THE ISSUE: How to win at point Of purchase

in the Traditional Trade

There is a vast array of potential outlets with differing needs and value to you

Routes-to-market are highly complex and evolving, with a myriad of structured and unstructured sales and distribution options

Your existing and emerging competitors are rapidly shifting focus away from developed markets to increasing their presence in high growth Traditional Trade centric markets. This requires an absolute focus on winning at point of purchase

A new type of diagnostic is required to help your people cut through the complex clutter of results and symptoms to identify and address root causes

Winning at point of purchase in the Traditional Trade requires world class understand of performance drivers in the Traditional Trade P&L

Historical value created

Problems to fix and how to fix them

Outlet Coverage, GfK, Competitive Position, Channel P&L

Poor ‘Picture Of Success’ compliance, ineffective NPD, out of stocks, negative trading relationships

Are they understood?Do customers & internal stakeholders agree?What actions should be undertaken?

Results

Pain felt today

Symptoms

Root Causes

Our 3-D Traditional Trade Diagnostic

is your essential tool for root cause analysis

Our 3-D analysis tool ensures that root cause issues are identified, rather than just symptoms

Each dimension (stakeholder perception, data, expertise) provides unique insight into how to drive customer performance

Once root cause issues are agreed, improved performance can be targeted and actions automatically generated to address these issues and deliver real results

3-D root cause analysis defines actions that deliver real results

Root Cause Analysis

Perception

3D Traditional Trade

Diagnostic

StakeholderReality

Level ofExperience

Quality of Data

DataExpertise

Actions

£ $€¥

The product architecture directly supports

the client’s business planning process

A consistent quantitative research structure is used to collect information, compare benchmarks and create the financial analysis

The 3-D Diagnostic product is unique in the way it step changes productivity in clients’ business planning processes by structuring unstructured information and automating action planning

Financial Model

3DPerformance

Plan

ExpertPerformance

Review

Client DataRepository

IndustryBenchmarkDatabase

Web-BasedStakeholder

Questionnaire

3-D Traditional TradeDiagnostic

Business PlanningChannelPlanning

Investment Agreement

ExecutionPlanning

Execution

Key stakeholders (internal & customer) deliver feedback on performance through our web-based quantitative research tool

Existing data (brand plans, customer presentations, raw data) is analysed by CA to understand if stakeholder perception is valid

Nominated experts challenge stakeholder perception and data analysis to create a final 3-D root cause analysis of performance

In each performance area a current and target level of performance is set to define actions to shift customer performance

A valuation model creates a direct line of sight between planned actions, predicted value creation and potential investment scenarios

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5

5 steps are undertaken to create a 3-D Performance Plan

Stakeholder does not see the question

Order of statements is randomised to

increase objectivity

Stakeholder sees statements to agree

or disagree with

1. Has the potential outlet universe for the category been identified?1The supplier has a really good understanding of which outlets are most relevant for the category it operates in8The supplier entirely misses some outlet locations where the category is highly relevant

2. Is the outlet universe segmented around appropriate consumption needs and/or shopping missions (nature)?9The supplier treats different types of outlets in different ways based on deep consumer and shopper insight 2The supplier lacks consumer and shopper understanding at outlet level

3. Is the consumer value of each nature segment and its constituent outlets appropriately quantified?3I think the supplier has a good understanding of which outlet types have the biggest potential value10The supplier seems unable to prioritise its focus on the most valuable outlets

4. Have the growth drivers for each nature segment been determined?11It’s really clear how the supplier is intending to drive growth in different ways in different types of outlets4The supplier’s trading and activation plans tend to be ‘one size fits all outlets’

5. Are the servicing requirements of each nature segment and its constituent outlets appropriately defined?5 The supplier has a good understanding of how different types of outlets need to be serviced in

different ways12 The suppliers servicing approach tends to be ‘one size fits all outlets’

6. Has the cost-to-serve for each outlet been accurately quantified?13I think the supplier has a good understanding of total cost-to-serve for different outlet types6The supplier has little understanding of how much it costs to service different types of outlets

