phil dewar, executive director global sales … · 2019-05-29 · .14 base price and promotional...
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PHIL DEWAR, EXECUTIVE DIRECTOR GLOBAL SALES EFFECTIVENESS GROWTH GROUP
신지혜 부장 / [email protected] / 010-3012-0884
점포별 빅데이터 분석 및 프로세스 효율화를 통한 영업 비용 최적화 방향
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TRENDS DEFINING THE MARKETPLACE
FMCG SALES
GROWTH
SLOWING
SPENDING
POWER ON
THE RISE
IMPROVING
CONSUMER
CONFIDENCE
DISTRUPTION
IN RETAIL
CONTINUES
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FMCG IS FINDING IT HARDER TO GROW
1) Nielsen TSR Report (MAT18 ending Feb)
-0.8% TOP 20
-0.8% TOP 50
-1.2% TOP 100
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TRADE SPEND GETTING MORE SCRUTINY
1) Nielsen Scantrack, % Sales Value On Promotion, Y2017
A top driver of sales. But biggest area of waste.
7.6% Trade Expense Change of
Major 50 companies -0.9% Promotion Value Contribution
change in Modern Trade
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ACCOUNT TEAMS ARE ADAPTING ON-THE-FLY
1) Nielsen Survey of those responsible for trade promo and pricing
A recent survey of manufacturers like you found
72%
Frequently
Adjust Plans
33%
Of Trade Spend Is
Unplanned/Reactive
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8 COSTLY TRADE SPEND EXECUTION MISTAKES Based on Nielsen’s decades of experience and thousands of studies….
Not knowing your products’ price
thresholds or “emotional price
points”
Assuming national strategies work
at the channel level
Not finding your best “everyday
price” before focusing on
promotions
Assuming any promotion is a good
promotion
Not having the right tools Ignoring the competition
01
02
03
05
06
07 Not measuring the ROI of in-store
execution activites
Not optimizing assortment & Space
04 08
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A CHANGE IN ONE LEADS TO A CHANGE IN ALL Movements in these elements are inextricably connected, and so must be their planning
KPIs
Assortment Space Pricing Promotion
In-store Execution
S A L E S
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NOT OPTIMIZING
YOUR
ASSORTMENT
AND SPACE
MISTAKE #1
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CONVERGENT TRENDS HIGHLIGHTING THE IMPORTANCE OF RANGE & SPACE
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+15% IMPROVEMENT
IN SALES FROM LAYOUT CHANGE ALL ON “ EYE-LEVEL” WAS NOT
THE BEST SOLUTION
SHELF PRINCIPLES RESULTS
SMALL CHANGES CAN YIELD SIGNIFICANT SALES Linking execution to sales data generates the case for negotiation
1) Nielsen Assortment Analysis, USA
DRIVING REAL GROWTH
THROUGH ASSORTMENT
12.0%
6.5%
7.9%
Implemented NotImplemented
Banner
151 index versus Banner where
executed, 82 where not
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YOUR BEST
EVERYDAY PRICE
BEFORE
PROMOTING
MISTAKE #2
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USE ELASTICITY TO GUIDE PRICING STRATEGY
The measure of volumetric
impact of price changes
Understand relative
sensitivities of your products
to quantify impacts and
determine opportunities to
take pricing action
WHAT IS PRICE ELASTICITY? HOW CAN IT HELP ME?
-1.5
%
+1.0%
-1.50 Elasticity
Vo
lum
e S
ale
s
Price
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BASE PRICE AND PROMOTIONAL PRICE ELASTICITY Taking Various Action per Positioning
Profit Driver Increase Base Price,
Invest in frequent, shallow promos
Invest in base price or promotional
depth to drive volume
Invest in lower Base Price, Reduce
promo investment
Increase Base Price, Invest in Depth of
Promotion
Base Price Elasticity from Low to High
Dis
co
un
t P
rice E
las
ticit
y f
rom
Lo
w t
o H
igh
HIGH-LOW OPTIONS
HI-SHALLOW EDLP
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NOT KNOWING
YOUR PRICE
THRESHOLDS
5.00
MISTAKE #3
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6,000
7,000
8,000
9,000
10,000
11,000
$4.50 $4.60 $4.70 $4.80 $4.90 $5.00 $5.10 $5.20 $5.30 $5.40 $5.50
Price Elasticity $5.00 Threshold
PRICE THRESHOLDS, CONCEPTUALLY Price Thresholds are those “emotional” price points; when a price change crosses these prices we see
a greater than expected change in volume
Volu
me
Price
When crossing over the $5.00
price threshold, sales decline at
an accelerated rate
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KNOWING YOUR THRESHOLDS CAN SAVE YOU $ The same $0.10 price increase when crossing the $5.00 threshold can lead to more than 4 times the
loss in volume
-11.8% -11.0%
Unit Sales Retail Dollars
$4.89 to $4.99 $4.99 to $5.09
-2.7% -0.8%
Unit Sales Retail Dollars
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IGNORING THE
COMPETITION
MISTAKE #4
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WHEN TO MANAGE PRICE VS. COMPETITION When competitive interaction drives elasticity, be more reactive with price
-4%
-8%
-18%
Category PriceChange
Price ChangeFollowing Comp
Isolated PriceChange (leader)
-0.37 -0.32 -0.89 Med 8oz
Own Internal External
Regular Price Elasticity
10% 7% 3%
Med 8oz
Med 12oz
Hot 12oz
Cold 8oz
Private Label Hot 8oz
Private Label Med 8oz
Volume Impact of 10% Price Increase
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ALL PROMOTIONS
ARE GOOD
PROMOTIONS Display Feature TPR
MISTAKE #5
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ALL PROMOTIONS ARE NOT CREATED EQUAL Target your top volume drivers to maximize promo efficiency
Price Discount END GIFT with Purchase Feature Total Event Lift
Event Lift Contribution
+54.6% +2.0% +2.6%
+52.1% +111.3%
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WHAT LEVERS CAN YOU PULL TO MAXIMIZE YOUR
PROMOTIONAL EFFICIENCY?
