The Retail Commission on Shopper Marketing
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- Adelia Harrington
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1 The Retail Commission on Marketing A Framework for Next-Generation Marketing Agenda Welcome & Session Objectives Retail Commission Findings Break Panel Discussion Retail Commission Next Steps 1 2 Today s Objectives Background on the Commission Share the Commission s Key Findings Preview the Collaborative Process Identify Keys To Success THE RETAIL COMMISSION ON SHOPPER MARKETING Hear from Commission Members Commission s Next Steps 3 Define retailer requirements - strategic, operational, organizational to capitalize on the promise of Marketing Integrate Marketing into current business practices Establish new collaboration model for growth & shopper satisfaction 4 Focus Of The Commission s Work Commission Member Companies Retailer The Sweet Spot Manufacturer Strategic Advisor Companies 5 6
2 7 8 Commission History Agenda Fall, 2008 Coca-Cola Company, In-Store Marketing Institute, and TPG identified the need for the Commission April September, 2009 Retail Commission Members met several times October, 2009 First joint session with Strategic Advisor Companies December, 2009 Strategic Advisor Companies met to define organizational capabilities January, 2010 Joint Commission and Advisor Companies developed the Collaborative Process February, 2010 Today Report finalization and preparations for Pilots Welcome & Session Objectives Retail Commission Findings Break Panel Discussion Retail Commission Next Steps 9 10 Commission Findings 1. Current State of Marketing 2. Commission s Marketing Definition 3. Benefits of Marketing 4. Collaborative Plan Development Process 5. Collaborative Manufacturer Partner Involvement 6. Enabling Capabilities 7. Keys to Success Current State of Marketing Definitions and approaches vary Beginning to think strategically about Marketing Product Focus shifting to Focus Segmentation is evolving Key platform for brand support and message consistency Focus on creating enhanced shopping experience Desire for more synergistic consistent solutions through out the store Organizational roles and responsibilities are evolving to enable Marketing Linking of and Consumer Insights to identify new innovative solutions 11 12
3 Survey Responses Marketing Has Evolved To Mean TPG Belief Different Things To Different Organizations Marketing has evolved to mean many different things to many different organizations Survey Responses Brand Marketing at retail Activities and impressions made within the last 3 feet Category Management Plus Merchandising Intensive Next Generation of Co- Marketing In-Store Marketing Plus Marketing to s Marketing Intensive Marketing to shoppers when they are in the shopping mode In-store marketing programs Common Objectives: 1.Attract & Build Loyalty to Store and/or Brand among Targeted s 2.Win the 1 st Two Moments of Truth Where to Shop What to Buy The entire in-store environment fixtures and signage as well as store promotions and ads to drive traffic Our Personal Favorite The Commission s Marketing Principles and Consumer Focused Leverages and Consumer research and insights Retailer Embraced and Enabled Linked to Retailer Marketing and Segment Strategies Delivers Execution Excellence Creates linkage between Category Management and Marketing Driven by a Collaborative and Strategic Planning Approach Linked to Retailer and Manufacturer business plans Delivers Real Value Enhances s in-store and out -of -store experience Creates Efficiencies and Improved Returns More efficient way to reach target 17 18
4 Commission Definition Marketing is the use of insights-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience, and improve business results and brand equity for retailers and manufacturers Survey Responses Benefits of Marketing Loyalty Brand Building Enhanced, more meaningful experience for the shopper Competitive Advantage Increased Sales Retailer Close the gap between buying intention and the action of buying within the shopper Manufacturer Benefits For The A more satisfying and efficient shopping experience Solutions that better satisfy needs both functional and emotional Relevant information and ideas More integrated communications across the shopping cycle Benefits For Retailers More satisfied and loyal shoppers Enhanced and differentiated shopping experience Retailer brand development and enhancement Leverage manufacturer collaborative relationships Common focus on the shopper across functions Improved business results Increased value 23 24
5 Benefits for Manufacturers Collaborative Marketing Alignment with customer objectives More efficient programs with higher ROI Increased brand equity and loyalty Improved business results Retailer Strategic Foundation Core Work Core Work Supplier Strategic Foundation Key Enablers Marketing Plan Key Enablers Marketing Plan Development Marketing Plan Development The Commission said the process should: Provide a common approach Be Collaborative Comprehensive yet not exclusionary Not be over template-ized Provide a framework for aligning objectives between retailer and the manufacturer partner Marketing Plan Development Strategic Context Development What are the company objectives and strategies (Corporate, Banner, and Department)? What is the rationale for these objectives and strategies? How do you measure success? What are the applicable policies and guidelines? 29 30