7. Has the potential outlet universe been prioritised in a way that will help maximise profitable growth?7The supplier prioritises its investments appropriately across different outlets to drive maximum value creation for all14I have no idea how the supplier allocates investments for different outlets

Web-based quantitative researchcollates rich stakeholder opinionSTEP1Expertly designed web-based quantitative research tool

Seeks degrees of agreement to key statements that indicate performance versus expertly identified customer performance drivers

Drives objectivity:Statements are built to be intuitively understoodProvides positive and negative versions of the same statements to examine consistency of responseAvoids tying statements directly to the customer performance drivers

Users can be any stakeholderAll functionsAll gradesLocal and internationalInternal & external

OUTLET SEGMENTATION

STEP2Data is reviewed to better understand reality

Data is both deposited on our server by the client team and stakeholders can post documents to the software directly in response to submitting specific opinions.

This is existing data only - no new analysis needs to be undertaken by the client. =

Data is evidenced against the quantitative research structure to assess the validity of differing stakeholder perceptions

1. Has the potential outlet universe for thecategory been identified?

Market & category analysis+Advantage Group / GfK survey+

+Consumer & shopper research+Innovation pipeline+Activation plans+Organisation structure+Sales fundamentals+Operational performance+Financial performance

Outlet research

OUTLET SEGMENTATION

STEP3Expert opinion challenges data and perception

Specific client experts are nominated to work with our experts to provide opinion on stakeholder perception and available data in order to create a final 3-D conclusion on each area of performance

We agree upfront who the client experts will be for each area of subject matter e.g. ‘Relevant Category Opportunity’ = Category Strategy Director, ‘Trading & Activation Plans’ = National Sales Manager, ‘Supply Chain Execution’ = Logistics Manager and build on their input to create the expert view

As you can see, root cause analysis only works in 3-D

Key Accounts believe relevant outlets are missed, but people in the supplier believe the outlet universe has been mapped

The outlet research was skewed towards the supplier’s biggest brands and missed relevant outlets for smaller brands and untapped sub-categories

The final conclusion is that Key Accounts are right and the potential outlet universe for the category has not been correctly identified

A considerable amount of outlet research has been conducted, which would suggest the outlet universe has been mapped

1. Has the potentialoutlet universe for the category been identified?

Perception

3D Traditional Trade

Diagnostic

DataExpertise

NO

NO YES

YES / NOOUTLET

SEGMENTATION

STEP4Actions to improve performance are agreed with key stakeholders

Once the 3-D analysis is complete, we then work with the client experts to conduct a final interpretation of the results

In each performance area a level of current performance is agreed using 3-D insight and a target level of performance is set, using the structure on the page opposite

Actions are then automatically generated to shift to a higher level of performance

AUTOMATICALLY GENERATED ACTION:Use high level research to define the outlet universe structure and estimate its potential size

DESIRED FUTURE PERFORMANCE

CURRENT PERFORMANCE

1. Has the potential outlet universe for the category been identified?4. The full outlet universe for the category has been mapped using outlet level data for the overall geography concerned3. The structure and high level size of the potential outlet universe has been defined2. There is a good understanding of how to define the potential outlet universe for the category, but the potential outlet universe for the category has not been defined1. There is little understanding of how to define the potential outlet universe for the category

2. Is the outlet universe segmented around appropriate consumption needs and/or shopping missions (nature)?4. The entire potential outlet universe has been segmented by consumption need and shopping mission to create a full view of appropriate nature segments3. Robust research has been conducted to identify the different consumption needs and shopping missions exhibited across the outlet universe and priority segments have been defined2. There is good understanding of how to segment the potential outlet universe by appropriate consumption needs and/or shopping missions, but the outlet universe has not been segmented in this way1. There is little understanding of how to segment the potential outlet universe by appropriate consumption needs and/or shopping missions

