Winning The On-Shelf War

Winning the On-Shelf War

This information is confidential and proprietary to Graphic Packaging International. Any reproduction or distribution to any 3rd party is strictly prohibited.

Graphic Packaging International

What are consumers not telling you about your brand?

What is the “value” of on-shelf differentiation?

What are consumers looking for on-shelf and how will they find you?

This information is confidential and proprietary to Graphic Packaging International. Any reproduction or distribution to any 3rd party is strictly prohibited. 2

how will they find you?

How can emerging technologies create differentiation?

What are Consumers Not Telling You?



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I’m ConfusedI’m ConfusedIs There a Better Alternative?Is There a Better Alternative?

Is It Worth the Price?Is It Worth the Price?Where is my Brand?Where is my Brand?

Why is this Section so Disorganized?Why is this Section so Disorganized?


I’m ConfusedI’m Confused

Why is this Better than the Others?Why is this Better than the Others?

Is There a Better Alternative?Is There a Better Alternative?

I Think the Store Brand I Think the Store Brand is Just as Good.is Just as Good.

Consumer Segments

MaturesBorn 1945 and earlier50 million adults*Age 60+ in 2005

Baby BoomersBorn 1946 – 1964 (’45–’65)78 million adults*Age 41 – 59 in 2005

Millennials Born after 1978 (’80–‘00; ’81–’95;

“Seniors”



Generation X Born 1965 – 1977 (’65–’80)53 million adults*Age 28 – 40 in 2005

Tweens, Teens, Young adults

Born after 1978 (’80–‘00; ’81–’95; ’82+)113 million individuals*Age 27 and under in 2005

Includes Babies, Young children,Tweens, Teens, Young adults

“Net Generation”(N-Gen) “Generation Y”

Born ’77–’02 (’78–’89, ’78–’95)71 million individuals

“Generation D”“Bridgers”

“Echo Boomers”

* Population estimates based on data from the U.S. Census Bureau in The Statistical Abstract of the U.S., 2004-2005

“Generation 14”

“Gen 13”

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1. ComfortLooking for Familiar and Safe Experiences from the Past

2. Consumers Shift from Accumulation to Protection

More value focusedWarehouse club growth


Consumer Trends that Affect Purchase Behavior

Warehouse club growth

Growth Private Brands3. Convenience

Ease of package use and time constraints

4. Health and WellnessAging global population

5. Shelf Impact Leading to Impulse Sales


Branding and DifferentiationPackage Innovations that Respond to Consumer Needs

New Design Innovations

BeforeBefore After Value Created

Yogurt cup

Yogurt in a tube

•• Supports 38% price premium over standard Supports 38% price premium over standard •• A convenience snack, GoGurt serves far A convenience snack, GoGurt serves far

more eating occasions more eating occasions


Commodity, large bottle

Differentiated, single serve bottle “to-go"

•• Large mouth “chug” is a huge hit with usersLarge mouth “chug” is a huge hit with users•• Milk wins new shelf space in CMilk wins new shelf space in C--storesstores

Standard 3X4multipack

New 2X6 “Fridge-Vendor”

•• 25% jump in 1225% jump in 12--pack sales, 10% in can salespack sales, 10% in can sales•• Fits better on a fridge shelf Fits better on a fridge shelf –– cans stay coldcans stay cold

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Branding and DifferentiationPackage Innovations that Respond to Consumer Needs

New Technical Innovations

BeforeBefore After Value Created

Traditional, gable-top cartons

Screw-cap spout

•• ShelfShelf--life increased by 10life increased by 10--20%20%•• Easy to open for kids & senior citizensEasy to open for kids & senior citizens


Loose produce

Salad-in-a-bag

In-store butchers Centralized meat-packaging facilities

•• Supports higher price pointSupports higher price point•• Improved brandingImproved branding•• Greater ConvenienceGreater Convenience

•• Cuts labor costs, frees shelf spaceCuts labor costs, frees shelf space•• SingleSingle--serve portionsserve portions

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Platform Innovations that Respond to Consumer Needs

Shelf impactImpulse Buy

Brand RecognitionRetail MarketingHealthy Eating

ConvenienceOn the go!Ease of useTime Saving

Durability/Tear Res.Stacking Strength

Source Reduction/CostReduction/Sustainability

Retail Marketing

FreshnessExtended Shelf Life

Sustainability

Increased SalesBrand Exposure

ConvenienceSustainable OptionTr

ends

Winning atRetail

Microwave Strength Barrier New Age Beverage Dispensing









Brand BlurConsumer Purchasing Trends


Accidental Purchases1. 70% of consumers have purchased the wrong product in the past year2. 60% have trouble differentiating products on shelf due to packaging

Call In Number: 1 (866) 528-2256Participant Code: 458-7536


Source: MediaPost News, October 28, 2009

Brand BlurConsumer Purchasing Trends


Consumers Trading to Store Brands (McKinsey Study, Dec, 2009) 1. 18% of consumers admit to trading to lower-priced brands in the last two years2. 46% of consumers said that these products performed better than expected3. 34% of consumers said they no longer preferred higher-priced products4. 41% of consumers said that while they preferred the premium brand,

it was “not worth the money.”


