CX Ltd 10.08 0 1 Key trends 2Retail positioning strategies 3M&S brand creation 4Tesco brand...

CX Ltd 10.08

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1 Key trends

2 Retail positioning strategies

3 M&S brand creation

4 Tesco brand evolution

5 The ultimate measures

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Group T/O: €53.7bn

UK food T/O: €30.0bn

UK Grocery market share: 24.2%

Own brand sales value: 48.0%

Key tenets

•Three tier strategy

•Market led sub-brands

•Clubcard data used to ensure stores have the correct own brand overlay to a core branded product range

Tesco brand evolution 4

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Tesco brand evolution 4%

Vo

lum

e

Entry pricepoint yellowpacks

‘Me Too’Brandedlines

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1940

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‘Process Development’

2008

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Customers experience our external BrandValues through the behaviours we display

BR

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A “brand” is a badge of origin and is the company’s most valuable asset.


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0

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1940

1950

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Entry pricepoint yellowpacks

‘Me Too’Brandedlines

H.EatingNatures ChoiceGreen+ Food/Non Food

Standard+Value Lines

Finest

Clear GOODBETTERBEST

% V

olu

me

2008

Sub-brands introduced to reflect customer needs & wants

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Breadth of appeal

Upmarket Midmarket Less Affluent

Finest

Standard Tesco Brand

Value


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Hurdle rate analysis.

Retail Support Tools.

Specs: • Design

manual

• Consumer panel processes

• Legal & Technical

• Supplier Scorecard

• Benchmark policy

• Price police• Merchan-

dising policy

• New

product.• Dev. Brief• Range

Review routine

• Focus groups.• Company

policy

Review all aspects of product & launch to assess the impact of the product & customer acceptance

To make sure that the product reaches the store on time with all of the Point of Sale, merchan-dising plans & promotional needs

To label the product with a design that fits into the Tesco design strategy & is suitable for the product

Ensure consumer accepta-bility & preference v benchmark

To select the right supplier to produce the product to a consistent quality at the correct price.

Make sure that:•The product

has clear

hurdle rates

for sales,

margin

waste, profit

& lifecycle•Benchmark

v brand &

competitor

offers to

ensure leverage at

cost & retail

Decide:• Pillar brand• The

benchmark.• The quality

require-

ments.

Strategy:• Decide on the

range• Decide on

whether the products will add value for the customer

87654321STEPS

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• Three formats – ‘Value’, ‘Tesco Brand’, ‘Finest’

• There must be a clear quality difference between the three.

• By the end of 2004 to accounted for at least 40% of food / non- food turnover in all countries

BRAND STRATEGY

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GOOD STANDARD FINEST

Price Position E.P.P Brand -15-20% Brand +10%, unique

Margin av. 12% av. 35% av. 55%

AV

Volume


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WHAT ABOUT SUB-BRANDSWHAT ABOUT SUB-BRANDS

VALUE TESCO BRAND FINEST

X

HealthyLiving

Gluten Free

Kids

Organic


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Buyer

CategoryDirector

Commercial Director

Retail

Marketing

Choose aProduct Grp

Technologist Identify the

MarketLeader. These

become the Benchmark

Define theRange and Identify

market trendsand

Opportunities

Developownbrand Set Commercial

Targets.

Review thechosenproducts

activity.competitorsCheck the

IDE

NT

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PR

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UC

TS

&O

PPSTEP 2

• Product Development Brief.

• Benchmark routines.• Range Management routines.• Market share data.

If the product:• Cannot increase sales• Cannot increase profit• Not match benchmark quality• Cannot meet the retail price requirements.

Do Not Continue

• Set targets for Sales, Margin, Profit, Volume for the products.• If a product is being delisted calculate the lost sales and profit & decide if the own brand will make more.

• Customer perception of benchmark.• Decide which pillar brand to develop.• Fill in Product Dev Brief.

