Click here to load reader

CHANGING YOUR TRADE PROMOTION TRAJECTORY · PDF file 2019-05-29 · changing your trade promotion trajectory . how to become part of the elite tier of companies that are reversing

  • View
    1

  • Download
    0

Embed Size (px)

Text of CHANGING YOUR TRADE PROMOTION TRAJECTORY · PDF file 2019-05-29 · changing your...

  • CHANGING YOUR TRADE PROMOTION TRAJECTORY HOW TO BECOME PART OF THE ELITE TIER OF COMPANIES

    THAT ARE REVERSING THE PROMOTION TREND

    Doug Bennett February 26, 2015

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    2

    @Nielsen

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    3

    MEET YOUR PRESENTER

    Doug Bennett SVP, Sales Effectiveness Nielsen

  • CHANGING YOUR TRADE PROMOTION TRAJECTORY HOW TO BECOME PART OF THE ELITE TIER OF COMPANIES

    THAT ARE REVERSING THE PROMOTION TREND

    Doug Bennett February 26, 2015

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    5

    PROMOTION INEFFICIENCY IS GETTING WORSE Frequency vs. Return – chicken or the egg?

    Source: Nielsen Trade Promotion Benchmark Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    6

    67% DON’T BREAK EVEN

    33% MAKE MONEY

    ELIMINATING OF PROMOTIONS WOULD INCREASE SALES REVENUE 22%

    THE MAJORITY OF TRADE EVENTS DON’T BREAK EVEN Over the last two years only 1/3 drove positive return

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    7

    DAIRY 75%

    MEAT 62%

    FR O

    ZE N

    F O

    O DS

    66

    %

    GE N

    ER AL

    M ER

    CH AN

    DI SE

    60

    %

    HO U

    SE HO

    LD C

    AR E

    56 %

    GROCERY 73%

    PE RS

    O N

    AL

    50 %

    BAKERY 73%

    PET CARE 66%

    HEALTH 59%

    BEAUTY CARE 50%

    PRODUCE 74%

    DELI 72%

    % OF WEEKS THAT DON’T BREAK EVEN

    OPPORTUNITIES EXIST ACROSS THE ENTIRE STORE Trade promotion effectiveness varies from 25% to 50% across departments

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3 70-75% 65-69% 60-64% 55-59% 50-54%

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    8

    CATEGORY VARIANCE IS SIGNIFICANT Understanding where your business falls is valuable context

    Most Efficient Least Efficient

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Trade Efficiency < 0

    Trade Efficiency >= 100

    % O

    F CA

    TE GO

    RY E

    VE N

    TS

    LEAST EFFICIENT MOST EFFICIENT

    0 < Trade Efficiency < 100

    ~200 CPG CATEGORIES

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    9

    CATEGORY SIZE DOESN'T DICTATE PERFORMANCE

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    $-

    $2

    $4

    $6

    $8

    $10

    $12

    CA TE

    GO RY

    S IZ

    E ($

    B IL

    LI O

    N S)

    % O

    F CATEGO RY EVEN

    TS THAT DO N

    ’T BREAK EVEN

    ~200 CPG CATEGORIES

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    10

    CATEGORY HEALTH IS NOT DISCRIMINATING Growing and declining categories alike have tremendous variance in efficiency

    Frozen Toaster Pastries

    Yogurt

    Powdered Instant Drinks

    Fresh Poultry

    Frozen Juice

    Sugar Frozen Fruit

    Adult Incontinence

    Fresh Meat

    Pet Medicine

    $(1.00)

    $(0.50)

    $-

    $0.50

    $1.00

    $1.50

    $2.00

    -20% -10% 0% 10% 20% 30% 40%

    % CHANGE IN CATEGORY SALES

    CATEGORY TRADE EFFICIENCY

    INCREASING SALES DECREASING SALES

    LEAST EFFICIENT

    MOST EFFICIENT

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    11

    OVER-PROMOTING DILUTES EFFICIENCY Scrutinize purchase frequency, expandable consumption, and storability

    51% 45%

    36% 30% 29% 28%

    % O

    F EV

    EN TS

    T HA

    T BR

    EA K

    EV EN

    % OF WEEKS ON PROMOTION

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    12

    SELECTIVELY UTILIZE DEEP DISCOUNTS More than 25% of promotions on deep discount significantly degrades ROI

    37.0% 40.8%

    53.2%

    60.6%

    74.3% 69.0%

    100%50-100%25-50%5-25%0-5%0

    Average Category Trade Efficiency

    % OF TOTAL EVENTS PROMOTING DEEPER THAN 25% DEPTH OF DISCOUNT %

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    13

    YOUR FATE IS NOT SEALED Categories improved their performance by applying optimal strategies

    Baby Formula

    Coffee

    Hair Coloring Cat Litter

    Fabric Softener

    Shampoo and Conditioner

    Frozen Pizza

    Fresh Sausage

    Pie Filling

    Ice Cream

    Soft Drinks

    Frozen Toaster Pastries

    Breading & Stuffing

    Hot Cereal

    Facial Tissue

    Prepared Beans

    Cream Cheese

    Yogurt

    -8%

    -6%

    -4%

    -2%

    0%

    2%

    4%

    6%

    8%

    10%

    20%30%40%50%60%70%80%90%100%

    Seizing Opportunity: High Efficiency and Improving

    Becoming Winners: Inefficient but Improving

    Off Course: Efficient but Getting Worse

    Missing Opportunity: Inefficient and Getting Worse

    PO IN

    T CH

    AN G

    E IN

    B RE

    AK E

    VE N

    W EE

    KS

    % OF WEEKS THAT DON’T BREAK EVEN

    Source: Nielsen Trade Promotion Landscape Analysis 2014 Q3

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    14

    4 FUNDAMENTAL EXECUTION OPPORTUNITIES

    STRATEGIC PLANNING VS. TACTICAL PLANNING Setting guardrails @ HQ and executing at retail consistent with the strategy

    PROMOTION PLAN MANAGEMENT AND EXECUTION Tools don’t “talk” to each other

    MANAGEMENT PROCESS Break the cycle of ad-hoc execution and siloed management

    MEASUREMENT CHALLENGES Disparate data sources/measures/dates, must do events vs. discretionary

  • Co py

    rig ht

    © 20

    15 T

    he N

    ie lse

    n Co

    m pa

    ny . C

    on fid

    en tia

    l a nd

    p ro

    pr ie

    ta ry

    .

    15

    4 FUNDAMENTAL EXECUTION OPPORTUNITIES

    STRATEGIC PLANNING VS. TACTICAL PLANNING Setting guardrails @ HQ and executing at retail consistent with the strategy

    PROMOTION PLAN MANAGEMENT AND EXECUTION These tools don’t “talk” to each other

    MANAGEMENT PROCESS Break the cycle of ad-hoc execution and siloed management

    MEASUREMENT CHALLENGES Disparate data sources/measures/dates, must do events vs. discretionary

  • Co py

    rig ht

    © 20

    15 T

    he N

Search related