DRIVING EXECUTIONAL EXCELLENCE BY LEVERAGING NEW TECHNOLOGY

Sharon Skurnac, NielsenAlejandra González, Kimberly-ClarkOctober 1, 2014

WINNING AT THE SHELF

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MANUFACTURERS VS. RETAILERSBoth have different structures that are constantly interacting with each other to satisfy consumer needs

MANUFACTURER RETAILER

Top Management

Business Units / KAM

Regional Managers

Sales Force Operations

Top Management

Purchasing

Central Warehouse

Store Managers

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A WELL-OILED MACHINEEach function needs to execute the strategy effectively to realize growth

Operations Sales Force

Top Management Target assignment and results follow up

KAM & CatmanNegotiation

Drugstores Supers Conv. Stores Traditional

x

x xx

Marketing

Trade Marketing

Business unit strategies

Strategy by channel

Self ServiceConvenienceTraditional

Strategies & Negotiations execution

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PLANNING VS. EXECUTINGDifferent meanings by function

BUSINESS NEED SOLUTION FOCUS IMPACT DURATION

Plan executionby designing optimal strategies ROI Impact Market / Portfolio Long

1 Year +

Detect competitors’

performance and opportunity

detection

Improve executionby detecting opportunities Compliance Retailer /

Category Medium1 – 3 Months

Determine inputs to the strategy

from real execution gaps

Measure executionwith robust key performance indicators

Store Check Store / Item Short1 – 7 Days

Strategies to correct common execution gaps

Trade/Brand Marketing

Catman & Trade

FieldSales

EXECUTION PLANNING

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INTRODUCING NIELSEN MIRROWNielsen Mirrow supports executional insights across all functions

Turning mobile photos into actionable store insights.

Product AProduct BProduct CProduct D

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CAPTURING THE WHOLE STORE WITH MIRROWAn all-in-one recognition tool

✓ Photo recognition✓ Manual scan✓ Questionnaires

COLLECTION METHODS✓ Primary shelf

✓ Secondary shelf ✓ Macro exhibits

✓ Displays & end-caps✓ Coolers

STORE LOCATIONS

✓ Modern trade✓ Traditional trade

✓ Specialty stores

CHANNELS

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THE MIRROW PICTURE – MULTIPLE PERSPECTIVESOne market reality with multiple perspectives…

LEVERAGED FOR BY

Execution follow-up tool Top Management

Strategy insights, opportunity areas detection

Business Units/ Trade Marketing

Negotiation tool Key Account Managers / Category Managers

Performance / incentives / improvement tool Regional Managers

Negotiation and performance improvement tool Sales Force Operations

KIMBERLY-CLARK DIAPERS CASE STUDY

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KIMBERLY-CLARK OPPORTUNITYSingle source of the truth for execution

CURRENT PROCESS

Multiple data sources

Store-level insights limited (manually collected) and often slow to gather

Competitive intelligence often limited to hearsay

Disparate spending pools for promotion communications and execution

Functionality-contained analysis of execution

OPPORTUNITY WITH MIRROW

All data from Mirrow

Fast and full view of 700 stores

Photo evidence and competitors’ activity

One measure of compliance across KC enterprise

Common language and view through entire organization

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NIELSEN MIRROW – KIMBERLY-CLARK Flexible tool to provide in-store insights

Quick

Response

Detailed

Information

Situati

on

Evidence

High

Scala

bility

KIMBERLY-CLARK EXPECTATION FOR IN-STORE MONITORING:

• Successful execution process with Multinational and Local Retailers

• Continuous follow-up for executional activities

• Incentives for sales force

• Execution performance feedback

KC NEEDS

EXECUTION OPERATIONS

COMPETITOR MONITORING

PRICE TRACKING

CATMAN FOLLOW-UP

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EXECUTIONAL GUIDELINES

EXECUTION OPERATIONS

• Shelf & Special Exhibitions strategy compliance

• Brand communication

• Offers & promotions activation

COMPETITOR MONITORING

• Competitor activity follow-up

• Promotions and offers activation

• Special exhibitions

PRICE TRACKING

• Price strategy compliance

• Competitor price monitoring

CATMAN FOLLOW-UP

• Planogram compliance

Ensuring end-to-end measurement and response to executional activity

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KC DIAPERS CASE STUDY - EXECUTION SUMMARY

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SHELF COMPLIANCE

OPERATIONAL EXECUTION

COMPETITIVE INTELLIGENCE

TOTAL COMPLIANCE

SCORE TREND BY INDICATOR

40%

50%

60%

70%

80%

90%

100%

J F M A M J J A S O N D

TOTAL MARKET – RETAILER #1

Average overall execution with wide swings across metrics

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OPERATIONAL EXECUTION – SCORECARDTOTAL MARKET – COMPLIANCE BY KPI

Retailer #1

TARGET RETAILER #1 RETAILER #2

PRODUCT AVAILABILITY

12 items avg by store 10 items 13 items

NUMBER OF FACINGS BRAND 1

25 facings avg by store 26 facings 26 facings

LINEAR METERS BRAND 1

35 mts avg by store 32 mts 35 mts

SPECIAL EXHIBITIONS

4 exhibits. Avg by store 2 exh. 4 exh.

POP MATERIAL 80% stores 85% 82%

PROMOTIONAL ITEM 80% stores 90% 89%

ACTION BY FUNCTION

Sales, Key Account Managers: Negotiation compliance with Retailer

Operations: Executional gap closure at store level

Marketing / Trade: Strategy compliance, New item review

Operational ExecutionRetailer #2

Score by Retailer Total Market Score

Retailer 1 not delivering on assortment, space or

promotions

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OPERATIONAL EXECUTION – SCORECARDSTORE #1 – COMPLIANCE BY KPI

TARGET STORE #1

PRODUCT AVAILABILITY 12 items 10 items

NUMBER OF FACINGS BRAND 1 25 facings 26 facings

LINEAR METERS BRAND 1 35 mts 32 mts

SPECIAL EXHIBITIONS 4 exhibits 2 exhibits

POP MATERIAL Presence Presence

PROMOTIONAL ITEM Presence Presence

Operational Execution

Store #1 Score

Photo evidence of gaps to close by store

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STORE TO-DO LIST – OPERATIONAL EXECUTIONRetailer #1

STORE #1

• Correct OOS for Huggies Supreme• Increase 7 facing units for Huggies• Implement an island or end shelf in the

store

STORE #2

• Increase +8 facings for KleenBebe • Implement an island or end shelf for

Huggies in the entrance

STORE #3

• Correct OOS for Huggies and KleenBebe • Implement a special exhibition for

KleenBebe in the entrance

Top 3 items to correct by store focuses field reps and drives largest impact on outcomes

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COMPETITIVE INTELLIGENCE – SCORECARD

Retailer #1

TOTAL MARKET – COMPLIANCE BY KPI

TARGET RETAILER #1 RETAILER #2

PRICE COMPLIANCE 15 items less

than 5% variance to target

15 items 6 items

SHARE OF FACINGS 25% KC 28% 30%

ADJACENCIES IN SHELF Brand segment OK OK

SHARE OF EXHIBITIONS

30% in checkouts 15% 30.%

SHARE OF POP 40% in shelf 40% 40%

ACTIONS BY FUNCTION

Sales, Key Account Managers: Retailer negotiation – get what was paid for

Operations: Visibility on competitive focus by store

Marketing / Trade: Opportunity and risk assessment

Retailer #2

Score by Retailer

Operational Execution

Total Market Score

Competitive positioning impacted for price in Retailer 2

and promotions in Retailer 1

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Store #1 Score

Operational Execution

COMPETITIVE INTELLIGENCE – SCORECARDSTORE #1 – COMPLIANCE BY KPI

TARGET STORE #1

PRICE COMPLIANCE

15 items less than 5% variance to target

10 items

SHARE OF FACINGS 25% KC 28%

ADJACENCIES IN SHELF Brand segment OK

SHARE OF EXHIBITIONS 30% in checkouts 15%

SHARE OF POP 40% in shelf 20%

Competitors picture

Competitors picture

Competitors picture

Competitors picture

Significant gaps in price and promotion in Store 1 need to be closed.