3. Is the consumer value of each nature segment and its constituent outlets appropriately quantified?4. Robust data has been collected from an appropriate sample of outlets and the consumer value of each nature segment and its constituent outlets has been accurately estimated3. High level research has been conducted to create insight into the consumer value of different types of outlets and a high level value has been defined for each nature segment2. There is good understanding of how to quantify the value of each nature segment and its constituent outlets, but the valuation has not yet been delivered1. There is little understanding of how to quantify the value of each nature segment and its constituent outlets

OUTLET SEGMENTATION

STEP5 The final step is a valuation of improved performance

Our valuation model uses an algorithm to create a direct line of sight between planned actions to shift performance, predicted value creation and potential investment scenarios

Current revenue & profit delivered through current performance

Incremental Revenue Derived From Performance Improvement

Incremental Profit Derived From Performance Improvement

Improvement Fund @ 1:2 Ratio

To Profit

Planning Fund At 1:4 Ratio To Improvement Fund

Incremental revenue & profit delivered through improved performance

1. Has the potential outlet universe for the category been identified?4. The full outlet universe for the category has been mapped using outlet level data for the overall geography concerned3. The structure and high level size of the potential outlet universe has been defined2. There is a good understanding of how to define the potential outlet universe for the category, but the potential outlet universe for the category has not been defined1. There is little understanding of how to define the potential outlet universe for the category

PLANNED PERFORMANCE SHIFT VALUE DRIVING ALGORITHM INVESTMENT PLANNING

£ $€ ¥

OUTLET SEGMENTATION

Confirmation of areas of strong performance

Root cause analysis for critical areas of underperformance

Improvement actions defined to shift current performance to future desired performance

Planned financial outcome

As more of these are conducted, comparative internal benchmarks can be run across performance components, customers, markets and stakeholder communities

3-D Traditional Trade Performance Plan

Comprehensive report

Web-based survey can be delivered in any language in any country

* = Incremental Annual Revenue / Contribution 4 = From Terminal To Shaping Category1

Portfolio Proposition

Outlet Segmentation

Relevant Category Opportunity

Supply Chain Execution

Trading & Activation Plans

RTM Operating Model

Key Account Management

Cost Pricing, Terms & Conditions

Outlet Management

-

3.1

3.0

4.0

Planned Value* Planned Contribution*

2.9

2.0

3.2

Planned Value*Planned Contribution*

2.4

2.0

3.1

Planned Value* Planned Contribution*

2.8

2.3

3.5

Planned Value* Planned Contribution*

2.5

1.8

3.3

Planned Value*Planned Contribution*

2.5

2.2

3.0

Planned Value* Planned Contribution*

2.7

1.2

2.7

Planned Value* Planned Contribution*

2.5

1.4

3.3

Planned Value* Planned Contribution*

2.5

2.8

4.0

Planned Value* Planned Contribution*

The appendix delivers rich detail on the perception of stakeholders, data reviewed and the expert opinion provided.

This creates a direct line of sight between the summary conclusions and detailed analysis

Rich detail provides supporting insight

into required action

Performance Component Questions

1.5 Level 1 Level 3

Stakeholder Perception

Split by Stakeholder Group

Current Performance

Target Future Performance

Improvement Action

1. Has the potential outlet universe forthe category been identified?

2. Is the outlet universe segmented aroundappropriate consumption needs and/or shopping missions (nature)?

3. Is the consumer value of each naturesegment and its constituent outlets appropriately quantified?

4. Have the growth drivers for each naturesegment been determined?

5. Are the servicing requirements of eachnature segment and its constituent outlets appropriately defined?

6. Has the cost of delivering each specificservice requirement been accurately quantified?

7. Has the potential outlet universe beenprioritised in a way that will help maximise profitable growth?

Scored 1 (low) to 4 (high) in terms of agreement with supporting statements to question (as explained in pages 14 - 15 )

Agreed current and target performance (as explained in pages 16 - 21)

Use high level research to define the outlet universe structure and estimate its potential size

