RAMSTORE & GILLETTEOral Care Category Management Project

Anton Voichik National Key Account Manager

Kirill Liseev Oral Care Business Director

Agenda

Oral Care Category Review– Russia market review– Supermarket channel dynamics

Oral Care Category Management Project– Joint Business Planning– Agreement to proceed– Analysis– Implementation– Review

Future Collaboration

Toothbrush Market Review

Global Market Share Leadership

Manual - 22% (#1) Power - 48% (#1)

– Rechargeables 70% (#1)– Battery 30% (#2)

Refills - 73% (#1)

34%

Value Shares:

Oral-B34%

SKB 7%

J&J 4%

Other 23%

Colgate 17%

P&G 6%Unilever 6%

Oral-B: Clear Global LeaderOral-B Global Market Share

Toothbrush Market Size - Russia

1999 2000 2001 2002 2003 200440

50

60

70

80

90

100

44.5000

52.5000

70.8000

89.100091.600095.0000

Market size has grown significantly over past yearsIn 2003, category growth has slowed downMM units

49.9

22.4

27.721.5

22.256.3

Low Price Premium PriceMid Price

Volume % Value %

Low price segment is still the largest in volumePremium segment is the clear contributor in value

92 MM toothbrushes 56 MM USD

Toothbrush Market Segments - Russia

Toothbrush Segment Development

JF 2001 JA 2001 JF 2002 JA 2002 JF 2003 JA 2003 JF 2004

15.1 15.518.8 19.6 20.5 21.4 21.7

17.2 17.9 19.4 19.8 21.924.4

28.9

67.7 66.761.9 60.6

57.654.2

49.4

Low Price Mid Price Premium Price

Continuous upgrading of market during past three years

%

JF 01 JA 01 JF 02 JA 02 JF 03 JA 03 JF 04 Avg 01 Avg 02 Avg 030

5

10

15

20

25

30

35

18.6000

23.2000

25.6000

12.1000

9.70008.8000 9.5000

10.9000 10.90009.3000

13.9000

20.0000

22.5000 23.300025.3000 25.7000

26.8000

25.1000 25.1000

28.2000 27.6000

29.900031.4000

34.0000

ColgateAvg.Oral-B share

Oral-B GSK

Value Share Trends - RussiaOral B continues to achieve record market share growth while Colgate is leading with strong position

