CREATING WIN-WIN
TRADE PROMOTIONS
#Consumer360
CAN 1% MAKE A DIFFERENCE?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Significant investments are made…
COGS
Trade Promo
Dist
Adv
R&D
Trade Promotion is essential for shelf placement, feature & display presence and pricing tactics
#Consumer360
HUGE VARIANCE IN PERFORMANCE AND ROI
PROMOTIONAL PERFORMANCE USING FULL ROI ANALYSIS
1000%
37%
56%
6%
1%
NET INCREMENTAL GSR UPLIFT %
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
800%
600%
400%
200%
0%
-200%
-200% -150% -100% -50%
ROI %
0%
50%
100%
150% 200%
Promotional performance varies widely  Average ROI 11.2%
#Consumer360
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
THERE IS A NEED FOR OPTIMIZATION
Significant
Spend
Unsophisticated
& Unsatisfied
Key
Challenges
• 2nd largest expense in CPG
• 40% of promotions ineffective
• Measuring Trade Efficiency
• 2.5x ad spend
• Out of stocks ~8%
• Retail Execution v Plan
• 70%+ clients unhappy
• Technology Alignment
#Consumer360
Budget Setting
Strategic Optimization and Planning
Baseline Planning
Promotional Planning
Enhanced Strategy Planning
Event Volume Planning
Promotional Evaluation
Fund Management, Accruals
Analytics
Budget & Targets
Shipment Planning
Invoicing Terms
SAP System
Customized pricing comparison at local level
TPO
Modeling
TPM
Post Event
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Pre Planning
CURRENT PROCESS – A NEED FOR IMPROVEMENT
Event Claims
ACTIVATE
#Consumer360
DISCIPLINED PROCESS WINS THE DAY
Strategic
Planning
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Post Event
Analytics
Retail
Execution
Integrated Retail
sales data
leveraged
throughout the
process
Tactical
Planning
Promotion
Management
#Consumer360
LET’S DO THE SIMPLE MATH
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
INDUSTRY
$200B
Trade spend
YOU
$100M
$1M
$500M
$5M
$2B
$20M
#Consumer360
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
WINNING REQUIRES MULTIPLE COMPONENTS
Expertise
Content
Cadence
Scale
Culture
Leadership and domain
knowledge
Descriptive and
predictive
Clear framework &
knowledge path
Evolves with the
market and teams
Embed and
propagate
#Consumer360
8
ONE CLIENT’S STORY TO IMPROVE EXECUTION
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Gaps between Strategies and Tactics
Goal: Improve Promotion ROI
One big pain point
Early wins build
momentum
#Consumer360
9
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
EXISTING TOOLS/SOLUTIONS LEFT GAPS
Multiple
stakeholders
Different
needs
Execution
disconnects
with strategy
SIMPLE
CAN’T ACTIVATE
AT RETAIL
TECHNOLOGY TOO
COMPLICATED
#Consumer360
10
FILLING IN THE DATA GAPS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Improve content and cadence
All Categories
All Competitors
All Customers
…all the time
(In a given category)
(In all geographies)
#Consumer360
11
PROVIDED A SIMPLE TOOL
Expand scale across user groups
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
ONE
Consistency and transparency
Speed to insight
Flexibility to
multiple users
#Consumer360
12
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
A POWERFUL COMBINATION OF TOOLS
#Consumer360
13
LOCAL SALES TRAINING DRIVES ADOPTION
“Right tool to the right stakeholder” expands expertise
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Increasing
collaboration
Field empowered
to make decisions
Simulations relevant to
local marketplace
Users understand
the data
#Consumer360
14
ONE CATEGORY, ONE RETAILER, ONE BIG WIN
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Manufacturer
$12
MILLION
Retailer
8x
ROI
“
Letting the data
guide the
conversation has
given us the
credibility we
need with our retail
partners
”
#Consumer360
CLIENT IS BUILDING UPON THIS MOMENTUM
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
NEW
CONTENT
AND TOOLS
Customer
Influence
Collaborative
Plans
Looking for additional ROI opportunities
#Consumer360
16
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
INTEGRATED TOOLS DRIVE WIN/WIN OUTCOMES
EXECUTE EFFICIENTLY
Retailer P7 Bogo
MONITOR AND ADJUST IN REAL TIME
CASCADE TO TACTICAL
PLANNING
DEFINE AND EVALUATE
A
P7 Bogo
DEFINE ANDRetailer
EVALUATE
A
STRATEGIC PLAN
STRATEGIC PLAN
#Consumer360
17
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
IT’S IMPORTANT TO REALLY UNDERSTAND
“INCREMENTAL”
Promotion Source of Volume
Market Expansion
Brand Switch
Incremental
Volume
New Paradigm
Store Switch
Time Switch
Subsidized Volume
Subsidized Volume
Non – Promoted Volume
Non – Promoted Volume
Past Paradigm
Purchase Behaviors
#Consumer360
18
HIGH
PROMOTIONAL IMPACT FRAMEWORK
Retailer Growth
Mutual Growth
Subsidization
Manufacturer Growth
Retailer Benefit
32%
27%
17%
25%
LOW
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
PROMOTIONAL SOURCE OF VOLUME ENABLES FOCUS
ON MUTUALLY BENEFICIAL PROMOTIONS
LOW
Manufacturer Benefit
Note: Source: Nielsen Promotional Source of Volume Models; 30 category average 2013
HIGH
#Consumer360
19
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
WRIGLEY UNCOVERED DIFFERENCES ACROSS BRANDS &
HOW THEY LADDERED TO PORTFOLIO & CATEGORY VALUE
% Promotion Incrementality to Manufacturer/Retailer
Brand B
++lift
Brand A
Brand C
+++lift
DATABASE VIEW
Brand C
++ lift
Brand B
+lift
Brand A
+++ lift
PSOV VIEW
#Consumer360
20
LET’S PARTNER TO DRIVE BOTTOM LINE RESULTS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
1% is a meaningful start toward greater goals
5% - 10% +
Reduced
5% - 10% +
Rapid
improvement in
trade efficiency
operational costs
and time delays
improvement on
forecast accuracy
time to value
#Consumer360
21
Q&A
#Consumer360