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Category Management CEE Example
Hot Beverages Czech Republic
2011 - 2013
CAtegory
STrategy
LEadership
We are here to show the real example of
the catman cooperation and with the
results…
Zdeněk MELOTIK
NESTLÉ Czech
Category and Channel
Sales Development
Manager
Václav KOUCKY
NESTLÉ Czech
Category
Developement
Manager
Patricie JAKESOVA
University of
Economics
Prague,
Business partner
4
Category management has positive challenges
Efficient resources Business based on partnership
Efficient communication HQ and stores
Invest sources people/time/finance
Overall discipline
Cooperation and mutual understanding
Keep business agreements
Keep continuity in category management
Business strategy
Business process
Information technologies Performance measurement
Data sharing
Information pool
Applicable results
Project evaluation and fine tuning
What were the overall growth opportunities?
Desired sales
SUPPLIER RETAILER SHOPPER
Penetration of the category
Margin enhancer
Loyalty to chain of the retail / brand
Basket growth
Enjoyable shopping
experience
Category Story
Consumer&Shopper Strategy for
growth 2011-2013
How we build up the success story to deliver
category GROWTH … Here is the success
story of The Hot Beverages … but potential
should be unlocked in all the categories.
Retailing structure of the Czech Republic is quite fragmented with a clear dominance of the
international players.
SOURCE: ACNIELSEN, 2010
…We aimed Hot Beverages, based on the
consumer needs which defined the category.
Category definition: All beverages that are prepared primarily in hot way satisfying whole day needs; accompanying
person through the whole day.
SOURCE: PROJECT CAKE; INTERNATIONAL NEED
STATE STADY, 2010
Background
10
We have found a huge PREMIUMISATION
opportunity in the world of our consumers!
• Hot beverages represent • 35% of the drinking occasions • …but only 25% of share of throat • and “just“ 20% of share of wallet
•There is still a potential to overcome the gap in the share of wallet with the share of throat and convince consumers to migrate towards more value added propositions
Background Background
11
• Whereas consumption of Hot Beverages
is highly emotional, connected with need
states such as kick start, socializing or
having a break…
• The shopping reality differs a lot and is
essentially functional :
• Category shopping is confusing
• Purchase is promotion driven
• Decision is made on “autopilot”
mode
• Shopping is planned
Background
There is a big potential in connecting the emotional consumption with emotional shopping
… and also our shoppers did not find any
attractivity while buying hot beverages
12
Based on the shopper and consumer needs we defined CATEGORY GROWTH DRIVERS … with a direct link to our customers and activation at the Point of Sales .
Convenience
in stores
Healthy growth
Attract youth
Purposeful
promotions
Combination
is great!
Bet on winners
• Convenience in stores - Leverage
the synergy between Hot Beverages
segments by reflecting in store the
shopper decision tree. Attractiveness
and easier navigation within the
category will contribute to
incremental growth.
• Bet on winners – Reflect/anticipate
segments sales dynamics in space
allocation and breadth of assortment
• Purposeful promotions - Use all
consumer and shopper knowledge to
attract them with the right promo
mechanics and appropriate
communication at the right place in
store. Trade plan preparation
• Combination is great - Leverage the
cross-consumption potential of Hot
Beverages by placing them in proven
sales driving locations and with affinity
categories.
• Attract Youth – Young people (<30)
are under-indexing on consumption. It
is critical to bring them to Hot
Beverages through cocoa (6-12 years)
and transition them to Coffee
(teens+)by developing and
communicating on specially designed
varieties (foaming mixes)
• Healthy Growth - The hot beverages
category suffers from a lack of
education and negative myths about
health. This opportunity can be
unlocked by appropriate
communication in&out the store.
Delivering category growth approach helped
us together with customers to overcome the crises.. Current 2012 growth +2,7%
+ 1,2%
Source: ACNielsen, total retail, January 2012
Source: ACNielsen, total retail, August2012
Coffee was the key growth driver of the Hot Beverages. Continues to growth above the
market performance. Portioned Coffee= key growth driver = BET ON WINNERS
15
Stores in scope: 230 in Czech
*At the expense of tea and creamer category
* * *
Tesco managed to growth the share on the market by 1,4% within the HOT BEVERAGES
16
5 Stores in scope: 40 HM
Kaufland managed to grab the opportunity within highly developing segment with premium shoppers
100 HM
17
6 Stores in scope: 15
*
Globus managed to bring excitement to a destination category and catch future shoppers
20
•It´ s not the project but rather the long term process and a mindset
•It’s not a “One size fits all” approach : Not all customers are willing to engage on
Category Development initiatives Segmentation of the customers is needed to allow for
tailored plans.
• Managing complexity : As multi –functional teams are involved on both the customer and
Nestlé’s side, it is essential to clearly define roles, responsibilities, timing and quantified
deliverables
• Top management endorsement is crucial : If engaged from day 1,it will help solving
problems (escalation) and will create a sense of ownership on both sides. Crucial part of the
There are some key challenges in cooperation between the manufacturers and retailer.