CARLTON & UNITED BREWERIES at the Chief Data Officer Forum Melbourne, August 2015

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Leveraging Your Data for Competitive Pricing Advantage

Craig Dick

Carlton & United Breweries

Head of Revenue Strategy and Analytics

© CUB Pty Ltd 2014 – Not to be reproduced without prior written permission

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Contents

• Assessing the power of data analytics to improve product pricing

• What is the big deal about analysing big data sets?

• Developing information driven business models for competitive

advantage

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Data we leverage for competitive advantage

Consumer DataInternal Data Warehouse – Transactional data

Retailer Scan Data

Catalogue data On-premise tap Shopper DataAd Spend Data

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e / L

itre

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Data analytics gives us the ability to review the performance and predict forward sales

Baseline

Seasonality

Discount Price

Growth

Key Selling week


CatalogueAd campaign

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Where analytics really creates a competitive advantage…is understanding where volume uplift comes from

Category growth

Switching within store

Switching across stores

Volume brought forward

Potential Cannibalisation


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Through the data we obtain on consumers we know what they drink…we know what you drink

Example : Corona Repertoire AnalysisBEER & CIDER (TOP 20 BRANDS DRUNK IN L4W)

0 2 4 6 8 10 12 14 160

50

100

150

200

250

300

Series3

% of BRAND drinkers that drink others

Inde

x vs

. tot

al b

eer &

cid

er d

rinke

rs

Drun

k m

ore

than

m

arke

t ave

rage

Drun

k le

ss th

an

mar

ket a

vera

ge

Of all the people who drink Corona…What else are they drinking?


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PositivesSignificant sales uplift on baseline sales for both the 24-pks of VB and the 6-pks of Crown, as well as strong visibility for the offer in store.

30,000 UPLIFT IN VB 24-pk UNITS

P.W.

14,000 UPLIFT IN CROWN 6-pk UNITS P.W.

CASE STUDY: ‘VB AND CROWN BUNDLE FOR $50’

Where we know there is overlap, there is opportunity to leverage this


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How does the consumer think about beer price?

Vs.

$42 $48 $39 $45

Absolute Relative


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The data we obtain on consumers allows us to get a better interpretation on product preference


Which of these brands do you believe is worth paying the MOST for? And which of these brands do you believe is worth paying the LEAST for?

Brand Trade-off Analysis

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Outcome is a clear ranking allowing us to better price position products based on consumer choice

Max Diff Ranking: Worth paying MORE for minus worth paying LESS forWorth LESS Worth MORE


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Overlaying Actual market price shows us opportunity to change price

Worth less Worth more

Actual market price

Opportunity to increase

market pricing


Max Diff Ranking: Worth paying MORE for minus worth paying LESS for

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Segmenting for Consumers who buy Premium more often

Worth less Worth more

Actual market price


Max Diff Ranking: Worth paying MORE for minus worth paying LESS for

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Contents



• Developing information-driven business models for competitive

advantage

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What is the big deal about analysing big data sets?Every dollar spent on wasteful promotions adds upConsumer Reach: % of beer consumers who would consider this product

100%

50%

75%

25%

0%50% 40% 30% 30% 15%

+15% +10% +8% +7%50% +90%=

Total Consumers Reached

50% 25% 15%


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What is the big deal about analysing big data sets?The more products we put on promotion, the less we make

-4 -3 -2 -1 0 1 2 3 4 5 60

5

10

15

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25

30

35

Less than 5 Between 5 and 10 10+

Portfolio Weighted Ave. Price Variance to Average

Mar

ket S

hare

Number of brands on promotion

When Overlaying CUB Total Profit Curves


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What is the big deal about analysing big data sets?It is essential to have the information that your customers want

The No.1 brand consumers will switch store for

The fastest growing Premium

Beer

The new Hipster beer!

The No.1 product grocery shoppers that

aren’t buying beer: Spend $30 at deli, get

$10 off Carlton Dry


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Commentary Line 1

17On-premise (Pubs etc.) geographic analysis

Quintile 1100%+

Quintile 213% - 85%

Quintile 30% - 12%

Quintile 4(33)% - 0%

Quintile 5(100)% - (46)%

CBD: 1,185HL+12% PY

Cardiniac 11HL100% PYCasey 20HL

208% PY

Casey 20HL208% PY

Frankston 18HL, 112%

Hume 113HL19% PY

Derabin 83HL2% PY

Greater Geelong 92HL, 119% PY

Mornington Peninsula38HL, 10%

Golden Plains0HL -100% PY

Macedon Ranges9HL, -46% PY

Mitchell 0HL-100% PY

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Contents



• Developing information driven business models for competitive

advantage

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How does a Key account Manager optimise a promotional program based on data insights?• Promotional frequency and depth