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SHELF EXECUTION – WHAT DOES THE PERFECT SHELF LOOK LIKE?

Recommended shelf driven by business portfolio strategy, shopper research, retailer negotiations

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SHELF EXECUTION SCORECARDTOTAL MARKET – COMPLIANCE BY KPI

Retailer 2 – 66%

TARGET RETAILER #1 RETAILER #2

BRAND SEQUENCE 80% of stores with

less than 10% of variance ofsequence, according price strategy

80% 87%

STAGE SEQUENCE 80% of stores with less than 30% of variance of small sizes at top, large sizes at bottom

14% 87%

BRAND STRATEGY 80% of stores with less than 30% of variance of All the stages for each brand

0% 12%

Retailer 1 – 33%

Score by Retailer

Operational Execution – 50%

Total Market Score

Combined executional performance not

meeting objectives in market

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OPERATIONAL EXECUTION – SCORECARDRETAILER 1 STORE 2 COMPLIANCE BY KPI

<10% of variance forsequence according

price strategy

<30% of variance of small sizes at top, large

sizes at bottom

<30% of variance of all the stages for each

brand

TARGET 15 items less than 5% variance to target 25% KC Brand segment

STORE #1 6.91 % 44.4% 77.78%

COMPLIANCE

PLANOGRAM REALOGRAM

Operational Execution

Store #1 Score = 33%

ACTION BY FUNCTION: Catman: Key stores follow-up, negotiation and strategy feedback/ Operations: Execution at store level and reaction/ KAM: Negotiation

Incidents1. Huggies Space Reduced2. Unexpected Big-Size Formats3. Vertical Stages Implementation

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COMMON SHELF GAPS ACROSS BOTH RETAILERS Impact to shopper perception of category due to shelf conditions

Price & Brand Disorder Horizontal Stages Implementation

New Big Size Formats Size Disorder

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ASSORTMENT COMPLIANCE

Retailer% Items

Not Authorized But In Store

% Items Authorized And In Store

% Items Authorized But Not In Store

Retailer 1 Store 1 29.3% 24.1% 46.6%Store 2 36.9% 27.7% 35.5%Store 3 43.1% 30.9% 26.0%Store 4 28.8% 33.6% 37.6%Store 5 28.7% 26.6% 44.8%

Store 6 26.9% 34.3% 38.8%Retailer 2 Store 1 9.0% 79.1% 11.9%Store 2 9.9% 74.6% 15.5%Store 3 13.5% 67.6% 18.9%Store 4 4.8% 69.8% 25.4%Store 5 8.2% 71.4% 20.4%Store 6 10.4% 74.0% 15.6%Store 7 11.3% 75.3% 13.4%Store 8 9.5% 67.4% 23.2%

Attempts to influence shopper behavior compromised due to lack of assortment compliance

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RETAILER 1 SUMMARY

Planned strategy is not being followed by the retailer. Evaluate need to reopen negotiations, adjust internal plans, etc.

Assortment in store not as planned. Evaluate retailer negotiations, pricing strategy, portfolio strategy.

New Large-Size formats missing from stores. Increase focus on promotions and distribution.

Close gap on size blocking within retailer.

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RETAILER 2 SUMMARY

Overall good implementation of the strategy – getting what has been agreed and paid for.

Good assortment compliance. Evaluate opportunity to test new products with this retailer.

Tight focus on closing OOS in specific stores.