1 - Shopper Marketing Manifesto Milan

CONFIDENTIAL

Global Shopper DevelopmentConverting Shoppers into Buyers

The Movement for Shelf Savvy MarketingCapturing the value of our brands by converting shoppers into buyers

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why

what

how

should we evolve? The Movement for Shelf Savvy Marketing

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An expandable beverage market

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x 2+

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A world of growth ahead

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NARTD Value Growth(‘08-’20)

Volume Growth: 4.5%

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More beverage fragmentation

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Sparkling

Stills

Growth

18%

82%

KO Share

50%

7%

Projected NARTD Volume Growth: 2008 -2020

Source: KO Global Strategic Planning

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Changing channel landscape

16,595

4,124 4,315

9,598

12,252

Source: Inform Volume, Share, 2020 Vision Growth Estimates, Euromonitor Channel Distribution

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KO Share Position

+10.3% CAGR in Developing Supermarkets

+7.1% CAGRin Developing Independent

Stores

16% 23% 33% 12% 24%

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More retail competition

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Increasing competitive intensity amongst Big Box retailers

Rapid Expansion to build scale in new businesses

Developing Market

Retail Edition

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Resulting in more …

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Stores

Formats

Products

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Household dynamics are changing

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hours making dinner minutes making dinner

1965 Today

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Driving more “occasion based” shopping trips

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of trips of trips of trips

Pantry Stock Up Fill-In Occasion Based

More Price Sensitive Less Price Sensitive

Sources: Kraft “Capturing Consumer Passion for Food at Retail”

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… with smaller baskets …

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More of these … Less of these …

$20, 20 minutes, twice a week $200, 2 hours, every 2 weeks

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… and low basket penetration

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Category Incidence by Mission – Tesco Pilot Markets

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Most shoppers aren’t coming to us …

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of shoppers visit the beverage aisle

only

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… and they’re making decisions in store

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Today’s shopper needs convenient solutions

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Not Just Ingredients … … A Solution for every occasion

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Based in data …

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powered by

“What” is being purchased

“Who” is purchasing it ... “When”, “Where”, and with “What”

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… and shopper truth

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SAY DO

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Our opportunity:

Capture value … in addition to love

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NARTD Value Share NARTD Preference Share

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MITMontenegro 2012 POKRENIMO

LJETO

MIT

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We Must Inspire People To…

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buyinto

our brands

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And More Importantly To…

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buyour brands

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We have a marked difference in our ability to capture profit from the market

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Mexico

ChileSouth Africa

Brazil

Spain

Australia

Columbia

PhilippinesUnited States

Japan

Turkey

Nigeria

Canada

Italy

France

Thailand

Russia

China

India

Argentina

2009 Profit Capture by Market(System OI as percentage of national GDP)

Great Britain

Germany

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High performance is driven by an integrated system approach

open happiness

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Value creation for stakeholders

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ConsumersShoppers

Customers

Converting Shoppers Into

Buyers Creating Brands

People Love

Collaborating for

Value

Activation

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A great brand …

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ConsumersShoppers

Customers

Brands

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An inspiring creative expression …

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Creating Brands People Love

ConsumersShoppers

Customers

Brands

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Multiple formats, price points, and on-going services …

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ConvertingShoppers into Buyers

ConsumersShoppers

Customers

Brands

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“Shoppable” retail environments …

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Collaborating for Value

ConsumersShoppers

Customers

Brands

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Motivated retail partners …

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Shoppers

Collaborating for Value

ConsumersShoppers

Customers

Brands

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“Shelf Savvy” marketing …

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… designs with the end in mind

Shoppers

Customers

Brands

Consumers

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“Shelf Savvy” marketing …

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Value

Love

… fuses inspiring ideas

… with commercial discipline

… to create value

Brands

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• Design• Brand• Communication

• Portfolio• Merchandising

• Retail Partnership

Tom Ford Domenico De Sole

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Shelf Savvy Marketing fuses …

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Consumer Agenda Commercial Agenda

“What” we sell “Where”, “When”, “How” we sell

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why

what

howdo we make it happen?

The Movement for Shelf Savvy Marketing

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(shelf savvy) marketing converts

shoppers into buyers,

we believe …

!transforming insight into value

at the

shelf

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A tale of two shoppers …

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MikeMaria

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Both have families at home

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Both watch the their favorite shows

38internal use only

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Both are motivated when they shop

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Both go to the same store …

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… but see different thingsMike

Maria

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Both interact with our brand …

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Both spend about the same for a Coke …

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… but get different experiences

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Both create value …

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… but with different economics

volume

pric

e

volume

pric

e

MikeMaria

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We can optimize their experience in four steps …

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DifferentiatingBrand / Pack

Strategy

Activating for Retail Impact

Commercializing with

Customers

Prioritizing Shopper

Opportunities

Picture of Success

Met

ricsM

etrics

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Defining the profit pools

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Strategy



Customers


Opportunities

Picture of Success

Met

ricsM

etrics

• What is the business opportunity?

• How can we best create system value?

• Who is the Shopper?

• How can we best Influence purchase behavior?

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Bringing value to our customers

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Strategy



Customers


Opportunities

Picture of Success

Met

ricsM

etrics

• How can we ensure that the customer is at the heart of all our plans?

• How can we leverage shopper insights to drive value for our customers?

• How can we partner with customers to step change category value creation?

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Creating a differentiated offer

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Strategy



Customers


Opportunities

Picture of Success

Met

ricsM

etrics

• What are the critical channels and occasions?

• What are the roles of the brands and packs?

• How do we capture value from unique occasions?

• How do we differentiate across channels?

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Prompting behavior at retail

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Strategy



Customers


Opportunities

Picture of Success

Met

ricsM

etrics

• Where will displays best prompt purchase?

• How can we merchandise to best create off-take?

• How can we communicate to influence behavior?

• What promotional activities will create value?

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Measuring our progress

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Strategy



Customers


Opportunities

Picture of Success

Met

ricsM

etrics

• Are we converting brand preference into share?

• Are we growing revenue ahead of volume?

• Are we penetrating households with a routine purchase habit?

volume

pric

e

volume

pric

e

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For each element, transforming Insight into Action

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Opportunity Insight

Actio

n

Strategy


Opportunities

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Integrating the parts to define a picture of success

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Strategy



Customers


Opportunities

Picture of Success

Met

ricsM

etrics

Documents

1 - Shopper Marketing Manifesto Milan