CREATING WIN- WIN TRADE PROMOTIONS #Consumer360
Feb 22, 2016
CREATING WIN-WIN TRADE PROMOTIONS
#Consumer360
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CAN 1% MAKE A DIFFERENCE?Significant investments are made…
Trade Promotion is essential for shelf placement, feature & display presence and pricing tactics
COGS AdvDist R&DTrade Promo
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HUGE VARIANCE IN PERFORMANCE AND ROI
Promotional performance varies widely Average ROI 11.2%
1000%
800%
600%
400%
200%
0%
-200%-200% -150% -100% -50% 0% 50% 100% 150% 200%
37% 56%
6% 1%
PROMOTIONAL PERFORMANCE USING FULL ROI ANALYSIS
NET
INCR
EMEN
TAL
GSR
UPL
IFT
%
ROI %
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KeyChallenges
Unsophisticated& Unsatisfied
SignificantSpend
THERE IS A NEED FOR OPTIMIZATION
• 2nd largest expense in CPG• 2.5x ad spend
• 40% of promotions ineffective• Out of stocks ~8%• 70%+ clients unhappy
• Measuring Trade Efficiency• Retail Execution v Plan• Technology Alignment
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CURRENT PROCESS – A NEED FOR IMPROVEMENT
Modeling
Enhanced Strategy Planning
Strategic Optimization and Planning
Pre
Plan
ning
Promotional Evaluation
Budget & Targets
Analytics
Post
Eve
nt
SAP
Syst
em
TPO Baseline Planning
Event Volume Planning
Promotional Planning
Budget Setting
TPM
Fund Management, Accruals
Invoicing Terms
Shipment Planning
Event Claims
ACTIVATE
Customized pricing comparison at local level
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DISCIPLINED PROCESS WINS THE DAYStrategic Planning
Tactical Planning
Promotion Management
Post Event Analytics
Retail Execution
Integrated Retail sales dataleveraged
throughout the process
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LET’S DO THE SIMPLE MATH
Trade spend
$200BINDUSTRY YOU
$100M
$500M
$2B
$1M
$5M
$20M
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8#Consumer360
WINNING REQUIRES MULTIPLE COMPONENTS
Embed and propagate
Descriptive and predictive
Clear framework & knowledge path
Evolves with the market and teams
Leadership and domain knowledge
CultureContent ScaleExpertise Cadence
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9#Consumer360
ONE CLIENT’S STORY TO IMPROVE EXECUTIONGaps between Strategies and Tactics
Early wins build momentum
Goal: Improve Promotion ROI One big pain point
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10#Consumer360
EXISTING TOOLS/SOLUTIONS LEFT GAPS
Multiple stakeholders
Different needs
Execution disconnects
with strategy
TECHNOLOGY TOO COMPLICATED
CAN’T ACTIVATE AT RETAIL
SIMPLE
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11#Consumer360
FILLING IN THE DATA GAPSImprove content and cadence
…all the timeAll Categories
(In a given category)All Competitors
(In all geographies)All Customers
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12#Consumer360
PROVIDED A SIMPLE TOOLExpand scale across user groups
Consistency and transparency
ONE
Flexibility to multiple users
Speed to insight
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13#Consumer360
A POWERFUL COMBINATION OF TOOLS
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14#Consumer360
LOCAL SALES TRAINING DRIVES ADOPTION
Users understand the data
Simulations relevant to local marketplace
Field empowered to make decisions
Increasing collaboration
“Right tool to the right stakeholder” expands expertise
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“ ”$12MILLION
8xROI
Letting the data guide the
conversation has given us the
credibility we need with our retail
partners
ONE CATEGORY, ONE RETAILER, ONE BIG WIN
Manufacturer
Retailer
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16#Consumer360
CLIENT IS BUILDING UPON THIS MOMENTUM
Collaborative Plans
Customer Influence
NEW CONTENT
AND TOOLS
Looking for additional ROI opportunities
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17#Consumer360
DEFINE AND EVALUATE A STRATEGIC PLAN
INTEGRATED TOOLS DRIVE WIN/WIN OUTCOMES
DEFINE AND EVALUATE A STRATEGIC PLAN
EXECUTE EFFICIENTLY
MONITOR AND ADJUST IN REAL TIME
CASCADE TO TACTICAL PLANNING
Retailer P7 Bogo
Retailer P7 Bogo
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18#Consumer360
IT’S IMPORTANT TO REALLY UNDERSTAND “INCREMENTAL”Promotion Source of Volume
Past Paradigm Purchase Behaviors
Store Switch
Brand Switch
Non – Promoted Volume
Subsidized Volume
IncrementalVolume
Non – Promoted Volume
Subsidized Volume
Time Switch
Market Expansion
New Paradigm
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19#Consumer360
Manufacturer Benefit
Reta
iler B
enefi
t
HIGHLOW
LOW
HIGH
PROMOTIONAL SOURCE OF VOLUME ENABLES FOCUS ON MUTUALLY BENEFICIAL PROMOTIONS
27%
32%
25%
17%
PROMOTIONAL IMPACT FRAMEWORK
Retailer Growth
Subsidization Manufacturer Growth
Mutual Growth
Note: Source: Nielsen Promotional Source of Volume Models; 30 category average 2013
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Database View PSOV View
Brand A+ lift
Brand B++lift
Brand C+++lift
Brand C++ lift
Brand A+++ lift
% Promotion Incrementality to Manufacturer/Retailer
Brand B+lift
WRIGLEY UNCOVERED DIFFERENCES ACROSS BRANDS & HOW THEY LADDERED TO PORTFOLIO & CATEGORY VALUE
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21#Consumer360
5% - 10% + improvement in trade efficiency
Reduced operational costs and time delays
Rapid
time to value5% - 10% +
improvement on forecast accuracy
LET’S PARTNER TO DRIVE BOTTOM LINE RESULTS 1% is a meaningful start toward greater goals
#Consumer360
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