47.8%
41.7%
13.8%
6.5% 2.4%
Feature & Display Feature Only Display Only End Gift With purchase
Promotional Lift
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REDUCE THE CANNIBALIZATION TO MAXIMIZE YOUR
PROMOTIONAL EFFICIENCY
A
B
C
2015-10-11 2015-11-22 2016-01-03 2016-02-14 2016-03-27 2016-05-08 2016-06-19 2016-07-31 2016-09-11
2015-10-11 2015-11-22 2016-01-03 2016-02-14 2016-03-27 2016-05-08 2016-06-19 2016-07-31 2016-09-11
2015-10-11 2015-11-22 2016-01-03 2016-02-14 2016-03-27 2016-05-08 2016-06-19 2016-07-31 2016-09-11
Catalogue End TPR
1) Nielsen PnP Analysis, Korea
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NATIONAL
STRATEGIES
WORK AT THE
CHANNEL LEVEL
MISTAKE #6
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SEVERAL FACTORS AFFECT SHOPPER DECISION
Inelastic Elastic Moderate
0 -1 -1.5 -2.5
Loyalty and Brand Awareness
Purchase cycle
Depth and Frequency of Discounts
Follower Leader
Low High
Short Long
High Low
Assortment Narrow Wide
Substitution Potential Overlap with other segments / Categories
Low High
Brand Positioning in the Category
Type of Purchase Impulse Planned
Always Never Published Price
Very Elastic
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40%
34%
22%
TAILOR STRATEGIES TO AVOID VOLUME LOSS
Promo Volume Promo efficiency
(incremental/promo)
HYPERMARKETS SUPER
A
B
C
54%
72%
75%
28%
18%
19%
19%
9%
5%
Incremental sales Subsidized sales Regular sales
29%
19%
28%
Promo Volume Promo efficiency
(incremental/promo)
41%
61%
54%
42%
31%
33%
17%
7%
13%
1) Nielsen PnP Analysis, Poland
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te. NOT MEASURING
THE ROI OF IN-
STORE
EXECUTION
ACTIVITIES
MISTAKE #7
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SALES IMPACT VARIES BY ACTIVATION LEVEL
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AND INSTORE LOCATION..
HYPERMARKETS SUPERS
208%
160%
121%
93%
63%
55%
21%
100%
13%
16%
7%
29%
8%
8%
19%
100%
Pallet
SRP(shelf ready pallet)
-branded Coke
Cooler-refrigerated Shelf
Floor-stand-rack
Cooler-check out (small well)
SRP(shelf ready pallet)
-other
Cooler-refrigerator Show
Case 1 Door
AVERAGE OVERALL
228%
161%
86%
66%
58%
55%
19%
100%
15%
16%
19%
12%
15%
15%
9%
100%
Pallet
SRP(shelf ready pallet)
-branded Coke
Floor-stand-rack
SRP(shelf ready pallet)
-other
Cooler-refrigerated Shelf
Cooler-check out (small well)
Cooler-refrigerator Show
Case 1 Door
AVERAGE OVERALL
1) Nielsen Instore Execution Study, Italy
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NOT HAVING THE
RIGHT TOOLS!
MISTAKE #8
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CHOOSING THE RIGHT TOOLS CAN EMPOWER YOUR
TEAM TO TAKE CONTROL OF MAXIMIZING THEIR
TRADE EFFICIENCY
THINGS TO CONSIDER …
USABILITY
SPEED TO INSIGHTS
GRANULARITY
CATEGORY VIEW
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HOW WE CAN HELP YOU?
ARCHITECT THE STRATEGY
Define the right strategic price
and promotion guidelines for
your brands
ACTIVATE LOCAL PLANS
Translate guidelines into joint
business plans that maximize
win-win outcomes
ADAPT TACTICS
Respond quickly and
effectively to new pressures,
opportunities and threats
Powerful Price and Promotion Analytics
In-store Measurement linked to Sales Performance
Subject Matter Experts to Help You
This artwork was created using Nielsen data.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
PHIL DEWAR, EXECUTIVE DIRECTOR GLOBAL SALES EFFECTIVENESS GROWTH GROUP
신지혜 부장 / [email protected] / 010-3012-0884