1

Insight Information in Category Management

2

Insight Information in Category Management Co-operation

3

• Targets:– To illustrate how information is used in retailer-supplier partnership to

enhance the confectionary category performance and growth.– To give some practical examples of the key knowledge tools and practices

• Agenda:– Introductions– Short company presentations– Partnership– From data to information tools

• Segmentation, clusters, solutions

– Examples of day to day category management• Planning of assortments – case launching novelty Fazer Nordic Gourmet

4

Kesko Group, year 2009

• The K-Group’s sales were €12.6 billion• Sales in Finland €10.5 billion• K-food stores’ sales €5.7 billion

– Hypermarket (K-citymarket), supermarket (K-supermarket, K-market) and proximity stores (K-extra)

• The number of the K-Group personnel wasc. 45,000, of whom 22,200 were Kesko employees

Building and home improvement trade

Car and machinery trade

Food trade

Home and speciality goods trade

44 % of net sales27 % of net sales

11 % of net sales18 % of net sales

5

Finland5.3m

Sweden9m

Estonia 1.4m

Latvia 2.3m

Lithuania 3.4m

St. Petersburg area 5m

Norway 4.5m

Moscowarea 15m

Belarus9.8m

Kesko has 2,000 stores engaged in chain operations in eight countries

Total about 56m consumers

• Finland: all divisions• Sweden: building and

home improvement trade• Norway: building and

home improvement trade• Baltics: building and

home improvement, agricultural and machinery trade, furniture trade and distance sales

• Russia: building and home improvement trade, machinery trade

• Belarus: building and home improvement trade

6

Oy Karl Fazer Ab

Fazer Food Services

• The leading food service company in the Nordic and the Baltic countries

• Almost 1400 restaurants in the Nordic countries, Estonia, Latvia and Russia

• 360 000 meals daily

• Turnover 536 M€ (2009)

• Number of personnel 7 500

Fazer Group

Fazer Group:Turnover 1 441 M€ Personnel 17 000

Fazer Bakeries & Confectionery

• Finland's leading bakery and confectionery company, one of the leading companies in the Baltic Sea region and Russia.

• 21 bakeries in Finland, Sweden, Estonia, Latvia, Lithuania and Russia. Market leader in St. Petersburg.

• The confectionery factories are located in Finland: Vantaa, Lappeenranta and Karkkila

• Turnover 905 M€ (2009)

• Number of personnel ca 9 200

7

Strong Market Positions Across the Region 2009

FinlandFF # 1. (53 %)FB # 1. (39 %)FC # 1 (35%)

SwedenFF # 2. (28 %)FB # 2. (28 %)FC # 4. (8%)

DenmarkFF # 3. (15 %)

NorwayFF # 4. (10 %)

The Nordic countriesFazer Food Services: 1. (28 %)Fazer Bakeries: 1 (18%) (fresh bread)Fazer Confectionery: 2 (15%)

BalticsFF # 1. FB # 2. (16%)FC # 3. (>10%)

Russia / FBSt Pete # 1. (44 %)Moscow # 5. (~7%)

Fazer Group

8

Over 50 FMCG retail and supplier customers

Our FMCG supplier customers’ combined market share is over 70% in Finland.

Comprehensive management system from strategic to tactical level

• Advanced customer segmentation

• Planning tools for category management processes, supplier collaboration and marketing

• Corporate performance management, analysis and reporting systems

• Product information maintenance

• Consulting in customer insight

Customer and trend insight for competitive advantage

9

Partnership

10

Partnership between Kesko Food and Fazer

• Why to do it?

