Driving growth in storeHow to win in dynamic FMCG Environment in Russia ?

Solutions for in-store execution control and continuous improvement

September 2011

2Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Half of purchasing decisions are made by Russian consumers in-

store*

Background: store is a real battle-field around consumer

*Source: Nielsen OmniShopper 2010, 2244 respondents

3Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Our Understanding of the client Business Objectives

• Improving POS execution is a strategic goal• Business tactical objectives are:

• Create an audit system with a clear measurable impact on the quality of execution at POS level

• Gain better insight about quality of execution of competition and set benchmarks

• Improve visibility and gain better equipmentutilization at stores that are not covered by you directly

• Improve sales force efficiency

4Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Differentiating factors of Nielsen Retailplus• We provide a sales/TM tool that actively supports improvement

of in-store execution• Flexible, entrepreneurial and responsive consultant• Real time dynamic system – turnaround time data capture to

WEB reporting - one day• Real-time alerts methodology to help improve execution• Reports include pictures of specific points of interest at POC• Sophisticated scoring system based on in-store KPI’s• Automated quality control procedures to enhance data quality• Auditors are long term trained employees –no temps

5Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Vital KPIs to be monitored in store continuously Shelf Price

and TPR

1 2 3 4 5

Facings,Share of shelf

Availability, Out-of-stock

?

Promotion execution, POSM

2nd placements and expositions

Customized QNR (merchandising standards, etc)

6Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Gifts and Samples

Multibuy (2x1, 3x2, etc.)

Bonus PackBanded Pack

Price discount

Coupon

What promo types can be registered?

Loyalty Card

Lottery Shelf Talker/Wobblers

Promoter

7Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Retailplus Russia Main office in Moscow –

Staff includes Operations Manager, Client Service, IT people, supervisors

Field auditors in all main cities in Russia Current clients in Russia include

Unilever Wim-Bill-Dun Inbev Nestle J&J Mars Avon

8Copyright © 2010 The Nielsen Company. Confidential and proprietary.

• Official access in Modern and Traditional trade • Other retailers can be visited via flexible methodology• Store level data from > 3 000 every month • 35 main cities and nearby areas are covered

Nielsen R+ has official access to most of KAs, it’s unique!

9Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Manual QC in officeif required

Audit available for client via WEB

Auditors get daily plan of shops

Auditors move according to a route

Shop banner picture and GPS coordinates

Fulfill QNR predefined for each shop

Picture of predefined objects

Upload finished QNR to server via GPRS

3-24 h

Alerts delivery to problem owner Score carding of shops/ sales repsSales reps performance review

and improvement

Automatic QC in parallel

Audit process secure data consistency and quality

10Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Data Quality and Integrity

Based on our system capabilities, methodology of data capture and operational efficiency

We guarantee data accuracy level of over 99.4% from the 4th month of the project.

11Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Reporting “Real-time” reporting via web-tool to multi users users can

design save and PULL reports Daily or weekly actionable reports A set of pre-defined monthly reports with all KPI’s tracked,

scores and qualitative issues will be PUSHed by mail Reports can be added and changed within days Pictures of stores can be seen via web-tool according to the

specific issue in question

12Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Why work with Nielsen Retailplus ? we understand your business needs, and help you improve POC

execution and achieve your business objectives provide fast and dynamic reactions in a dynamic market give a real-time sales support tool based on automatic generated

alerts and delivery on the next day via WEB send you only actionable reports, and not pure research data

that you can’t do much about it you can influence retailers combining in-store data with retail

audit (esp. KAI) and use results in negotiations – see example

store observation data is a great source for ad-hoc analyses and recommendations (promo efficiency, marketing mix, key business drivers) – see example

13Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Retailplus has 15 years experience providing in-store insights, our clients are:

14Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Thank you

15Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Appendix

Alerts system Insights

16Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Alerts System – active tool for improving execution

• Situations like missing MHP, no 2nd display, no POSM, no fridge exclusivity are pre defined

• When these situations are found in shops, alerts are sent by email to the problem owner on client side

• On daily / weekly basis alerts are accumulated to report for sales managers to help them track their people performance

• As option - a sales rep gets alert but does not know which shops are in the sample this month, so he takes care of all the shops to improve his scorecard performance

• In some projects we make a follow up phone calls in which we collect the reason for the situation we saw in shop

17Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Some of the questions Nielsen Retailplus answers• What promotions are performed by my competitors?

How does their promo strategy vary across?• At what price are my products sold in different Key

Accounts?• What other display types aside from shelf are

important for category / my assortment?• Do I get sufficient space on the shelf? Does it

correspond to my market share? How is my competition performing?

• Is out-of-stock (OOS) an issue for my portfolio? In which Key Accounts do I have this issue?

• Do I have the right positions on the shelf in the store? Are my products at the eye level or out of consumers’ view?

18Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Low

Eye level

High

Inside the exhibition we provide deeper knowledge of products’ visibility for consumers

Middle

19Copyright © 2010 The Nielsen Company. Confidential and proprietary.

What types of promo are most efficient for my / competitor’s sales growth?

20Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Roasted & Ground Coffee (%) - Retailer "A"

54,1

40,6

13,3

25,3

9,7 9,8

7,33,1

2,47,5

13,2 13,7

0

10

20

30

40

50

60

70

80

90

100

VALUE SHARE(AS09)

SHELF SHARE

OTHERS

PRIVATE LABELS

NESTLE

SARA LEE

KRAFT FOODS

TCHIBO

SHELF SHARE PRIMARY DISPLAY (%)

25,0

36,7

15,4

11,0

8,4

3,5

Shelf Share = Share of Shelf Facingsin hypermarkets in chain A

Do I get sufficient space on the shelf? Does it correspond to my market share? Do I have arguments to expand my presence in particular chain/ outlet?

My products

Manufacture Y

Manufacture X

Private Labels

My main competitor

21Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Pricing of TOP R&G Coffee SKUs

54,4

39,5

22,9

49,9

63,8

43,2

26,0

60,8

66,9

45,5

29,6

72,9

0

10

20

30

40

50

60

70

80

DE Grand Aroma 250g JAC Standard Aroma250g

JIHL. Standard 150g TCH Exclusive 250g

Min Price

AveragePrice

Max price

At what price my products are sold in different Key Accounts? Is our price dispersion in planned interval?

15%

23%

29%

46%

Price dispersion

Billa 72,90Makro 65,29Lidl 64,90Albert SM 64,90Kaufland 64,90Penny Market 64,90Albert HM 59,90Tesco 55,90Interspar 49,90Globus 49,90

TCH Exclusive 250g

Price per Item, RUR

SKU 1 SKU 2 SKU 3 MY SKU

Retailers

22Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Listing Fullfillment - All Shops/All Categories

4,2

1,6 2,0

5,3

9,7

14,1

25,8

19,1

11,2

2,2

4,6

0 - 9,9 % 10 - 19,9 % 20 - 29,9 % 30 - 39,9 % 40 - 49,9 % 50 - 59,9 % 60 - 69,9 % 70 - 79,9 % 80 - 89,9 % 90 - 99,9 % 100 %

% of Shops

Reality in Stores: Agreed Assortment is hardly ever met

• Less than 5% of shops comply with agreements (must sku list)• 2/3 of shops fulfill less than 70 %

Business Case