Kraft Foods
at Walmart
Partnering with
Walmart to Build
Kraft Brands
March, 2009
Customer Marketing Best Practices
1. Collaboration and retailer understanding
Strong collaboration between manufacturer and retailer ensures that the needs of both
are met and results in mutually beneficial and actionable programs
2. Meeting retailers goals and initiatives
The most successful programs leverage manufacturer and retailer equities and assets,
address the retailer’s key initiatives, and deliver on the retailer’s marketing priorities.
3. Retailer differentiation and added value
Retailer-specific solutions strengthen shopper loyalty by creating value for the retailer and
shoppers. Manufacturers can help the retailer better understand shoppers’ needs by
sharing and applying research and insights from their respective categories.
4. Retailer specific solutions based on shopper insights
The most relevant solutions come from understanding how demographic and lifestyle
trends and the changing needs and attitudes of consumers effect shopping behavior.
5. Effective in-store execution and measurement
Developing a cross-functional team and working closely with marketing and operations
helps ensure flawless execution. Formalizing objectives and setting evaluation metrics for
measuring program performance is essential for evaluation and evolution.
2
Walmart’s Marketing Programs are Based
on 3 Beliefs:
1. Save Money, Live Better is a key principle from Sam Walton
that is relevant today
2. “Brand Aspirationals” are the core growth consumer
Looking for good brands at great prices
3. Food & Beverage is a key growth opportunity
3
Understanding the Grocery Opportunity
• Food and beverage is a key conversion opportunity for Walmart,
as it brings in more shoppers with greater frequency, and
attracts a greater share of their spending than other
merchandise categories
• Walmart is experiencing success in the current economic
downturn, as consumers spend more of their food dollars at
Walmart Supercenter
• The key to sustaining this success is to develop solutions-based
programs to meet shopper needs
4
Leading with Food & Beverage
• Food is a frequent destination category that can be leveraged to drive
cross-box shopping
• Compared to other merchandise categories offered at WMSC, Food &
Beverage brings in more shoppers, with greater frequency and attracts
a greater share of Walmart spending
5
Share of
Shoppers
Share of
Trips
Share of
Dollars
Food & Beverage
94%
80%
62%
22%
General Merchandise
87%
35%
13%
10%
Health & Beauty
86%
40%
13%
12%
Non-food
87%
44%
13%
13%
Trips / HH
Following Grocery Division Principles
• Price Image
– Value
– Prominent displays with clear pricing signage
• Provide solutions delivering consistent platforms that meet shoppers’
needs
– Meal Solutions
– Health & Wellness
– Seasonal
• Align with In-Store Presentation
• Advertising focused on affordability and “saving people money in the
shopping basket”
• Clarity of Offering
– “Good, Better, Best” in ranges
• SKU rationalization helps shoppers navigate through the store (average shopper spends
21 minutes in WMSC)
– Aligned with solution
• Seasonal Opportunity
– Consistency in packaging (i.e. Halloween)
– Blocks of products with common price points
6
Developing Successful Marketing
Programs
Foundational
Insights
Platform
Development
In-depth Research
Program
Concept
Ideation
Concept
Testing
Among
WM
Shoppers
Walmart Touch Points Integrated Throughout The Process
7
Refined
Program
Elements
Execution
Focusing on Shopper Segments with the
Greatest Growth Potential
• Common thread among key shopper segments at Walmart is that they are all
value driven – best opportunity for mutual growth is with Brand Aspirationals
Price Value Shoppers
• Younger, family households
• Many unemployed and/or
homemakers
Lifestyle & Attitudes
• Traditional values, family a top
priority
• Live paycheck to paycheck,
many have experienced
financial crises
• First to cut back when times
are tough
8
Brand Aspirationals
• Mature households, only 1/3
have kids at home
• Less affluent and educated
Lifestyle & Attitudes
• Brand-conscious, they seek
brand name products
– Trust brands for quality
– Simplifies shopping
• Not loyal to any retailer
• Shop wherever they need to,
to get desired brands within
budget
Price Sensitive Affluents
• Mature, empty-nester HHs
• Educated, affluent, employed
Lifestyle & Attitudes
• Time-constrained, never have
enough time
• Pride themselves on being ‘smart
shoppers’, getting the best deal
whatever it takes
• Social and community-involved
• Focused on financial security
Meeting Walmart Shoppers’ Needs
• Walmart Shoppers are concerned about the economy and are changing
their behaviors accordingly
– Preparing more food at home - cooking and eating at home, eating
leftovers, brown-bagging
– Staying home more - entertaining at home more now vs. going out
• Walmart Shoppers have some key needs that have been around for a
while, and there is new news on each:
– Convenience: Needs expanding as consumers adapt to economic
hardship, but time pressures still present
– Quality: Staying at home more, entertaining at home demands
quality brands and experiences
– Health & Wellness: Shoppers seek to achieve health & wellness
goals within constrained budgets
• Walmart Shopper Segments are all value-driven, for different reasons
– Shopper Marketing programs must meet the unique needs of each
segment by offering value to help build loyalty
9
Shoppers Say Walmart is Ideally Suited
to Provide Solutions
“They stand for convenience and low price and this is just
the next logical evolutionary step in their growth.”