– Seeking for constant Sales and Profit growth– Utilize and understand consumer and shopper insights– To improve target customer’s service and price image of the category– To do it with less costs and more efficient way– Common KPI’s

– Need to understand different levels of co-operation– Fazer Confectionary– Kesko Food Ltd – K-retailers (multi format independent entrepreneurs)

11

Fazer has many interfaces towards Kesko Food

Optimal assortment and delivery accuracy towards K-food stores

Best shelf availability and quality to consumers

Demand analysis

Assortment and spacem. planning

Pro-curement

Plano- grams

Log.model

Buyingto WH

Ware- housing

StoreReplenish-ment

Delivery Instore logistics

In storePro-motion

Customerservice

Buying Satisfaction,re-buying

Several co-operation interfaces

SeasonsCampaingsNovelties

12

Workshop Kesko-Fazer, March 2010

• Topics shared:– Ways Kesko Food

and K-retailers are operating

– Main activities planned for 2010

– In-store activities– Common actions

for Spring and Summer 2010

– How to gain more market share?

Page 12

13

Partnership as Kesko Food and Fazer do it

• What does it include?

– Shared vision and strategies– Co-processes– Co-projects– Shared tools and practices

14

Rolling 12 months partnership calendar

Jan

Feb

March

April

May

June

July

Aug

Sep

Oct

Nov

Dec

Management

Marketing

Tactical

Logistical

.

Tactics for the Christmas

Tactics for the summer

Locistical plans forthe summer

.

Tactics for the autumn

Insightinformation

Locistical plans forthe autumn

.

Tactics for the start of the next year

Locistical plans forthe start of the nextyear

.

15

Partnership as a process

Strategical level

-top management

Marketing level

- Chain marketing

Tactical level

- Purchasing

Operational level-Logistics, Sales

field

- projects

- Main guidelines

- Sources of differentation

- Management Scorecards

- Trade as a media

- Marketing plans

- Brand synergy

- Assortment and Space Management

- Activities

- Business scorecards

Feedback / Best Practices

- execution

16

17

Fazer Confectionary’s KeyAccount Manager’s workbench

Kesko Food’sCustomer

segmentation

Kesko Food’s Store Clusters by

Chains

Kesko Food’s marketing

Plans by chains

KeskoFood’sPOS-data

Fazer’s DW

Mutual Scorecards

And informationtools

Kesko Food’s

DW

Market reportsAnd studies

ObservationsAnd feedbackFrom Sales

Reps

Fazer Confectionary’s Sales Reps /Kesko Food’s information tools

18

The knowledge tools in use

From data to information toolsSegmentation, clusters, solutions

19

Services for Kesko and suppliers

Consumer trend modelling

Product attributes (about 100)

Product information

Segmentations

Planning tools and reporting

Customer and category tracking

Performance measures

Expert services

Assortment planning and pricing

Marketing, campaigns, NPIs

Portfolio management and

R&D

Store segmentations

Customer segmentations

Product information maintenance (30 000)

products

Training

Consulting

Support

Customisation of reports

20

K-food stores use a set of unique structures and equipment for assortment planning

Page 20

Food Styles – customer

segmentation

Food Styles – customer

segmentation

Store clusteringStore clustering

Analyse² Galaxy – planning tool for assortments

and pricing

Analyse² Galaxy – planning tool for assortments

and pricing

21

Revised assortment structure

Cluster based assortment

Store size based assortment

Formats nationwideassortment for chains

Core assortment forK-food Store

22

Consumers buy product benefitsShopping behavior reveals important trends

...this product has less salt....

...it’s good for my health... ...this brand I can trust....

describe consumers’ needs and values, and their changes

associated with product attributes:

certain attributes

certain trends

Trends ..

23

Trends linked to Nordic Gourmet

Quality

New experiences and sensory

Indulgence

Strong brands

24

Nordic Gourmet trends in FoodStyle groups

New experiences and sensory

Qualit

y

25

Customer emphasis for Nordic Gourmet

26

Nordic Gourmet trends in store clusters – FoodStyle groups are basis of store cluster assortments

New

experi

ence

s and s

enso

ry

Quality

27

Assortment suggestion for K-supermarket cluster 1

• Excellent match for the target customers of the chain

• The assortment planning tools automatic suggestion ranks the products #2, #4 and #6 in their segment!

28

Thank you!