Cati2005 Christophe Pirotte, Rok Sunko Retailer Manufacturer Cooperation

The retailer – manufacturer cooperation – is win-win possible?

Mojca Avšič, Market research manager, MercatorChristophe Pirotte, FMCG specialist, CATIRok Sunko, project manager, CATI

25/05/2005

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Category management for ...

= hyped trend?

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... achieving greater customer satisfaction

Optimise categories /

assortments according

to consumers’ wishes

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Retailer – manufacturer cooperation

Satisfy the consumer

Based on consumer data

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? IS THIS ENOUGH ?

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Satisfaction on level of ...

Satisfy the CONSUMER

or

the HUMAN BEING ?

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... consumption or ...

Consumption phenomenonenhanced by

- marketing activities

- promotions

- advertisements

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... human being

Relating to needs of INDIVIDUAL

on

Emotional level

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The path to consumption ...

HH or retail data enough?(consumption)or

work on whole path

Usage

Loyalty

Recognition

Consideration

Experience

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... is base for understanding the human being

go-to-market

or

go-to-human being

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Illustration: using only purchase data can be misleading

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Trend 1:Assortment key source of differentiation

Differentiation from

discounters

Selecting the right

SKU’s

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Effect of private labels and exclusive

brands

Prediction ...

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What will happen when purchase

power increases?

Top 1/3 consumers according to revenue

Low 2/3 consumers according to revenue

... and simulation are needed

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-10

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-6

-4

-2

0

2

4

6

8

10

0% 5% 10% 15% 20% 25% 30%

Private labels

Other brands

Laško

Bandidos

UnionLaško Club

* BPI (Brand Performance Index) source: PGM 2004 1st wave

Difference in BPI* Mercator vs. Spar

Average consideration of the brand on the market

Smile

Joint consideration of

Smile, Laško Club and Bandidos is close to Laško’s

-10

-8

-6

-4

-2

0

2

4

6

8

10

0% 5% 10% 15% 20% 25% 30%

Private labels

Other brands

Laško

Bandidos

UnionLaško Club

* BPI (Brand Performance Index) source: PGM 2004 1st wave

Difference in BPI* Mercator vs. Spar

Average consideration of the brand on the market

Smile

Joint consideration of

Smile, Laško Club and Bandidos is close to Laško’s

“Only big brands count” principle is not enough

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Trend 2: Shop formats are a necessity

Re-think assortment

according to

environment

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• Younger population:• Locations close to Universities, schools, in the centers of

the town

• Old people:• Population is aging!

• Countryside:• villages in less developed parts of SEE

• Large packagings, price more important, but they are influenced by TV commercials

Rise of new retail formats for specific segments

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Retailer – manufacturer meet on the same platform

Mercator Data Platform Suppliers

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YES...

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...BUT!!

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...

• Partnership:• unexploited source of sustainable competitive

advantage for BOTH retailer and producer• missing-out opportunities

• CM is more than just satisfying consumer... It is about human-being

• It is also about better understanding of both parts

• Size (as usual) matters

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Thank you

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Product sorting – Focus groups– Understanding categories, subcategories– Brand position / competitors position

Category definition

Category performance

measures

Category strategies

Category tactics

Category role

Category assessment

Plan implementation

PGM – Assess size/ target segment of categories– Cross category analysis

SWOT analysis – PGM – Protocol analysis– SWOT per category– Consumer profiles / purchase behaviour

PGM – Ad hoc research– Optimal perfomance per category– Targeted research to support goal

PGM– Category trend analysis (over time and

over markets)

PGM – Price testing – Advertising research– Promotion (which products, which types)– Portfolio analysis / price elasticity

No research– Retailer draws up a Tactogram

Category review

PGM– Performance

monitoring– Category plan

modification

Solution