“They are really geared towards
families and making things easy …
you come here and everything
you need is in one spot.”
“Because you depend on Walmart for convenience and
you need their help … I need these ideas.”
“People are coming to shop in bulk … meal ideas would give
more people a reason to come to Walmart …”
10
Walmart Shoppers Need Convenient Meal
Solutions
My Ideal Meal Solution Has …
My Challenges …
Limited Time to Shop, Prep and Cook
“People get home, and don’t want to spend 3
hours cooking. I need ideas requiring just a few
ingredients.”
Need Creative Ideas
“I’m tired of eating the same old boring thing …
my kids say, Mom, can we eat something
different?”
Lack Cooking Skills
“You don’t think about making a kabob because it
seems such a fancy, big presentation, but they
look so easy to put together …”
11
Creative
Meal
Ideas
Quick &
Simple,
Convenient
Easy
Shopping Preparation
Ideal
Meal
Solution
Program
If I see an idea, I am likely to buy
the ingredients and try it
I like it when stores offer quick,
easy meal ideas
Always looking for easy meal ideas
I'd like great-tasting, low effort,
"homemade" meals
Q: How strongly do you agree or disagree …? (Top 3 box %- 1-10 scale)
Walmart Shoppers are Concerned About
the Economy
• Walmart Shoppers are adjusting their behaviors in tough economic times
• Compared to other consumers, WMSC shoppers are more likely to…
– Say their financial situation has “gotten worse” in the last year
– Be “extremely concerned” about the economy
•Overall
“Within the past 3 months how has your
spending changed?”
90% have cut back on non-essentials
49% stick to a budget
•At Home
59% use AC/heat less
4% have moved to a less expensive home
Spending More
or
No Change
Cutting
Back On
Spending
28%
•Dining
86% eat at home more
42% eat at less expensive restaurants
•Leisure
72%
38% entertain at home more vs. go out
32% have stopped taking vacations
25% rent movies vs. go to the theatre
•Driving
9% have sold their car/bought more fuelefficient car
5% are carpooling
12
Walmart Shoppers Are Finding Ways to
Make Meals More Affordable
• Making meals more affordable by sourcing food at home is a key
strategy for stretching budgets
Among WMSC Shoppers…
13
74%
say they have avoided going out to eat and
ordering in carry out food over the past
three months*
65%
look for recipes that fill up the family for
less
81%
say they are making meals that provide
leftovers
68%
are brown-bagging lunch
76%
limit the purchase of non-meal food items
(e.g., vending, c-store, movie theatre, etc.)
”We're eating out less so
we can afford to buy
groceries.”
” Packing lunches for school
and work has saved us a lot of
money. Also, making meals
from scratch enables us to save
more.”
” I tend to make foods
that are good as
leftovers, spaghetti,
things like that... in
larger quantities.”
Walmart Shoppers Seek Ideas While Inand Out-of-Store
• In keeping with their value-consciousness, Walmart Shoppers are
significantly more likely to review sale items in a store circular or ad
In-Store
71% look at store
circulars in-store to
plan shopping trip
63% look in the store
for affordable
solutions to meal
planning
Out-of-Store
90% of WMSC Shoppers look
at store circulars received by
mail or in newspapers*
74% are spending time
thinking through meals/
menus before shopping
63% look for recipes on-line*
53% look at store circular
deals on-line
58% look on-line for
manufacturer coupons or
other deals*
14
Both In & Out-of-Store
67% are planning meals
around what’s on sale
Meal Solutions Opportunity at Walmart
• Help Shoppers “Save Money, Live Better” by providing AFFORDABLE
solutions focused on convenience, quality and health & wellness from
Kraft and Walmart
• Identify shopper centric marketing platforms that enable Kraft to most
effectively leverage portfolio depth and breadth, creating volume
growth for both Kraft and Walmart
• Build a program to fully meet consumers’ needs by analyzing category
interactions across the store and bringing different categories together
for one stop shopping
• Enhance Walmart’s positioning as a solutions resource with a complete
meal solutions destination that delivers relevant food ideas and
ingredients in a convenient format
15
Kraft’s Meal Solution Equities Bring
Important Advantages
• Vast portfolio of popular American brands, breadth of product portfolio enables
full meal solutions (beverages, sides, desserts, etc.)