• Product must have sufficient sales to be relevant to the business. • Include EPP lines.• Decide on the pack size or weight.• The benchmark is the product that has the biggest

• Is there a strong secondary brand.• Do they do their Own Brand.

• Identify the top selling lines in the Grp.• Understand the Brand, i.e., loyalty, dominance & advertising spend

Begin with a Product Group, with sales big enough to make a difference!

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Ref. A.C. Nielsen “style” analysis

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Index versus national comparisons, e.g., dummy dataIndex versus national comparisons, e.g., dummy data

13.0Index 62

74.5 Index 70

4.6Index 107.2

Index 20

5.4Index 50

Bakery Meat Deli Food Non-Food


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Quadrant analysis

Private LabelPrivate Label

150

125

100

75

UNDER DEVELOPED 50

0

LEAST POTENTIAL

AU$ x m

SATURATION

AU$ x m

GREATEST POTENTIAL


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SSTEP 2

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Buyer

CategoryDirector

Commercial Director

Retail

Marketing

Technologist

Financial Funding

Definition ofthe brand /pillar brand Listing/ space

FeesRetailsC

OM

ME

RC

IAL

R

EQ

STEP 3

• Brand strategy.

Decide if you will charge for;• Promotional end space.• Listing cost.• Advertising.• New store opening allowances.• Returns/waste.

Make sure suppliers:• Contribute to cost reductions for promotions.• Contribute to marketing activities.• Contribute to tastings & demonstrations.• Balance the costs with the branded funding, listing support & advertising spend that will be reduced or lost.

• Setting the correct retail is crucial for the success of the product.• Do not undervalue the products, too cheap will give impression the product is poor.• Too expensive & it will not sell.

• Set clear commercial objectives for price sales, volumes & launch date.• Products must meet or exceed financial objectives taking into account lost income on the lower retails compared to the brand equivalent.• To make sure that any new product will grow the total category business.

• Identify price & quality targets.

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Tier 1Tier 1 Tier 2Tier 2 Tier 3Tier 3

RSP v brand

Quality versus brand

B. Margin v brand

Supplier development funding

Listing fees

Promo contribution

Advertising

Returns / waste

NSOA

Guidelines by tier for:

These should balance across tiers by category


STEP 3

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STEP 4

Commercial targets set in Identifying Products section.

• Compare all costs to determine the most competitive.• Make sure that from the costs all financial targets will be met.

Technologist.

Legal Dept.

Product Development Brief.

Supplier scorecard.• Existing supplier list.• Supplier scorecard if a supplier already listed.

• Meet with chosen supplier to agree terms of business.• Agree initial volumes.

Assess the factory for:• Good quality control systems.• Safe production techniques.• Ability to produce to a specification consistently.• Ability to produce & deliver to order, on time.• Volume capacity for future growth.• Ability to label & package the product.

• Fill in the Product Dev. Brief & send out to suppliers.• Compare samples against the benchmark.• Keep approved samples for reference.

Choose the supplier/s from the following determinants:• Commitment to customer & product safety.• Price.• Consistency of quality.• Reliability.• Financial stability.

Short list of potential suppliers from:• Ones supplying already.• Suppliers who have submitted similar product but may not be supplying it.• Branded manufacturers.K

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Buyer

CategoryDirector

CommercialDirector

Retail

Technologist

MarketingSampling

Commercial Key

DeterminantsFactory

Assessment

Supplier

Agreement

Identifying potential suppliers


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• Financially sound• Value• Timeliness• Business awareness• Capacity• Ethical trading policy• USP

Reason to tradeReason to tradeUSPUSP

Standard requirementStandard requirementEthical Trading Ethical Trading PolicyPolicy

Ability to repeat ordersAbility to repeat orders

Cash flow for large ordersCash flow for large orders

CapacityCapacity

Used to dealing with your Used to dealing with your channel to market, type of channel to market, type of businessbusiness

Business Business AwarenessAwareness

On time delivery at each On time delivery at each stage of the processstage of the process

TimelinessTimeliness

Able to meet price & Able to meet price & quality targetsquality targets

ValueValue

Balance sheetBalance sheet

Bank referencesBank references

Scale of businessScale of business

Financial SecurityFinancial Security

BASIC CHECKLISTBASIC CHECKLIST

BASIC

e.g. 50% suppliers20% turnover

• Customer focus• Communication• Flexibility• Mutual importance• Scale• USP x 2!


