Transcript Cannondale Marketing and Report Sumamry

Improving Your PoweRanking
February 28, 2005
Cannondale Business Overview
Cannondale’s business is organized around generating, organizing, and
delivering insights to improve business performance in the CPG world
Primary Shopper
Insights
Business Solutions
Consulting
ShopperGenetics™
Trade Promotion
Strategy and
Analysis
Benchmarking
ConsumerCepts™
Controlled Store
Testing
Consumer
Marketing at Retail
Best Practices
Benchmarking
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Executional
Applications
RichMix™
PriceRite™
Snapshot™
Ginsu ABC™
Company Confidential
PoweRanking is one of four major Cannondale
surveys a year
FoodService Elite™
Category
Management
PoweRanking™
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Trade Promotion
Company Confidential
The specific goals of the PoweRanking
Identify the best manufacturers and retailers, as evaluated by
their trading partners.
Provide insight into what makes them “the best”.
Define the importance of key metrics between trading partners.
Highlight areas for improvement.
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Company Confidential
PoweRanking Background
Ninth year of the PoweRankings.
Surveys fielded in May/June.
250-400 respondents each year.
PoweRankings released in mid-October.
Percentages reflect “Top 3” ranking in each measure.
“Composite” reflects combined average of 3 “Strategic
Importance” and average of 5 “Business Fundamentals” scores.
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Company Confidential
Measurement Criteria
Strategic
Manufacturers
Retailers
Best combination of growth and
profitability
Projected to be Power Retailers in
the next 15 years
Most important consumer brands
to retailers
Best job of branding their stores
Clearest company strategy
Clearest company strategy
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Company Confidential
Measurement Criteria
Business Fundamentals
Manufacturers
Retailers
Best customer/sales teams
Best category management/buying
teams
Best supply chain management
Best supply chain management
Most innovative marketing
programs.
Most innovative consumer
merchandising programs
Most helpful consumer information
Best retailer with which to do business
Best practice category
management/CMaR
Best practice category
management/CMaR
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Company Confidential
Discussions are conducted with retailers and
manufacturers representing a wide range of perspectives
Stater
Bros.
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Company Confidential
2004 PoweRanking Summary
Manufacturers:
Significant movement among manufacturers versus past several
years.
P&G is ranked highest among manufacturers.
DSD companies in retreat.
Non-food companies and Nestle gaining ground.
Retailers:
Continued non-grocery strength
Strength of privately-held regional chains
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Company Confidential
The Best of the Best
Retailer PoweRanking Winners
2004 PoweRanking Composite - Retailers
75%
32%
26%
24%
17%
Point Chg.
vs. 2003
Wal-Mart
-1
Target
-1
Kroger
-1
16%
HEB
Publix
Costco
+1
+3
+3
10
14%
11%
10%
Wegmans Walgreens
+2
+1
9%
Safeway
Meijer
-7
-2
Company Confidential
Projected Power Retailers
Which Retailers are Projected to be the Power Retailers in the Next 15 Years?
96.8%
46.5%
35.7%
26.8%
15.1%
9.6%
Wal*Mart
Pt. Chg.
Vs. YAG
-2.4
7.6%
7.6%
7.3%
5.7%
Kroger
Target
Costco
Walgreens
Dollar General
Albertson's
Safeway
Publix
Ahold
-3.7
-1.2
+3.9
+2.2
+4.4
+1.0
-9.3
+2.8
-7.7
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Company Confidential
The Best of the Best
Manufacturer PoweRanking Results
2004 PoweRanking Composite - Manufacturers
43%
36%
24%
12%
12%
9%
Point Chg.
vs. 2003
+5
+1
+2
+3
-2
+3
12
9%
-6
8%
7%
7%
7%
7%
NC
-5
-1
+4
NC
Company Confidential
Profiling The Big Four Manufacturers
Who is?
Why?
