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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