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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
Measuring Merchandising Effectiveness
ACNielsen Romania
October 2005
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
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Agenda
Defining the merchandising standards How can we determine the impact of
merchandising on sales? Location types – examples POPM types - examples Merchandising criteria – examples The best mix
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Defining Merchandising Standards How do I want my products to look like in the
stores?In standards definition/fine-tuning, several main areas should be covered:
In which area of the store do I want my products to be present? In Category Section In Main Traffic End of Isle At Check-Out Secondary Placement
What do I place? Products Products aided by POPM Other aids
How do we place? Merchandising criteria
And most important.......WITH WHAT RESULTS?.......or......WHAT IS THE MOST EFFECTIVE MERCHANDISING MIX FOR MYPORTFOLIO ?
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
a VNU business
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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen
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Within the multitude of messages in a store, the shopping experience is not always easy …
Through merchandising we can help our customers decide easier and better….
And hopefully to select OUR brand
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A successful merchandising program is a synergy of several factors
The Impact of the merchandising activities on the sales depends on a lot of factors:
Category type Store type The brand Quality of the aids Competitive activity Implementation quality Permanent review Other factors
The impact can be determined through: Past evaluation In store tests of new concepts
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How can we determine the impact of merchandising on sales?
How we analyse:1) First we analyse individual activities in terms of scope and impact on
sales: We compare the sales of the stores where a specific activity is present
with the average of all stores or with the stores not having that activity We have to bear in mind that the merchandising activities are generally
placed in the “good” shops. Thus the results per-se show higher impact due to the fact that these shops are by definition preferred stores for that brand.
Example: Product in Main Traffic Flow - 5% contribution Floor Display in category section - 6% Contribution
2) Then we analyse the interactions between these activities, resulting in a joined impact :
- Main Traffic Flow + Standing Display in category section - 5.5% contribution
This shows that adding up of the activities is not necessarily an additive process but a multiplicative process.
3) Finally we determine the combination of activities that delivers the highest impact (sales, share or impact on competition).
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Locations Types
Category section: where most products of a specific category are placed In main traffic: on (one of) the main route(s) from entry to exit End of Isle/end of gondola At Check-out Secondary placement: any other location in the store except of the above …….
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POPM TypesMost frequent POPM encountered in the stores:
Floor Display Shelf Display Poster Sticker Wobblers Shelf stopper Section marker Hanger Stripes Shelf display Shelf liner Shelf tray Shelf talkers Header board Counter display Window display Pyramid Money tray Leaflet tray ........
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Location and POPM ScopeIn how many stores my brand and its main competitor are in
Location Y and have POPM Z?Brand X and its competitor's penetration in Hyper/supers
(Numeric Distribution)
0%
10%
20%
30%
40%
Brand X
Its competitor
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What Activity has the highest impact ? How am I performing when...Eg. I have Shelf liners in the store and I am at Check-out ?
Brand X Merchandising in Hyper/supersImpact of different activities
0%
5%
10%
15%
20%
25%
Total Portfolio 23,7% 27,0% 32,4% 33,3% 30,2% 16,3% 28,9% 27,7%
Brand X 10,0% 10,6% 9,0% 18,0% 13,0% 6,0% 11,0% 19,0%
Avg. Sales 125 140 110 82 128 96 135 103
Competitor Brand 14,5% 11,0% 15,0% 9,0% 15,0% 18,0% 14,9% 10,0%
BaseFloor Stand
Obler Sh. LinerMain
TrafficCheck
OutCategory Section
Promotional price
Other correlations:
My total company share when I have...
My sales per shop when... (how important are these shops)
My competitor share when I have….
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How many POPMs should I place to obtain maximum impact but not waste money?
Brand X - Impact of No of POPMs on share
14%
10%
16%
20%
18%
0%
5%
10%
15%
20%
25%
Base No activity 1 POPM 2 POPMs 3 POPMs
HYPERS/SUPERS Brand X POPM Q Volume share
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Brand T (competitor of brand X) - Impact of No of POPMs on share
21,5
38,7
14,8
11,3
-
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
Base No POPM Type D (ofBrand X)
1 POPM D 2 POPMs D
How does my POPM impact my competitor brand ?
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What is the combined impact of activities (for me and my competitors)?
Brand Activity Brand X Brand T Brand Y
Floor stand 15,7% -4,1%
Floor stand (long term) -7,8%
Second placement 19,5%
Floor stand and 2nd pl. 21,2% -8,9%
Shelf stopper and floor st. 16,7%
Shelf display 6,2% -19,4%
Second placement -13,1%
Check-out -15,3%
Shelf stopper 11,1%
Shelf display 10,1%
Second placement -13,0%
Brand X
Brand T
Brand Y
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Merchandising Criteria
Most frequent criteria encountered in the stores:
Facings Brand block Beginning/end of section Eye level/ shelf no X Near product Y (own or competitor’s) Within segment Z Near category W Exclusive location At hand level Product order Coupons Coupon/promo/demo ladies Product sampling Long term appearance in the leaflet ...
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Brand X - Standards Impact on Share
9%
11% 10%
13%
16%
7%8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
BASE EYE LEVEL PRICEVISIBLE
BRANDBLOC
MORE THAN30%
FACINGS
NEXT TOCATEGORY
W
BEGINNINGOF SECTION
What Criterion has the highest impact ?How am I performing when...
Eg. My products are displayed in Brand Block in channel ABC?
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Brand X - Impact of No of Facings
10%
6%
19%
14%
10%
0%
5%
10%
15%
20%
25%
BASE LESS THAN 07FACINGS
07-10 FACINGS 10-14 FACINGS MORE THAN 15FACINGS
What Criterion/Level of criterion has the highest impact ?How am I performing when...
Eg. I have less than 7 facings in channel ABC?
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For example, Brand X In Hyper/supers the optimal merchandising mix includes:
In Category section: Floor Display (2 stands) Shelf Liner min 10 facings placed in brand block at eye level and next
to key competitor, price communicated
paired with a Second Placement in Main Traffic. The impact range is: 8.9% to 18.9% more volumes, depending on
the store size and competitive activity On main competitor the impact is – 5% to – 8.9% less volumes
At the end of the analysis, the most effective standard for a specific channel is determined (based on past
record)
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Thank you for your attention!