6 Strategic Context Development Marketing Plan Development Retailer Inputs Corporate Strategies Division Strategies Department Strategies Tactical Business Strategies Pricing Promotion Product Mix Merchandising / Way Finding Customer Service Operations Strategic Context Development Manufacturer Inputs Corporate Strategies Business Unit Strategies Category / Brand Strategies Customer Management Strategies Innovation Strategies Strategy Clarity Key Questions Policy Clarity Success Measurement Strategic Alignment Strategic Alignment What are the shopper segments? What is important to these segments? How valuable are these segments to the organization? How do these shopper segments align with key manufacturer targeted shopper segments? Which segments deserve priority and why? What are the key expectations of the target shopper segments? What is the strategy that will satisfy that expectation? Retailer Inputs Insights & Behaviors Segmentation, Value, and Opportunity Gaps Segment Expectations Segment Objectives / Role Key Questions Strategic Alignment Segmentation Segmentation Alignment Segment Valuation & Prioritization Expectation Identification Expectation Satisfaction Assessment Manufacturer Inputs & Consumer Insights Target Consumer Target Segment Customer Opportunity Gaps Consumer Insights Insights Marketing Best Practices Strategy Creation Segment Alignment Expectation Identification Segment 1 Segment 4 Segment 5 For each prioritized segment, the retailer will establish a Segment Objective / Role. Must Win Preferred Provider Select Set Provider Offering Value Shopping Delight Trust Value Offering Shopping Delight Community Offering Shopping Delight Community Trust Aligning consumer and shopper targets allows common objectives to be achieved. Community Trust Value 35 36
7 Marketing Plan Development Platform Development What are the key insights? What are the Platform objectives? Who are the targets of the Platform? What are the potential Platform ideas? How will results be measured? Platform Development Behavior Cycle Retailer Inputs Insights Marketing Strategies High Affinity Categories / Brands Manufacturer Segmentation Marketing Framework Platform Evaluation Criteria Platform Development Manufacturer Inputs Consumer Insights Insights Brand Strategies Brand Equity Expectations Brand Treatment Criteria Identify the desired target shopper behavioral changes within the context of the Behavior Cycle How can we understand and influence a Express Consumption Behavior? Evaluate Utilize Prepare Exposure Need/Entry Research List How can we understand and influence a Planning Behavior? Platform Definition Install/Store Key Questions Platform Target Identification Purchase Retail Choice Discover/Locate Performance Expectation Development Ancillary Selection Select Convert Review How can we understand and influence a Purchase Behavior? Marketing Platform Example Marketing Plan Development Platform Definition Name: Get Fresh With Us Objective: Drive penetration and frequency in perishables with core and mid-loyal shoppers. Description: Delivering fresh, healthy alternatives that are good tasting and good for you. Key Message / Theme: Our food is so fresh, you ll think we grew it out back Segment(s): Foodies, families, young health-minded couples Platform Target Geographies / Store Clusters: Upscale urban and suburban stores Departments / Categories: Produce Prepared Foods Sales: + 7% Performance Targets & Measures Profit: +10% : Two additional trips per month 41 42
8 Program Development What are the Program Insights? What are the Program objectives? Who are the Program targets? What are the Programs ideas? What are the tactical elements that will be utilized? How will results be measured? How will these elements be deployed? Is the plan delivering the desired results? Program Development Retailer Inputs Platform and Program Scorecard Sales Based Information Based Information Operational Based Information Research Based Information Key Questions Program Development Program Definition Program Target Identification Performance Expectation Development Manufacturer Inputs Research Based Information Sales Based Information Brand Tracking Information Operational Based Information SM ROI and Budgeting Performance Analysis Performance Gap Resolution Program Tactics Development In defining the Program, we will be more specific in terms of the tactical elements. The Path To Purchase model provides a good construct. Path To Purchase Source: Various Note: Store refers to physical and internet based Program Scorecard Example Commission Findings Current State of Marketing Commission s Marketing Definition Benefits of Marketing Collaborative Plan Development Process Collaborative Manufacturer Partner Involvement Program scorecards will vary. However, effective scorecards should be balanced and contain some conventional measures used to evaluate business performance. Enabling Capabilities Keys to Success 47 48
9 Survey Responses Collaboration Collaborative Manufacturer Partner Involvement Many early collaborative relationships have been ad hoc Capabilities vary but many beginning to get it. Strategic Framework Segmentation(s) & Insights Targeting Marketing Strategies Strategic Most successful collaborations: Based on willingness to be flexible Fully leverage collective capabilities to act upon consumer / shopper insights Clarity of objectives and measures of success Platform Program Level 3 Partner Level 2 Partner Level 1 Partner Tactical Marketing Key Enablers Manufacturers Strategy Key Observations Strategy Framework Vision & Commitment Strategic Plan Channel & Customer Segmentation Consumer / Segmentation Innovation Information, Insights, & Measurement Market & Channel Insights Consumer & Insights Collaborative Information Sharing Tools Scorecard Best Practice Manufacturer Companies Process Excellence Marketing Planning Internal Marketing Planning External Integrated Business Planning Category Business Planning Linkage Research Planning Retail Activation Organization Capability Corporate Roles & Responsibilities Customer Interface Roles & Responsibilities Competency & Capabilities Development Career Pathing External Resource Management Clearly articulated Marketing Vision and Strategy Top management commitment Sufficient resource dedication supporting commitment Marketing Strategic Plan part of AOP and integrated with other planning and communicated broadly across the organization Realistic time-lines and results expectations and the importance of long term thinking and expectations Marketing resources focused on channels and customers for greatest brand equity building and ROI Requires mutual benefit for the retailer and supplier Clarity of alignment of target consumer with customer s target shopper Marketing is a key vehicle for differentiation Alignment of brand importance and positioning (equity) between the retailer and the manufacturer
