The added value of Trade Marketing @ Danone - LD & Co Marketing seminar 13_03... · product,...

The added value of Trade

Marketing @ Danone

François Bruch

13th March 2014

How is Danone organized to maximize selling out with retailers?

Marketing

Customer/Trade Marketing

Sales (KAM-Field)

Consumer & shopper Brand

Innovation & portfolio Mgt

Promo

Shopper Category

Shelf

Customer SPOC Nego

Organization before 2013

Marketing

Customer/Trade Marketing

Sales (KAM-Field)

Consumer Brand

Innovation

Shopper Category

Shelf Portfolio Mgt

Promo

Customer Excellence in

Execution Nego

Transformed organization

Challenges / barriers

S.P.O.C. S.P.O.C.

Key success factors/Learnings

BOARD COMMITMENT

CROSS FUNCTIONAL APPROACH Binomes with Marketeers with KAM’s

CUSTOMER PROJECTS

INTERNAL PROJECTS

IMPACT

What is the philosophy of Danone to win at the moment of purchase?

Who buys Fresh Dairy Products?

98 % of Belgium's households consumes FDP

at least once a year.

81% of FDP purchases are pre-planned.

73% of shoppers claim they knew exactly the product, the brand, the flavor they intended to buy.

Shoppers buy FDP less than once a week, and

most of the time just 1 product. They spend

less than 1 minute in the FDP shelf.

Who buys Fresh Dairy Products?

Source: Shopper Study TNS 2011

Who buys Fresh Dairy Products?

85% of shoppers are looking at the

freshness of FDP products

33% is searching for the best date

Only 64% of shoppers consider that the new

products stand-out on-shelf (56% for promotions)

Current category display is restricting explorative behaviour hence impulse buying

Source: Shopper Study TNS 2011

The highway towards shopper dream store

How to win @ the moment of purchase?

A way of working

… engaging all partners of Danone & the Customer (Danone: Customer Marketing, KAM, Logistic, Field force)

(Customer: Catman, Buyer, Logistic, Store Manager, Regional,…)

… based on a deep understanding of the shopper behavior

… in order to grow the total category

… thanks to a higher shopper satisfaction.

What is Optima?

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

The OPTIMA pyramid

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

The OPTIMA pyramid

• Objective: To define the optimal FDP shelf size for a store.

To have the right shelf size

KPI= €/M

Turnover(total FDP) per developed meter Measures the number of units sold per facing

• € / M too big Shelf too small

Out Of Stocks

• € / M too small Shelf too big

Poor freshness Emptiness perception

To have the right shelf size

Consequence: Lost of Turnover

21%

“All these colours… I feel lost”

“I always buy a product in the FDP shelf. Always the

same…”

“I can’t see any innovations in the shelf. They are not

impactful”

“I always go for the product I am looking

for, without watching others”

• What does the shopper says?

To have the right number of SKU’s

• If too much SKUs Poor visibility per product

Shopper can’t find his product = poor choice perception.

• If not enough SKUs Lost opportunity to offer a larger

choice without affecting visibility.

Consequence: Lost of Turnover

KPI =

Number of SKUs in an available space Measures that each product has an optimal visibility.

To have the right number of SKU’s

45%

Barriers & challenges

• “The more space I have, the more I sell”

• “The more sku’s I have, the more I sell”

• “If generated €/m in my shelf is too low, I should add more refs to boost my turnover”

• If I reduce my UF shelf, which category should I enlarge? “ enlarge “ “ “ “ reduce

• “Mrs Dupont comes each week & buys this specific product”

Buyer

Sales results are much better if you work on shelf size & # SKU’s

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI GAIN*

+1,8%

+1,8%

+1%

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

* Average observed on a sample of test stores

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

The OPTIMA pyramid

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

The OPTIMA pyramid

Guarantee the presence of products with a good freshness

“Choice, Availability,

Freshness, that’s all I want”

Source: Shopper Study TNS 2011

Guarantee the presence of products with a good freshness

KPI =

On Shelf Availability (OSA) and Freshness:

Guarantee the presence of products with a good freshness

47% lost sales for retailer when product is not available

30

40

50

60

70

80

90

100

19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3

Avg Sales Base = 100

Days of Freshness

Impact of freshness on sales evolution

Lower shelflife is lower sales

On Shelf Availability (OSA) Freshness

Guarantee the presence of products with a good freshness

Growth of turnover thanks to collaboration on OSA and freshness +4,5%

9%

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

The OPTIMA pyramid

Excellence in execution packaging & POS Material : Virtual store

Excellence in execution packaging & POS Material : Virtual store

Excellence in execution packaging & POS Material : Virtual store

Define clear promo roles

• Strategic alignment with brand strategy on the role of promotion

• Different mechanics according to the role.

• Different KPI’s for evaluation according to the role.

Optimize promo efficiency & re-invest in alternative tools

• Targeted approach (CRM) • Danone Mother brand • Penetration of innovations

Penetration of innovations Massive sampling

8,8k€ average sales

12,5k€ average

sales

Source : Nielsen Value

Sampling free products

Baseline sales @ Retailer 1: +40% (Baseline sales OM-Retailer 1: -1,2%)

Promo’s

OBJECTIVE

To have the right shelf size

To have the right space repartition by segment

To have the right number of SKUs

To have the right SKUs

To have the SKUs at the right place

Guarantee the presence of products with a good freshness

Guarantee promos/

innos visibility

KPI

€/M

SOS

# SKU

TSP

Merchandising

OSA/Freshness

Golden rules

Conclusion : the OPTIMAL Store

Thank you