Top Two PoweRanking™ factors by company
P&G
Kraft/Nabisco
Clearest company strategy
Most important consumer brands
PepsiCo
General Mills
29%
57%
49%
Growth & profitability
Most innovative marketing
29%
Best consumer information
Best sales/customer teams
Best supply chain management
31%
26%
55%
Best practice category management
45%
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Company Confidential
PoweRanking Value Pyramid
PoweRanking Measure
% Retailers
Top 2 Box
Growth & Profitability
80%+
Sales Teams
Consumer Brands
70%-75%
Value
Category Management
Consumer Insights
Innovative Marketing
Clear Company Strategy
Logistics/Supply Chain
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50%-65%
100%
Company Confidential
If supply chain isn’t working, nothing else matters
Lowest
Internet
strategy
Priority
Fixture approach
Frequent shopper card
Highest
Lowest
Consumer insights
EPA/POG
Trade Promotion Evaluation
Consumer Insights
Customer Category Management
Priority
Promotion Planning
Customer Service
Highest
Supply Chain
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Company Confidential
Best Combination of Growth Profitability 2004
Which manufacturers provide the best combination of growth and profitability?
(% Retailers Rating Among Top 3 Manufacturers)
33%
28%
26%
14%
13%
11%
Point Chg.
vs. 2003
10%
9%
7%
6%
6%
HPC
+3
+10
+4
+1
+2
-3
16
-4
+4
NC
+1
-5
Company Confidential
2004 PoweRanking – Key Insights
The two top issues that retailers and manufacturers identified as
critical were innovation and execution:
1.
Innovation: New products, insights, processes and marketing
2.
Execution: At retail with product on shelf, strategies and marketing
programs
Generally the innovation leaders included non-foods companies and
execution leaders included food and beverage leaders
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Company Confidential
Industry Issue Importance – Innovation and
Execution
Retailer Perspective
93%
Manufacturer Perspective
97%
91%
82%
Execution Innovation
CMaR
78%
Technology
93%
93%
77%
Store
Brand
Execution Innovation
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Trade
81%
80%
Supply
Chain
CMaR
Company Confidential
Innovation is perceived as the driver of Growth
and Profitability
“Food companies are very good at what they do. But, we’re in a
period of relative stagnation where there isn’t anything really
exciting taking place in the market. The best example of this is
the whole low-carb phenomenon.
“It never used to be that we would consider products coming
from Unilever or P&G as profit drivers. But that’s all changed
because they’re figuring out how to introduce products where
we can make money as well as drive tonnage.”
Innovation in insights, products and promotion is the key to profitable growth
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Company Confidential
The big manufacturer innovations driving growth
and profitability
Innovations in the Past Two Years
Products
Promotion
Category
Management
Initiatives




Unilever
Nestle
General Mills
P&G




Axe
Coffee Mate
Whole Grain
Whitestrips, Swiffer Wet Jet, Mr. Clean
Jet Wash
 Kraft
 P&G
 Event Customization
 BrandSavers
 Campbell’s
 Clorox
 IQ Shelf
 Listening Tour
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Company Confidential
Insights leadership is coming from non-foods
“Non-foods manufacturers have had to innovate because
their categories were stagnant. The idea of savings and
convenience as consumers have less time to clean. Now,
you’re seeing a whole series of new, really innovative
products come out of those insights that are designed to save
consumers time.”
P&G, Unilever, Kimberly-Clark and Clorox viewed as
insights/innovation leaders
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Company Confidential
Key success factors for executional excellence
Passion for the Customer:
Customer relationships are valued and cherished above almost
anything else.
Results Focus:
Culture of aggressively driving business results.
Capability/Talent:
Continuous improvement mentality that drives constant
renovation.
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Company Confidential
Typical barriers for manufacturers
Issues
Seen as putting its interest ahead of the retailers:
– Corporate arrogance
– Lack of listening
Not considered responsive:
– Siloed organization
– Lack of authority/empowerment
– Communication
Not helping customers differentiate themselves:
– Customization
– Flexibility
Program and product development doesn’t fit with retailers calendars:
– Opportunities are lost
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Company Confidential
Manufacturers must focus better on retailer
imperatives of differentiation and customization
Customized
Programs
Shopper
Insights
Segment
Marketing
Broader
Perspective
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Company Confidential
A success formula has been identified for
PoweRanking leadership
Category Growth & Profitability
Customer
understanding/
timeliness
+
Product and
program
innovation
+
Program
customization/
timeliness
+
Supply
chain
These four top drivers all received +90% top two box response ratings
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Company Confidential
Strong Consumer brands are critical to long-term
success
“The big brands are driving most of our very successful
operations. We are now focused on only promoting the #1 or #2
brands in a category.”
