CREATING WIN-WIN TRADE PROMOTIONS

#Consumer360

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

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 %

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

DISCIPLINED PROCESS WINS THE DAYStrategic Planning

Tactical Planning

Promotion Management

Post Event Analytics

Retail Execution

Integrated Retail sales dataleveraged

throughout the process

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

LET’S DO THE SIMPLE MATH

Trade spend

$200BINDUSTRY YOU

$100M

$500M

$2B

$1M

$5M

$20M

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

10#Consumer360

EXISTING TOOLS/SOLUTIONS LEFT GAPS

Multiple stakeholders

Different needs

Execution disconnects

with strategy

TECHNOLOGY TOO COMPLICATED

CAN’T ACTIVATE AT RETAIL

SIMPLE

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

12#Consumer360

PROVIDED A SIMPLE TOOLExpand scale across user groups

Consistency and transparency

ONE

Flexibility to multiple users

Speed to insight

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

13#Consumer360

A POWERFUL COMBINATION OF TOOLS

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

#Consumer360

“ ”$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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

16#Consumer360

CLIENT IS BUILDING UPON THIS MOMENTUM

Collaborative Plans

Customer Influence

NEW CONTENT

AND TOOLS

Looking for additional ROI opportunities

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

20#Consumer360

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

Copy

right

©20

12 T

he N

ielse

n Co

mpa

ny. C

onfid

entia

l and

pro

prie

tary

.

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

Q&A