2008

Mag. Aleksandra Kregar Brus

Marketinški fokus, september 2008

AGENDA

• New dimensions in business space

• New role of marketing

• The concept of strategy

• DK group: Corporate strategy – business strategy – brand strategy

• Mindset transformation

THE WORLD IS CHANGING

• E-economic growth

• market evolution

• shifts in consumer tastes

• social changes

• political events

• huge discontinuities

• outsourcing

• geographic proximity is not essential

for working together

• chaos, speed

• complexity, big money

• self interest:

LIFE IN ALL INDUSTRIES REMAIN DIFFICULT

• Mature industry

• High-tech industry

• Global industry

• Strong brands in companies portfolio

• Consumer trends and lifestyle changes

• Tough raw materials environment

(NEW) COMPANY & MANAGEMENT PRIORITIES

• people

• management developement

• growth

• profit

• shareholder value

• new markets entrance

• regional contribution

• consolidation

• corporate governance

• ROA, ROE, ROM

• risk management

AGENDA

• New dimensions in business space

• New role of marketing

• The concept of strategy

• DK group: Corporate strategy – business strategy – brand strategy

• Mindset transformation

MARKETING?

VBM

EVA

CVA

EBIT

EBITDA

DCF

CM

NOPAT

COGS

Cash flow

WACC

CE

ROIC

ROCE

EPS

ROA

ROE

ROI

ROS

EMOTIONS

SHIFTS IN BUSINESS ENVIRONMENT

• retail CONSOLIDATION

• media FRAGMENTATION

• consumers / shoppers DEMANDS MORE

FIND “THE BUY BUTTON”

“Shopping center?”

AGENDA

• New dimensions in business space

• New role of marketing

• The concept of strategy

• DK group: Corporate strategy – business strategy – brand strategy

• Mindset transformation

STRATEGY IS ABOUT CHOICE

Where to compete?

How to compete?

Company earns return on its capital that exceeds the cost of its capital

LEVELS OF STRATEGY

Source: Grant R., 2005

R&D R&D

HR HR

MARKETING MARKETING

FINANCE FINANCE

PRODUCTION PRODUCTION

CORPORATE

STRATEGY

FUNCTIONAL

STRATEGIES

BUSINESS

STRATEGY BRANDS STRATEGY

CATEGORY A CATEGORY B

OWNERS,

TOP MANAGEMENT

TIMESCALES

VISION

STRATEGY

PLAN

10 - 20+ years

3 - max 5 years

1 year

INDUSTRY

ATTRACTIVNESS

Which industry

RATE OF RETURN should we be in?

ABOVE THE

COST OF CAPITAL

How do we make money?

COMPETITIVE

ADVANTAGE

How should we compete?

source: R.Grant

HOW DO WE MAKE MONEY?

CORPORATE

STRATEGY

BUSINESS

STRATEGY

AGENDA

• New dimensions in business space

• New role of marketing

• The concept of strategy

• DK group: Corporate strategy – business strategy – brand strategy

• Mindset transformation

STRATEGY DIMENSIONS

1. Category / brand / product

3. Distrib. channel2. Geogr. market

DK group STRATEGY HIERARCHY

DK group

management

Business units

Business units

Business units

Level 1

Level 2

Level 3

phase 1

phase 2

Level 4

CORPORATE STRATEGY +OBJECTIVES

CATEGORY STRATEGIES + OBJECTIVES

BRAND VISION + STRATEGIES

FIRST YEAR DETAILEDIMPLEMENTATION PROGRAM

SITUATION ANALYSIS

GOALS

SEGMENTATION - TARGETING

GROWTH STRATEGY - Must win battles

BOTTOM LINE- financial projections

SITUATION ANALYSIS

GOALS

SEGMENTATION - TARGETING

BRAND PLATFORM - BRAND VISION

5 P

RESOURCES ALLOCATION

BOTTOM LINE- financial projections

Product Categories’ Strategic Positioning

Competitive Strength

Market Attractiveness

Spices (Evo)

Soups

(Argo)

1

8

Instant

Coffee

Espresso Coffee

Turkish Coffee

Tea

PatéSoft

Drinks

Bottled Water

Cereals

(ZP)

Functional

BeveragesConfectionery

Savoury

Snacks

Cereals

(Coko)

Spices

(Maestro)

Pres. Veg.