Kraft
Walmart
63%
Helps me prepare meals that my family likes
43%
Helps me make meal preparation and
planning simple
62%
30%
60%
Has meal ideas for people like me
Provides simple meal ideas
34%
59%
22%
58%
Gives me ideas for complete meals
Helps me lead a healthy and balanced
lifestyle
Gives me creative ideas for meals
Is a leader for providing meal and recipe
ideas
16
31%
56%
27%
54%
24%
39%
24%
Kraft Brings Strong Meal Solutions
Expertise and Assets
Kraft Kitchens
• Customized, consumer-tested food ideas, including
relevant BFY ideas
• Superb culinary expertise from full-time experts:
– Lever latest food trends and knowledge of food AFH
• New, consumer-endorsed food idea communication
strategy
Marketing Assets
• Customized content in Food & Family magazine
• Digital content on Walmart.com
17
“Simple Mealtime Ideas” by Kraft
• As part of a 2008 CSI, Kraft partnered with Walmart to execute
a Simple Mealtime Ideas program in Walmart Supercenters
• Walmart’s positioning as a solutions resource was enhanced with
a complete meal solutions destination that delivered relevant
food ideas and ingredients in a convenient format
• The promotion was executed July 15th – September 2nd, 2008
and effectively drove significant incremental volume for both
Kraft and Walmart
• Simple Mealtime Ideas was featured in the Seasonal Aisle in
1,700 Walmart Supercenters
• The program included 51 Kraft brands and nearly 200 SKUs
• Products were grouped by breakfast, lunch, dinner, and snacks
18
Simple Mealtime Ideas Program Overview
• Walmart’s Seasonal Aisle was transformed into a destination
area for shoppers to find simple, easy, affordable, and delicious
mealtime ideas using their favorite Kraft brands
• Mealtime ideas aligned with consumer needs across breakfast,
lunch, dinner and snacking occasions
• Merchandising layout provided clarity of offerings across meal
occasions
• In-aisle signage featured Kraft food photography to entice
shoppers
• An integrated 360°communication plan included multiple touch
points to provide strong consistent messaging across tactics
19
The Simple Mealtime Ideas Seasonal Aisle
20
Simple Mealtime Ideas
Integrated
Communication Plan
Print Ads
Sampling Events
PR
walmart.com
Tab
Simple Mealtime Ideas Aisle
In-Store TV Spots
Email Blasts
#MEALS Recipes
Recipe Booklets
21
360° marketing programs are important as Walmart Shoppers
seek ideas for meeting needs both in and out-of-store
Simple Mealtime Ideas Effectively
Reached Walmart Shoppers
• Although they may come into WMSC with ideas and lists, Walmart
Shoppers seek solutions while they are in the store
– Solutions included products and easy, compelling ideas
• Shoppers navigate using signage and products in tandem
– Overhead signage helped direct shoppers when viewing from across
aisles, or from front or back of store
– Looked to endcaps to get an idea of what was in the aisle
• Product selection is key to compelling solutions
– Popular, high-penetration products drew shoppers in
– Products best ‘fit’ with theme
– Mix of complementary items rounded out assortment against theme and
could highlight lower-penetration products
• Clear communication is critical in busy store environment
– Clear, consistent, compelling messages delivered across touch points
– Marketing collateral used to support theme and drive key behaviors –
e.g. recipe cards to serve as shopping list
22
Orchestrated Interaction of Key Elements
to Achieve Success
23
Simple Mealtime Ideas Summary
• This is an example of a promotion recognized by Walmart. It’s a unique
collaborative effort that was carried out flawlessly, and on a scale and
scope that neither company had attempted: the “Simple Mealtime Ideas”
event. Quick. Convenient. Affordable
• The inspiration for this in-store experience started with consumers’
needs
• The display conveniently brought our products together with engaging
photography and delicious recipes to get people cooking
• Easy meal ideas helped families plan breakfast, lunch, dinner or snacks
• Simple Mealtime Ideas was featured in stores across the country for
seven weeks, in total, 66,000 displays each featuring 190 products
• That’s the equivalent of 176 miles of four-foot displays
24
Customer Marketing Best Practices
1. Collaboration and retailer understanding
Strong collaboration between manufacturer and retailer ensures that the needs of both
are met and results in mutually beneficial and actionable programs
2. Meeting retailers goals and initiatives
The most successful programs leverage manufacturer and retailer equities and assets,
address the retailer’s key initiatives, and deliver on the retailer’s marketing priorities.
3. Retailer differentiation and added value
Retailer-specific solutions strengthen shopper loyalty by creating value for the retailer and
shoppers. Manufacturers can help the retailer better understand shoppers’ needs by
sharing and applying research and insights from their respective categories.
4. Retailer specific solutions based on shopper insights
The most relevant solutions come from understanding how demographic and lifestyle
trends and the changing needs and attitudes of consumers effect shopping behavior.
5. Effective in-store execution and measurement
Developing a cross-functional team and working closely with marketing and operations
helps ensure flawless execution. Formalizing objectives and setting evaluation metrics for
measuring program performance is essential for evaluation and evolution.
25