Importance of KOBs

Total Toothbrushes

Oral-B

JF 2004

Toothbrush Market Size - Moscow Supermarkets

1999 2000 2001 2002 2003 200440

540

1040

1540

2040

2540

109.7365325.2986

632.0581

1136.8990

2125.79592311.0000

Market size has grown significantly over past years1000 units

JF 01 JA 01 JF 02 JA 02 JF 03 JA 03 JF 040

5

10

15

20

25

30

35

40

45

7.93575.1205

8.0937

13.171111.2665 11.2045 11.7682

43.2078

30.4482

21.022923.7047

26.5105

19.6220

25.5374

10.1602

22.4001

25.8953 26.355924.5275

32.6898 32.5789

Oral-BAvg.Oral-B share

Colgate GSK

Source: AC Nielsen Russia National

Manual Value Share Trends Moscow Supermarkets

Strengthening Leading Position

SO 2002 ND 2002 JF 2003 MA 2003 MJ 2003 JA 2003 SO 2003 ND 2003 JF 2004 MA 2004-0.0000000104%0.0999999940%0.1999999881%0.2999999821%0.4000000060%0.5000000000%0.6000000238%0.6999999881%0.8000000119%0.8999999762%1.0000000000%1.1000000238%1.2000000477%1.2999999523%1.3999999762%1.5000000000%1.6000000238%1.7000000477%1.8000000715%1.8999999762%2.0000000000%2.0999999046%2.2000000477%2.2999999523%2.4000000954%2.5000000000%2.6000001431%2.7000000477%2.7999999523%2.9000000954%3.0000000000%3.1000001431%3.2000000477%3.2999999523%3.4000000954%3.5000000000%3.6000001431%3.7000000477%3.7999999523%3.9000000954%4.0000000000%4.0999999046%4.2000002861%4.3000001907%4.4000000954%4.5000000000%4.5999999046%4.7000002861%4.8000001907%4.9000000954%5.0000000000%5.0999999046%5.2000002861%5.3000001907%5.4000000954%5.5000000000%5.5999999046%5.7000002861%5.8000001907%5.9000000954%6.0000000000%6.0999999046%6.2000002861%6.3000001907%6.4000000954%6.5000000000%6.5999999046%6.7000002861%6.8000001907%6.9000000954%7.0000000000%7.0999999046%7.2000002861%7.3000001907%7.4000000954%7.5000000000%7.5999999046%7.7000002861%7.8000001907%7.9000000954%8.0000000000%8.1000003815%8.1999998093%8.3000001907%8.4000005722%8.5000000000%8.6000003815%8.6999998093%8.8000001907%8.9000005722%9.0000000000%9.1000003815%9.1999998093%9.3000001907%9.4000005722%9.5000000000%9.6000003815%9.6999998093%9.8000001907%9.9000005722%10.0000000000%10.1000003815%10.1999998093%10.3000001907%10.4000005722%10.5000000000%10.6000003815%10.6999998093%10.8000001907%10.9000005722%11.0000000000%11.1000003815%11.1999998093%11.3000001907%11.4000005722%11.5000000000%11.6000003815%11.6999998093%11.8000001907%11.9000005722%12.0000000000%12.1000003815%12.1999998093%12.3000001907%12.4000005722%12.5000000000%12.6000003815%12.6999998093%12.8000001907%12.9000005722%13.0000000000%13.1000003815%13.1999998093%13.3000001907%13.4000005722%13.5000000000%13.6000003815%13.6999998093%13.8000001907%13.9000005722%14.0000000000%14.1000003815%14.1999998093%14.3000001907%14.4000005722%14.5000000000%14.6000003815%14.6999998093%14.8000001907%14.9000005722%15.0000000000%15.1000003815%15.1999998093%15.3000001907%15.4000005722%15.5000000000%15.6000003815%15.6999998093%15.8000001907%15.9000005722%16.0000000000%16.1000003815%16.2000007629%16.3000011444%16.3999996185%16.5000000000%16.6000003815%16.7000007629%16.8000011444%16.8999996185%17.0000000000%17.1000003815%17.2000007629%17.3000011444%17.3999996185%17.5000000000%17.6000003815%17.7000007629%17.8000011444%17.8999996185%18.0000000000%18.1000003815%18.2000007629%18.3000011444%18.3999996185%18.5000000000%18.6000003815%18.7000007629%18.8000011444%18.8999996185%19.0000000000%19.1000003815%19.2000007629%19.3000011444%19.3999996185%19.5000000000%19.6000003815%19.7000007629%19.8000011444%19.8999996185%20.0000000000%20.1000003815%20.2000007629%20.3000011444%20.3999996185%20.5000000000%20.6000003815%20.7000007629%20.8000011444%20.8999996185%21.0000000000%21.1000003815%21.2000007629%21.3000011444%21.3999996185%21.5000000000%21.6000003815%21.7000007629%21.8000011444%21.8999996185%22.0000000000%22.1000003815%22.2000007629%22.3000011444%22.3999996185%22.5000000000%22.6000003815%22.7000007629%22.8000011444%22.8999996185%23.0000000000%23.1000003815%23.2000007629%23.3000011444%23.3999996185%23.5000000000%23.6000003815%23.7000007629%23.8000011444%23.8999996185%24.0000000000%24.1000003815%24.2000007629%24.3000011444%24.3999996185%24.5000000000%24.6000003815%24.7000007629%24.8000011444%24.8999996185%25.0000000000%25.1000003815%25.2000007629%25.3000011444%25.3999996185%25.5000000000%25.6000003815%25.7000007629%25.8000011444%25.8999996185%26.0000000000%26.1000003815%26.2000007629%26.3000011444%26