• Seasonality

• Co-promotion

• The right pack size 6pk, 24pk

• Bundling

• Retailer mechanics

• Region

• Cross customer optimisation

• Pricing linked to Marketing


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Make it Simple: Build the tools – “Almost like playing Tetris”

1 2 3 4

Example Available Advertised Promotional Slots


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Make it Simple: Build the tools – “Almost like playing Tetris”

1 2 3 41. Frequency

2. Optimise Co-promotion

3. Premium Bundle

4. Seasonality

5. Portfolio Balance


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6

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Guiding questions when developing a promotional programme

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VB was selected as the main volume driver

Frequency target every 4th week

PB and VB have a combined total reach of 71%

Fat Yak has been identified as an ideal bundle with PB

It also provides trade-up opportunities to PB drinkers

Christmas and Father’s Day are Key Selling Weeks for

the Crown Brand

Bulmers provides representation of the Cider

category in the promo programme

The promotional strategy allows us to make better

choices around promotional planning


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Based upon last week, the tool will make recommendations for the next week…and so on

1 2 3 4


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The big deal about analysing big data

Developing an information-driven business

Data analytics to improve pricing

Leveraging Your Data for Competitive Pricing Advantage


Predict Understand Optimse

Spend Efficiency Review & Learn Customer language

LEVERAGING data for competitive ADVANTAGE…

Make it PRACTICAL and ACTIONABLE

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Septem

ber 2

008

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2009

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015

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Rolling 3 months Weighted Ave price / 9LE (24 and 30s) - NON MIX ADJUSTED

Pric

e - 9

LELeveraging Your Data for Competitive Pricing Advantage

43% 44% 44%


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Questions

• Do we get free beer? – Yes, ~2 slabs per month

Frequently Asked

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$33 $34 $35

$35 11% 93 10% 94 9% 92

$34 12% 96 11% 97 10% 95

$35 14% 101 13% 100 12% 98

$36 16% 104 15% 102 13% 100

Understand at what price your competitors will re-act and where you can sustainably hold price

Market Share

Profit$M

4054

4

4060

3

4066

4

4072

5

4078

7

4084

8

4090

9

4096

9

4103

0

4109

1

4115

3

4121

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4127

5

4133

4

4139

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30

31

32

33

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39

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Price per 30pk: Rolling Qtr

CUB Competitor

A push to achieve $3 difference

Following competitor reaction $2 relativity was considered the

necessary gap by CUB

CUB brand price

Com

petit

or b

rand

pric

e

• At $33 the profit was maximised if we were $3 under competitor

Running multi-linear elasticity analysis we can determine at what absolute price and price relativity would we be most profitable

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2

31 2

3


• When competitor responded by adjusting price down to a $2 gap, it was better to lift prices back and keep the $2 gap at a higher price

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MEGA Block!• Straight ROI analysis doesn’t always explain

the full picture• How much is incremental uplift vs. sales

brought forward

2 Fors• Make sure it’s a the right product for the right

consumer • 1 for $48 or 2 for $78 ($39 each)• Typical consumer for some products don’t

want to buy 2 slabs

Spend Gets: Spend $30 in Grocery and get $10 off Beer• Analysis to determine the right product• Shopper data to understand what beer

products are bought by a shopper who also buys grocery

What is the big deal about analysing big data sets?We can learn from ours… and our customers promotions


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Developing information driven business models for competitive advantage

• How Frequent to not over promote?: We run promotional reviews to determine how Frequent to promote, which ones should we starting increasing frequency and depth

• Seasonality: Which time of year should we promote particular products

• Co-promotion: What combination of products each week

• Frequency and phasing of skus: Carlton Dry 30, 24s, 10s, 6s

• Bundling: Buy a 24pk +6pk Crown for $10: CUB products, bundle with competitors

• Retailer mechanics: Spend more than $30 get a 6 pack for $10

• Region: Northern NSW differs to South NSW, Metro vs. Regional

• Cross customer optimisation: Dan Murphy’s vs. an Independent Drive Thru this week

• Pricing linked to Marketing

How does a Key account Manager optimise each weeks promotional program leveraging the insights we have?


Data & Analytics

CARLTON & UNITED BREWERIES at the Chief Data Officer Forum Melbourne, August 2015