Store Brand Value growing in the U.S. (in the last year) (2009 Ipsos MORI Study)1. 7 out of 10 shoppers believe that Private Label Products are as good, if not better

than the National Brands2. 40% consider themselves “frequent” store brand shoppers3. 50% of all consumers say that their basket contains 25% or more of store

branded products.

Brand BlurThe Evolution of Store Brands


Private Label is store’s value brand

Budget Alternative

Cheap “Me-Too”

Genuine Competitor

Category Partner

Private Label imitates the brand leaders in an attempt to

Private Label becomes a valid branded offer in its own right, often inhabiting

Together, the manufacturer and retailer take a holistic category management


an attempt to generate a “rub off” effect by association.

own right, often inhabiting a position of strength where manufacturer is weak or the market is fragmented.

category management approach based on deep shopper insights, with total category growth in mind.

Brand BlurThe Evolution of Store Brands


“Many store brands are moving away from the copycats to their own brand identification, and shoppers are now aware


identification, and shoppers are now aware enough of store brand quality that they don’t have to rely on copycat (packaging) for accidental sales.” Brian Rafferty, Brand Union

Brand BlurPrivate Label as Competitor







and how will they find you?


Creating Value On-Shelf



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Packaging as a Critical Component of the Integrated Marketing Mix

On-Shelf DifferentiationCreating TrustEstablishes “Value” (Clarity and Brand Promise)


Establishes “Value” (Clarity and Brand Promise)

Engaging the Consumer in “Real-time” with the Package to Grow EquityTying together the Digital Experience and the Package Experience Creates a “New” Brand Experience

Printing Enhancements to Gain On-Shelf Differentiation




Shape as a Differentiator




New Printing Technologies Become AccessibleHolographic Coatings (Cast and Cure)Metallic Effects (in-line Cold Foil application)




No Coating Cast and Cure







New Tools That Create Brand Value



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Engaging the Consumer in “Real-time” with the Package to Grow Equity.

Tying together the Digital Experience and the Package Experience Creates a


and the Package Experience Creates a “New” Brand Experience



Integrated Mobile Marketing Facts

200+ Million Americans carry mobile phones – over half the country’s population.

Cell phones are used by over 3.1 billion people globally.

40% of Major Brands have deployed text messaging (SMS) campaigns.


40% of Major Brands have deployed text messaging (SMS) campaigns.18% of Major Brands have deployed multimedia messaging (MMS) campaigns.

The Mobile Marketing and Advertising market will be valued at over $5 billion by 2012.

In August 2007, nearly 40 million US Consumers received SMS advertisements, and 12 percent responded to them.



Mobile Marketing Trends for 2010

1. Text message marketing goes mainstream2. Texting will be offered by local media3. Retailers will move beyond mobile marketing to enhance the overall

shopping experience.4. Smartphone applications will create new ways to engage customers.


4. Smartphone applications will create new ways to engage customers.5. Optimized mobile web sites become affordable and customized.



Augmented Reality

Picks up where Virtual Reality leaves off, but without the bulky glasses. At the outset, this technology looks like it will fall into the category of


into the category of entertainment and information to produce things like three-dimensional maps, store locators, travel guides, etc.



Interactive Codes and Two-Dimensional Barcodes

These are all about consumer interaction and giving consumers more opportunities to interact with brands. Participation in Loyalty Programs, Instant redeemable couponing, etc. are all part of the mix.


Key Take-Aways


Key Take Aways


“If people feel a strong emotional connection with a brand, they will remain loyal. But, squeezed by economic uncertainty, that emotional connection


uncertainty, that emotional connection gets tested, strained even. To maintain –and strengthen – this connection through a recession, companies must remain dedicated to building their brand.” Warren Baxter

Stick to Your Long-Term Goals.


Deviating from your brand strategy by running “urgency” campaigns designed to create quick sales may help short-term cash flow, but loyal customers may view

1.


cash flow, but loyal customers may view it as cheapening your offer to the market.

Maintain or Increase Your Marketing Budget.


When the market goes quiet, successful Brands typically increase their presence with strong branding activities.

2.


Be Authentic. Don’t Dilute Your Brand.


Focus your company’s efforts on maintaining or increasing its brand presence in an authentic manner that is consistent with its promise to the consumer. If your

3.


with its promise to the consumer. If your brand is about luxury and exclusivity, offering low-end products to attract more buyers will only decrease consumers’ perceived value of your brand.

Think Beyond Advertising.


Branding covers all of the touch points between your business and your customer, from your direct mail to packaging to website to office and retail

4.


packaging to website to office and retail environment. Every touch point is part of your brand – Consider how changes in your company’s activities and structure may affect your customers.

Deliver on Your Brand Promise.


A recession is an emotional time –consumers need reassurance that they are making the right choices. If your marketing activities create mistrust by

5.


marketing activities create mistrust by under-delivering on their expectations of your brand, consumers may switch to a safer alternative.

Key Take-Aways


“At times like this, people are more particular about where they spend their money. A company’s brand is its promise, as assurance of the best choice – any lack


as assurance of the best choice – any lack of authenticity or failure to deliver on that promise diminishes the brand and has direct financial implications” World Advertising Research Center

Thank You



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Winning The On-Shelf War

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