.3999996185%26.5000000000%26.6000003815%26.7000007629%26.8000011444%26.8999996185%27.0000000000%27.1000003815%27.2000007629%27.3000011444%27.3999996185%27.5000000000%27.6000003815%27.7000007629%27.8000011444%27.8999996185%28.0000000000%28.1000003815%28.2000007629%28.3000011444%28.3999996185%28.5000000000%28.6000003815%28.7000007629%28.8000011444%28.8999996185%29.0000000000%29.1000003815%29.2000007629%29.3000011444%29.3999996185%29.5000000000%29.6000003815%29.7000007629%29.8000011444%29.8999996185%30.0000000000%30.1000003815%30.2000007629%30.3000011444%30.3999996185%30.5000000000%30.6000003815%30.7000007629%30.8000011444%30.8999996185%31.0000000000%31.1000003815%31.2000007629%31.3000011444%31.3999996185%31.5000000000%31.6000003815%31.7000007629%31.8000011444%31.8999996185%32.0000000000%32.1000022888%32.2000007629%32.2999992371%32.4000015259%32.5000000000%32.6000022888%32.7000007629%32.7999992371%32.9000015259%33.0000000000%33.1000022888%33.2000007629%33.2999992371%33.4000015259%33.5000000000%33.6000022888%33.7000007629%33.7999992371%33.9000015259%34.0000000000%34.1000022888%34.2000007629%34.2999992371%34.4000015259%34.5000000000%34.6000022888%34.7000007629%34.7999992371%34.9000015259%35.0000000000%35.1000022888%35.2000007629%35.2999992371%35.4000015259%35.5000000000%35.6000022888%35.7000007629%35.7999992371%35.9000015259%36.0000000000%36.1000022888%36.2000007629%36.2999992371%36.4000015259%36.5000000000%36.6000022888%36.7000007629%36.7999992371%36.9000015259%37.0000000000%37.1000022888%37.2000007629%37.2999992371%37.4000015259%37.5000000000%37.6000022888%37.7000007629%37.7999992371%37.9000015259%38.0000000000%38.1000022888%38.2000007629%38.2999992371%38.4000015259%38.5000000000%38.6000022888%38.7000007629%38.7999992371%38.9000015259%39.0000000000%39.1000022888%39.2000007629%39.2999992371%39.4000015259%39.5000000000%39.6000022888%39.7000007629%39.7999992371%39.9000015259%40.0000000000%40.1000022888%40.2000007629%40.2999992371%40.4000015259%40.5000000000%40.6000022888%40.7000007629%40.7999992371%40.9000015259%41.0000000000%41.1000022888%41.2000007629%41.2999992371%41.4000015259%41.5000000000%41.6000022888%41.7000007629%41.7999992371%41.9000015259%42.0000000000%42.1000022888%42.2000007629%42.2999992371%42.4000015259%42.5000000000%42.6000022888%42.7000007629%42.7999992371%42.9000015259%43.0000000000%43.1000022888%43.2000007629%43.2999992371%43.4000015259%43.5000000000%43.6000022888%43.7000007629%43.7999992371%43.9000015259%44.0000000000%44.1000022888%44.2000007629%44.2999992371%44.4000015259%44.5000000000%44.6000022888%44.7000007629%44.7999992371%44.9000015259%45.0000000000%45.1000022888%45.2000007629%45.2999992371%45.4000015259%45.5000000000%45.6000022888%45.7000007629%45.7999992371%45.9000015259%46.0000000000%46.1000022888%46.2000007629%46.2999992371%46.4000015259%46.5000000000%46.6000022888%46.7000007629%46.7999992371%46.9000015259%47.0000000000%47.1000022888%47.2000007629%47.2999992371%47.4000015259%47.5000000000%47.6000022888%47.7000007629%47.7999992371%47.9000015259%48.0000000000%48.1000022888%48.2000007629%48.2999992371%48.4000015259%48.5000000000%48.6000022888%48.7000007629%48.7999992371%48.9000015259%49.0000000000%49.1000022888%49.2000007629%49.2999992371%49.4000015259%49.5000000000%49.6000022888%49.7000007629%49.7999992371%49.9000015259%50.0000000000%50.1000022888%50.2000007629%50.2999992371%50.4000015259%50.5000000000%50.6000022888%50.7000007629%50.7999992371%50.9000015259%51.0000000000%51.1000022888%51.2000007629%51.2999992371%51.4000015259%51.5000000000%51.6000022888%51.7000007629%51.7999992371%51.9000015259%52.0000000000%52.1000022888%52.2000007629%52.2999992371%52.4000015259%52.5000000000%52.6000022888%52.7000007629%52.7999992371%52.9000015259%53.0000000000%53.1000022888%53.2000007629%53.2999992371%53.4000015259%53.5000000000%53.6000022888%53.7000007629%53.7999992371%53.9000015259%54.0000000000%54.1000022888%54.2000007629%54.2999992371%54.4000015259%54.5000000000%54.6000022888%54.7000007629%54.7999992371%54.9000015259%55.0000000000%55.1000022888%55.2000007629%55.2999992371%55.4000015259%55.5000000000%55.6000022888%55.7000007629%55.7999992371%55.9000015259%56.0000000000%56.1000022888%56.2000007629%56.2999992371%56.4000015259%56.5000000000%56.6000022888%56.7000007629%56.7999992371%56.9000015259%57.0000000000%57.1000022888%57.2000007629%57.2999992371%57.4000015259%57.5000000000%