OUTLET SEGMENTATION

The bespoke software solution has been specifically designed to help our corporate clients analyse business performance

It allows stakeholders to provide their opinion and back it up with fact, for example by attaching files that they believe are relevant

The same analysis structure is then used for the data analysis and expert opinion

As root cause issues and levels of current and desired performance are agreed, actions are automatically generated to shift performance

On the basis of these agreed actions, a valuation of improved performance is automatically generated

The software itself has been built

exactly for the purpose

The diagnostic isdeployed annually

to support business planning

Suitable for deployment annually as part of the business planning process

Can be used adhoc for channels or markets that require remedial attention

Fact based analysis of reality

6 Week Process

Completion of web based quantitative research by agreed stakeholder community

Write-up of the 3-D Traditional Trade

Performance PlanSet-up

ClientTailoring

3-D Traditional TradeDiagnostic

Business PlanningChannelPlanning

Investment Agreement

ExecutionPlanning

Execution

Client time commitment on each diagnostic

is minimal

Key stakeholders (internal & customer) deliver feedback on performance through our web-based quantitative research tool

Existing data (brand plans, customer presentations, raw data) is analysed by CA to understand if stakeholder perception is valid

Nominated experts challenge stakeholder perception and data analysis to create a final 3-D root cause analysis of performance

In each performance area a current & target level of performance is set for the next year to define actions to shift customer performance

A valuation model creates a direct line of sight between planned actions, predicted value creation and potential investment scenarios

STEP1 STEP2 STEP3 STEP4 STEP5

20 minutes per survey respondent

Total of 3 hours for the data co-ordinator and 30 minutes per data provider (typically 5-7 data providers) – no new analysis needs to be done by the client

Total of 3 hours for the expert reviews with each of the typically 4 individual client experts

All activities are delivered online through the web-based survey, teleconference calls and videoconferences

There are 3 levels at which the diagnostic

can operate

Stakeholders typically include- 5 local Leadership Team members- 10 cross-functional local representatives- Appropriate sample size of trade customers

Fact based analysis is conducted from local data

£36,155 fee* as a one-off and less for a 3 year programme or multiple diagnostics

* = excludes out of pocket charged at cost and VAT charged at the applicable rate

GLOBAL

1

3

2

LOCAL

REGIONAL

The outputs of all 3-D Traditional Trade Diagnostics completed globally are summarised and interpreted for global stakeholders

The local diagnostic is run individually for each specific customer channelThe outputs of all 3-D Traditional Trade

Diagnostics completed across an agreed region e.g. Africa are summarised and interpreted for regional stakeholders

50% - 70% reduction in requirement for face-to-face meetings drives e.g. - Lower T&E expenses - Better resource utilisation

Understanding the root cause problem cuts £250k-£1m+ of unnecessary spend on addressing symptoms e.g. - Shopper research - Packaging redesign - Promotions - Terms & conditions

Transformed clarity and strong stakeholder alignment around what problems need to be solved uplifts revenue by 25% - 50% - Better segmented outlet universe - World class RTM operating model - Improved customer relationships - Winning at POP - Sales fundamentals - NPD - Through the line activity

* = subject to customer profile

Customer revenue growth, profit growth and improved ROI

COST SAVING* REVENUE GROWTH*

The business case for deploying the diagnostic

is compelling

Write the brief for each solution identfiied Define solution

build resource requirements Identify external

partners to build each solution

Provide quality assurance support throughout solution build

Annual business planning cycles locally, regionally and globally

One-off strategic reviews of global or regional performance

Insight before a major agreed change

Root cause analysis on specific problems e.g. broken customer relationship,brand turnaround

Example Results

- £50m of incremental profit in Year 1 of a world class JBP- 357% brand growth over a 3 year period- €10m of trade spend cut- $100m of incremental brand profit- +40% YOY revenue growth through improved trading plan- $20m cost avoidance

Example Suppliers & Retailers

World class experience in consumer goods