10 Process Excellence Key Observations Organizational Capabilities Key Observations Comprehensive multi-functional planning process must exist integrates the planning and objectives for Marketing, Marketing, Customer Management / Sales Planning process needs to be adaptive to enable different levels of collaboration Marketing programs are often most effective when linked to other Category based initiatives A comprehensive and integrated plan should exist to direct and deploy shopper research efforts Marketing Planning must encompass store level activation Marketing recognized as a key organizational role with appropriate mandate and authority Capabilities need to be deployed effectively at the customer interface Capable Marketers should ideally have experience in Marketing, Research and Customer Sales Marketing is seen as a stepping stone in career advancement versus an ending point Intelligent leveraging of expertise and capabilities of agencies / 3 rd parties can add significant value to Marketing Information Systems & Measurement Key Observations Consumer insights must be made shopper-actionable insights encompass all aspect of the shopping process and drive development platforms and programs Tools are being developed that enable a deeper understanding of all aspects of shopper behavior An agreed to and understood balanced comprehensive set of measures is critical Ability to measure mutual benefit and ROI is essential Traditional sales based metrics are used but must evolve to include brand equity-based measures Marketing Vision & Commitment Example A clear corporate position on the definition, purpose, importance, objectives, and success criteria for Marketing. A clear business case for organizational change and the importance of Marketing to long-term success. Key Elements Best Practices There is a SM vision statement that fits into the overall corporate vision. The vision, which includes a common definition of SM for Vision Statement the organization, was developed with cross-functional collaboration and is communicated throughout the entire corporation. SM is integrated throughout the entire organization (top-down and across organization). Management reinforces its support Senior Management Support and expectations for SM. Investment in SM is sustained based on clear visibility of successes and wins. Organization actively embraces and understands the competitive advantages of a well developed and executed SM strategy. Competitive Advantage Strategy There is a clear decision to extend or enhance brand equity and improve financial business results from the use of SM. There is a clearly defined outcome / payout for the SM strategy. Importance of achieving success with SM is communicated continually throughout the organization. Changes required are actively embraced with a concern for the ramifications of Communication of Importance remaining in the status quo. Message focus is on achieving the corporate goal of achieving or enhancing a leadership position through the use of SM with the organization s brands and categories Marketing Enabler Dashboard Example Component Company Desired Capability Strategy Framework Best Practice Above Parity Parity Below Parity Marketing Vision & Commitment Marketing Strategic Plan Channel & Customer Segmentation Consumer / Segmentation Innovation Process Excellence Marketing Planning - Internal Customer Marketing Planning - External Integrated Business Planning Category Business Planning Linkage Research Planning Retail Activation Organizational Capability Marketing Corporate Roles & Responsibilities Marketing Customer Interface Roles & Responsibilities Marketing Competency & Capabilities Development Marketing Career Pathing External Resource Management Information, Insights, & Measurement Market & Channel Insights Consumer & Insights Collaborative Information Sharing Tools Scorecard 59 60
11 Survey Responses Organizational Structures Manufacturers fear Marketing empowers retailers Differing goals between brands / manufacturers and retailers Costs ROI measurement Industry standards on Marketing and how it is implemented at accounts Fulfilling the Promise Organization understanding, commitment and alignment (internal and external) Common definitions and processes Building the enabling capabilities Investing in the strategic vision versus funding the tactical opportunity Sharing shopper information and insights Implementing the plans Measuring performance What s Required Agenda Welcome & Session Objectives Retail Commission Findings Break Panel Discussion Retail Commission Next Steps Our Panelists Marsh Mark Heckman Vice President of Marketing SUPERVALU Jim Fuqua - Director, In-Store Experience & Marketing Walgreens Amy Wagner Director, Retail Marketing Consumables Walmart Ken Mantel Sr. Director, In-Store Presentation Hershey Phil Stanley Vice President Customer Marketing Johnson & Johnson Chuck Meyer-Hanover Director & Category Development Kellogg s Jamie LaRue - Sr. Director Marketing Agenda Welcome & Session Objectives Retail Commission Findings Break Panel Discussion Retail Commission Next Steps Sara Lee Don Baker Vice President, Pricing & Category Selling Strategies 65 66
12 Retail Commission Next Steps Thank You Pilots Case Studies Final Report Training Share Group 67 68
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