“Kraft does better than most. They have the products in every
category. Kraft has learned how to pull things together with
Nabisco.”
“P&G is up to 15 $1 billion brands in its portfolio. That brings
tremendous power and leverage.”
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Company Confidential
Question
How to build consumer brand equity
in a retailer-centric world?
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Company Confidential
Consumer Package Goods Marketing Evolution
Pre 1980
1980s
Brand Marketing Control
Equity building
National
branding
Trade growth
Wal-Mart
emergence
Media
fragmentation
1990s
2000-2005
2005-2010
The Power Shift
Trade and
Consumer Shift
Marketing-At-Retail
Full Shift
Co-marketing
Retailer
consolidation
Internet boom
Category
management
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Escalation of
trade
Wal-Mart
leading the way
Frequent
shopper card
programs
Merchants as
marketers
Marketing-atretail
breakthrough
Revenue to retail
Marketing/sales/
logistics
integration
Company Confidential
Key trends are at the center of a growing
marketing issue
Key Trend Drivers
The Issue
CONSUMER
How to effectively and
efficiently influence the
consumer …shopper…
consumer …… shopper…..
to purchase products
today and tomorrow
BRAND
RETAILER
MEDIA
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Company Confidential
A variety of manufacturers and retailers have been
identified as leaders in the field of Marketing-at-Retail
“The companies that come to mind are in the HBA/HBC or the non-food
arena. The food companies appear to be behind the eight ball.”
“P&G is by far ahead of the pack. Pepsi is still very driven by event
marketing and big POS programs. Coke has brought some industry
programs to the industry but most of the big companies such as Nestle,
Kraft and even General Mills are all similar and “tied” for second.”
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Company Confidential
The current trend will continue with more dollars
passing through the retailer
Periods
1950’s – 1980’s
1990’s
2000 – 2005
2005 – 2010
Theme
Brand
Marketing
Control
The Power Shift
Trade and
Consumer Shift
Marketing-AtRetail Full Shift
Consumer
Go-ToMarket
Focus
Shopper
Consumer
Trade
Customer
Comments
Brand is king
Emergence of WalMart
Retailer consolidation
Brands are
challenged
Category
management
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Retailer data insight
Differentiation is key
– brand and retailer
Retailer revenue
needs increase
Consumer
marketing and
shopper
marketing rebalance
Mass/national
retailers balance
better regionals
Company Confidential
Power Profile Diagnostic Tool
Manufacturer Power Profile
Distinctive
Superior
Value
Average
Growth
and
Profit
Problem
Assets
Consumer
Brands
Innovation
Strategy
Sales
Teams
Cat.
Mngmt.
Consumer
Insight
Capabilities
Logistics
Foundation
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Company Confidential
Manufacturer Power Profile by Management
Level
Senior Managers
Distinctive
Category Managers
Superior
Average
Problem
Growth
and
Profit
Consumer
Brands
Innovation
Strategy
Growth
and
Profit
Sales
Teams
Cat.
Mngmt.
Consumer
Brands
Consumer
Insight
Innovation
Logistics
Strategy
Sales
Teams
Cat.
Mngmt.
Consumer
Insight
Logistics
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Company Confidential
How to Improve
Establish a clear benchmark and scorecard regarding performance
among the top retailers.
Establish a scorecard based on feedback from the top 20-25 retailers
that can be benchmarked annually to identify retailer perceptions
regarding the industry.
Determine what is important to customers at a strategic level and
identify opportunities to improve position with retail management.
Identify the critical elements for retailers in making choices overall and
those specific to the category.
Gain customer goodwill by working with them to grow the business.
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Company Confidential