

April 2007: RollApril 2007: Roll--out out Sonae Trainers delivered Oral Care training to all Sonae Trainers delivered Oral Care training to all Store Personnel that work in Health & Beauty section Store Personnel that work in Health & Beauty section (more than 200 people)(more than 200 people)

Colgate Oral Care UniversityColgate Oral Care University

Oral Health MonthOral Health MonthSecondary space dedicated to the Fair Secondary space dedicated to the Fair EducationalEducational contentcontent: : HygienistsHygienists andand KidsKids dental dental schoolsschoolsPartnershipPartnership withwith DentistsDentists andand communicationcommunication via via Media (Media (ColgateColgate) ) andand Sonae MagazineSonae Magazine

Oral Health Month - ResultsOral Health Month - Results

Oral Care SOM trend Sonae - 2º half 2007

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

Sonae H / Hipers Colgate / Sonae

Sonae Share uplift:+3ppSonae Share uplift:+3ppColgate at Sonae stable (thus gaining Market Share)Colgate at Sonae stable (thus gaining Market Share)ChildrenChildren participationparticipation 2007: 3500, +840 2007: 3500, +840 vsvs 20062006

• Purchase frequency less than once a year• 2007 quarterly campaign to remind to change

toothbrush every 3 monthsCampaign 26/02 - 11/03

VB VL QT

Anterior Acção

113%

113%

114%

ESCOVAS DENTES

37,01 37,96

47,49 49,61

26,47 27,23

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10

20

30

40

50

60

S. / H+S 06 S. / H+S 07 S. H / Hipers06

S. H / Hipers07

S. S /Supers 06

S. S /Supers 07

Dados YTD Julho / Agosto 2006 - 2007

Replace Toothbrush CampaignsReplace Toothbrush Campaigns

• 2008 quarterly campaign linked to seasons

Replace Toothbrush CampaignsReplace Toothbrush CampaignsInsight: • When asked, consumers claim they change brushes 3

times a year, but the purchase frequency remains lessthan once a year

• When probed, consumers do not recall last time theybought their toothbrush do not perceive it is time to change

New Season, New Toothbrush

Kids EventKids EventSonae Sonae TargetTarget customercustomer: : familyfamily withwith KidsKidsEventEvent focusfocus 100% 100% onon kidskids

AssortmentAssortment, , MechanicMechanic, POP Material , POP Material TimingTiming: : InternationalInternational ChildrenChildren DayDay ((JuneJune 1st)1st)

Kids EventKids Event

Insignia Sub-categoria VB QTPASTAS DENTÍFRICAS 11,2% 25,2%ESCOVAS DENTES 14,2% 21,4%COMPLEMENT HIG ORAL 83,0% 73,3%HIG ORAL INFANTIL 126,6% 92,3%

CONTINENTE Total 17,4% 27,9%

R / H

CONTINENTE

HIG ORAL INFANTIL

40,85 42,2549,76 50,19

31,97 34,46

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60

S. / H+S 06 S. / H+S 07 S. H / Hipers06

S. H / Hipers07

S. S /Supers 06

S. S /Supers 07

Dados YTD Julho / Agosto 2006 - 2007

ConclusionsConclusionsStrategicStrategic alignmentalignment & & focusfocus onon shoppershopperCommitmentCommitment to to implementationimplementationFollowFollow--upup andand continuouscontinuous improvementimprovement

Sonae Oral care SOM Evolution in 2007

From 32% to 33%

Colgate Oral Care BDI in Sonae

From xxx to YYYY

Differentiate or die: Key Success Factors



How different marketing techniques can be used to drive differentiation

Segmentation

Brand Proposition Development

What have we seen?

Insight

Joint Strategies


What have we seen?

How differentiation can be achieved through different shopper touchpoints

ProductEnvironment


How differentiation can be achieved through different shopper touchpoints

3

People & Services

What have we seen?

Communication


Key Learnings

4

Differentiation can take many forms – product, environment, people and communication

Retailers are using sophisticated brand management techniques and successfully linking them to

operational excellence

Solid strategic understanding can improve retailer-supplier collaboration as well as improve shopper

experience