21.4000%22.7500%

31.3500%

37.4200%40.3800%

26.5500%

23.0100% 22.4500%

13.7200% 12.8110%

0.0000%

8.0000%

11.7400%

7.1800% 7.6400%

3.7900%6.1700%

1.8200%4.1800% 3.5708%

27.6800%

21.0800% 21.0100%

28.6200% 28.0700% 27.4000%

31.6300%

25.3100%

29.1700%

25.3684%

50.9200%

46.2900%

34.2400%

26.3100%23.6200%

42.0100%

37.9100%

50.0500%52.2400%

57.4110%

Power Value Share Trends Moscow Supermarkets

Strengthening Leading Position

Market Assessment Summary

Category growth slowing down Strong consumer upgrade to premium products Nationally growth has been driven by distribution

expansion Oral-B has strong leading position in manual and power

oral care Oral B has the expertise to grow the overall cake and drive

oral care category

RAMSTORE & GILLETTEOral Care Category Management

Anton Voichik National Key Account Manager

Ramstore Oral Care Category BackgroundThe category used to grow by double digit numbers YOY until

2003

– 57% Chemical– 43% Physical

The growth was driven by the new stores openings and performance of the power and Oral-B

– 92% Toothbrush– 885% Power– 241% Oral-B

Oral-B is leading in Toothbrush Category in Ramstore while it is #2 in total Russia

4 Step Process

Category Context

Opportunity Delivery

Opportunity Identification

Planning And Alignment

STEP 1

STEP 2

STEP 3

STEP 4

The category management opportunity and the need for data / insight

Category growth slowing down

Strong consumer upgrade to premium products

Nationally growth has been driven by distribution expansion

Oral-B has strong leading position in manual and power oral care

Oral B has the expertise to grow the overall cake and drive oral care category

At store level:

Space allocation

Product assortment

Promotion mix

On-going education

Oral care category in Russia:

General research :

Shopper insight

Potential category management levers:

Pruchase frequency

Shopper / consumer education at POS

Footfall

Category opportunities:

Limited availability of the required data

Retail data at the store level:

Space allocation

Product assortment

Promotion mix

On-going education

Purchase frequency Trade - up Penetration Footfall

Required data/insight to understand impact of...: Possible sources of information:

Limited data environment:

Agencies: - Data not complete - Data not ready

Sales force: - Too time consuming

Retailers: - Data not shared with suppliers

... on...:

Oral Care solutions 1: Joint Business Plan

Gillette Oral CareJBP

JBP strategy articulated around the expected category management key growth drivers:

– Increase the turnover and profit via maximizing the frequency of purchase the trade-up and penetration– Shopper and consumer education via the on shelf communication– Increase the footfall via the life style images

Access to data:

Retailer: Data shared with Gillette as preferred suppliers

Key data to deliver JBP: Space allocation Product assortment Promotion mix On-going education

Oral Care Encompasses a Variety of Categories that Help Consumers Maintain Healthy Mouths

The Oral Care occasion is the collection of categories that help consumers keep their mouths healthy and beautiful

Toothpaste

Toothbrushes

Interdental/Floss

Mouthrinse

Whitening

Definition

Categories

OC CATEGORY

Physical

Paste Rinse Manual Power

Rechargeable

Chemical

Oral Care Category

Battery

Interdental

Floss

Specialist

Category Optimization - Oral Care

Get the Category Segment Space Right

Get the Assortment Right

Get the Promotional Mix Right

Toothpaste Manual Power Kids Floss Rinse

0.50

0.30

0.100.05 0.03 0.05

0.70

0.20

0.03 0.02 0.02 0.03

Get the Category Segment Space Right

Opportunities Exist to Grow Category Volume by Right-Sizing Key Sections Based on Ramstore Data

Main Aisle Percent Space AllocationBeforeRecommended

Get the Assortment Right

Brand Rationalize Important Items– Consumers are confused by huge assortment– Limited Unique Selling Propositions (USP’s)– Lower price points devalue the category– Out-of-stocks on high volume brands force

shoppers to go other outlets Toothbrush Brands portfolio was Reviewed

Category Growth Driver/Support Matrix

Jordan

SKU’s in Top 20

Consumer Loyalty

Trade Promotional Spending

Advertising/Media Spending

New Product Development

Dental Professional Support

TrisaAquafreshReachColgateOral-BKey Brands

• deal with the whole category• more focus on physical (brushes + interdental), on premium and value-added brushes• include power• have a separate dedicated Kids area• a unique Ramstore design

Oral Care Strategic Partnership Agreement

Oral Care Category VisionEnsure all products within the consumers

consideration set are merchandised together, with appropriate call to action messages at the point of

purchase to facilitate the category strategies3 Steps : 1. Attract shoppers to the aisle– Paste adjacency is critical - forms total category in the eyes of the consumer

2. Complexity of the selection– Consumers take 137 seconds to shop the physical oral care section vs an average of 53 seconds for other HBA categories – 26% of physical oral care shoppers walk away from the aisle due to confusion.3.Facilitate the trade up and frequiency – Effective call to action messages– Clear segmentation and use of the key brands for easy navigation

BEFORE CATMAN: Category Outlook Toothbrush category were underspaced

Toothbrush fixture on hooks looked not too attractive

Display by brand

No dedicated Kids and power section

Toothpaste were overspaced

No detailed communication at the POP

Price tags and price promo communication only

Ramstore Oral Care Visibility Elements

Oral Care Planogram RecommendationBased on the Ramstore sales data, store level

recommendations were prepared

CATMAN Implementation Steps

#1 Allocate appropriate space for quemical and fisical (Increase space for brushes)

#2 Introduce more shopper friendly layout and replace hooks by shelves for the toothbrushes

#3 Introduce lights to category to attract the shoppers

Highlight the sub categories for POC & Kids

AFTER CATMAN: Category Outlook

160

180

200

220

Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov03Dec03Jan04 Feb04 Mar04

Oral CareCategory

Sales Value

Ramstore Oral Care Category Performance

ToothbrushCategory

Sales Value

Oral-BSales Value

70

80

90

Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov03Dec03 Jan04Feb04Mar04

25

35

45

55

Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov03Dec03Jan04Feb04Mar04

BEFORE AFTER7%

8%

20%

Apr04 May04

Apr04 May04

Apr04May04

• The appropriate space allocation, ballanced product assortment, the right promotional mix and more pleasant shopping experience can really grow the category value• The toothpaste segment did not decline despite of the reduction of the shelf space• The maintenance of the agreed planograms and the on shelf availability is vital• The evaluation is the key for the future recommendations• Understanding the magnitude of the category management and the Oral care project success, Ramenka and Gillette agreed to approach the Grooming Category

Summary: Project Results & Learnings