Technical supremacyTechnical supremacy

Great designGreat design

KnowledgeKnowledge

Track recordTrack record

CommitmentCommitment

USP x 2 fromUSP x 2 from

Credible volumesCredible volumes

Range of product typesRange of product types

SustainabilitySustainability

ScaleScale

Win winWin win

Partnership & dependencyPartnership & dependency

Your production = 20% Your production = 20% -- 70% of theirs70% of theirs

Mutual ImportanceMutual Importance

Lead timeLead time

Support on repeats/ increased orders/ promo’sSupport on repeats/ increased orders/ promo’s

FlexibilityFlexibility

Resourced to respondResourced to respond

AccuracyAccuracy

AvailabilityAvailability

Timeliness of responseTimeliness of response

CommunicationCommunication

Market awarenessMarket awareness

Design & DevelopmentDesign & Development

Success rateSuccess rate

Customer baseCustomer base

Customer FocusCustomer Focus

KEY CHECKLISTKEY CHECKLIST

KEY

e.g. 40% suppliers40% turnover

SUPPLIERS CAN BE CLASSIFIED INTO THREE CATEGORIES: -BASIC-KEY-STRATEGIC

ACCORDING TO CAPABILITY Justifies a significant % of company Justifies a significant % of company

commitmentcommitmentUltimate USPUltimate USP

Potential if not actual Potential if not actual

Longevity of relationshipLongevity of relationship

Cross CategoryCross Category

Design, marketing & technical Design, marketing & technical resources allied to business breadth and resources allied to business breadth and depthdepth

Technical Technical ExcellenceExcellence

Self managing QASelf managing QA

Premium accounts with other retailersPremium accounts with other retailers

Pathfinder rolePathfinder role

High StandardsHigh Standards

MultiMulti--sourcesource

Shared riskShared risk

MultiMulti--productproduct

VersatilityVersatility

Investment in the businessInvestment in the business

Growth strategiesGrowth strategies

Open bookOpen book

Sound ethicsSound ethics

Financially StrongFinancially Strong

STRATEGIC STRATEGIC CHECKLISTCHECKLIST

• Financially strong• Versatile• High standards• Technical excellence• Cross category• Ultimate USP

• Customer focus• Communication• Flexibility• Mutual importance• Scale• USP x 2!


STRATEGIC e.g. 10% suppliers40% business

STEP 4

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STEP 5

Buyer

CategoryDirector

Commercial Director

Retail

Marketing

Technologist 3rd party recruitment of Panellists vQuota sample Results analysed Select type

of panel

Product approved/ failed

Paneltesting

• Stats packages.• Trained Home Economists.

Sensory Analysis guidelines.

• Amend product/retest as necessary.

• Decide hurdle rates in advance.• Results to supplier/buyers.

• Controlled conditions.• In-store consumer kitchens are the ideal.• Collate data on product preparation too.

• Quota sample to reflect target customers.• Exclude employees.• Min 112 panellists.

• 2 or 3 way v benchmark best• Appearance

Texture

Flavour

Overall acceptability• Propensity to purchase.• Frequency of purchase.

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LTesco brand evolution 4

CX Ltd 10.08 0 1 Key trends 2Retail positioning strategies 3M&S brand creation 4Tesco brand...

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Transcript of CX Ltd 10.08 0 1 Key trends 2Retail positioning strategies 3M&S brand creation 4Tesco brand...