(Droga)Salt

Baby

Food

Spices (Evo)

Soups

(Argo)

8

CORPORATE DK portfolio – build the strategy on our strenghts

CATEGORY STRATEGIES - go for regional reach

I. Situation analysis

II. Category / sub - category vision, goals and strategy

III. SegmentationTargetingPositioning• Identify groups of similar customers and potential customers

• Evaluate the segments (size and growth)

• Choose which segment to target

IV. Implemetation

• Clear decisions on Must-win-battles

• Define Strategic trusts & key actions

• KPI

• Financials – bottom line

I. Situation analysis� Consumer behaviour� The competitive arena� Dynamics of the market process

II. Develop brand(s) goals and strategy

III. Develop brand platform – brand vision

IV. 5 P� Marketing strategies over the brand / product life cycle

V. Resource allocation� Estimation of investments and other resource needs� Prioritization of investments

VI. Financials – bottom line� Sales projections� Market share evolution� Profit line

BRAND(S) STRATEGY - go for regional reach

Show root strenght• Symbols and values of the brands

Define target group• The person and the situation for which the brand is used (not just demographics)

Show Insight• How the brand can best solve a problem, or create an opportunity for them

Show benefits• The differentiating functional and emotional benefits that motivate purchase

Present reason to believe• The proof the brand offers

Present Values, Beliefs and Personality• What the brand stands for and believes in and its personality

Define discriminator• A statement of your point of difference

Present brand essence• The distillation of the brand's genetic code into one clear thought

BRAND(S) VISION – what do we want our brand to become?

WAYS OF BUSINESS GROWING

• Generating sales growth

• Must win markets

• Strong performance by all categories

• Growing market shares

• Strong brands growing above the markets

• Enchancing mix

• Mix contributing to margin improvement

• Driving margin

• COGS improvement

• Cash generation

• Driving efficiency

• Moving to higher performance

HOW WE DEAL WITH RISKS?

Risk is all about three questions:

� What can happen?

� What would be the result?

� What can be done to minimize the impact?

Risks company face at all stages of company

developement:

� Growth risk

� Innovation risk

� Market risk

� Financial risk

� Team & management risk

Risk categories

� Management

� Technology

� Resources

� External

� Political

� Timing

THE HIGHEST RISK

=

no (clear) company strategy

MARKETING

STRATEGY

ASSESSING

THE RISK

ASSESSING

SV CREATION

Vir: M.McDonald, B.Smith, K.Ward, 2006

AGENDAAGENDA

• New dimensions in business space

• New role of marketing

• The concept of strategy

• DK group: Corporate strategy – business strategy – brand strategy

• Mindset transformation

CHANGE IS POSSIBLE TO MANAGE

� Understand where you are

� Understand where you want to be

� What are the measures for having got there

� Communicate, involve, develop people

� Prepare for the unexpected

TOP DOWN PROCESS

STRATEGIC POSITIONING• Vision / Objectives

• How will we grow?

• How will we compete?

•Who will we serve?

• Brand portfolio

DELIVERING THE VALUE• Segments audit

• Brand management

• Functional alingment

• Portfolio management

TACTICS• Tactical objectives

• Tactical audit

• “4P”

I

M

P

L

E

M

E

N

T

A

T

I

O

N

&

C

O

N

T

R

O

L

HOW TO THINK FASTER & DIFFERENTLY THAN

COMPETITION?

• understand the drivers of change

• stay close to customers and consumers

• have the ability to:

�Anticipate trends

�Forecasting

�Spot trends

�Create environment that let the best idea

GROWTH IS A PROCESS

• CUSTOMER DRIVEN ORGANIZATIONAL CULTURE

• PROFIT IS EVERYBODY’S BUSINESS

• TIME

• CONSISTENCY, RIGOR and DISCIPLINE