winning in fmcg case - foresight...

This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization. This material was used by Foresight Associates during an oral presentation; it is not a complete record of the discussion.

CONFIDENTIAL

Winning in FMCG case study and discussion Prepared for Consumer Marketing MBA class, Georgetown

December 3, 2012

2 CONFIDENTIAL, cannot be shared or emailed without written permission from Foresight Associates

Our logo and approach to Brand Strategy

Consumer and shopping analytics

Good foresight has to be grounded on facts.

shopper and business data

Dynamic modeling

We use System Dynamics modeling to project deep data-‐driven insights into the future.

Collaboration

Always explore new impactful ways to work together with our clients, to make best use of their knowledge and create shared clarity and confidence

Brand and Portfolio growth strategy: using our Growth Levers approach to support dynamically informed decisions

Workshops such as scenarios, STRAP, ideation workshops: to merge your knowledge and your data, art and science, to build clarity and confidence on your strategy

War gaming and Microworlds: computerized business games replicating your brand challenges in a risk-‐free environment, to imbed learnings into your teams


Agenda

Methodology and short case study co-‐presented with Coca-‐Cola executives at Esomar Global Research Conference, Sept. 2011 Case study application Unilever, Hair care industry, India Summary and discussion

FROM A SNAPSHOT TO A MOVIE PUSHING THE BOUNDARIES OF MARKETING ROI

Ram Krishnamurthy, Vittorio Raimondi, Patricio Pagani

CONFIDENTIAL, cannot be shared or emailed without written permission from Foresight Associates 5

AS A BUSINESS WE HAVE TO SET CLEAR FINANCIAL TARGETS


AND, WE NEED TO TRANSLATE OUR BUSINESS GOALS INTO MARKETING PLANS We expect market research studies to support marketing strategy


HOWEVER, MARKET RESEARCH STUDIES PROVIDE SNAPSHOTS.

AT BEST THEY ARE A SERIES OF SNAPSHOTS LOOKING AT THE PAST, SIMILAR TO THE WAY WE LOOK AT PHOTOS IN FAMILY ALBUMS. And when they look at the future they tend to be qualitative and unable to support decision making.


WE OFTEN RESEARCH

ATTITUDES AND BEHAVIOURS TO DEVELOP FORWARD LOOKING SEGMENTATIONS Merging attitudes and behaviors allows us to provide a view on how current preferences may evolve


ALTHOUGH INSIGHTFUL, SEGMENTATIONS ALONE CANNOT ALLOW US TO DEVELOP QUANTIFIED VIEWS OF FUTURE SCENARIOS

THEY ARE STILL A PICTURE NOT A MOVIE


OUR APPROACH ENABLES US TO TRANSLATE A SERIES OF FRAMES INTO A MOVIE, AND TO PLAY THE MOVIE FORWARD MARKETERS CAN TEST AND REHEARSE ALTERNATIVE MOVIES, OR GROWTH PATHWAYS, TO ACHIEVE THEIR BUSINESS GOALS

CONFIDENTIAL, cannot be shared or emailed without written permission from Foresight Associates

TO BUILD YOUR BRAND, YOU NEED TO RECRUIT AND RETAIN CONSUMERS.

TO ACHIEVE THIS, ALL YOU NEED TO DO IS FOCUS ON THE FLOWS (IN & OUT)

Brand consumers


YOUR CONSUMER BASE IS LIKE A SYSTEM OF INTER-CONNECTED TANKS The pipes represent conversion opportunities and risk of losing consumers.

Brand Loyalists

Occasional Brand Users

Non Brand Users

Non Category Users

Managers can influence

reservoirs

1

Each different impact on the system

2

Your growth strategy depends on what pipes you focus on

3


MARKET RESEARCH CAN QUANTIFY THE SIZE OF THE PIPES

Brand Loyalists


Non Brand Users

Non Category Users

1

2

2 1 ...

DYNAMIC MODELING WILL IDENTIFY THE HIGH LEVERAGE PIPES TO GROW THE BRAND


THIS WILL REVEAL GROWTH PATHWAYS, E.G.:

Brand Loyalists


Non Brand Users

Non Category Users

Recruit from competitors

Recruit from other categories

Win transactions

By demographics, by regions, etc.


15

Baths & Pipes like Behaviors & Attitudes

vs Purchase Intent Brand Preference Unhealthiness Perception

Brand and Category Consumption Frequency

What If Simulations on the Levers Detailed description of the Opportunities

Behaviors Attitudes


36%

24%

16%

12%

12%

Potency of flow rates

Product

Package

Marketing plans

Product

Package

Equipment

Event Product Campaign

Product

Equipment

Campaign

Package

Product

100%

Key consumer targets #1 #3 #2

E.g., recruit consumers into the category

ALIGNING YOUR MARKETING PLANS AGAINST KEY LEVERS & SEGMENTS

Case study; illustrative and disguised


THE FUNDAMENTAL CONCEPT APPLIES ACROSS INDUSTRIES

Latent patients Lapsed patients Severe patients ...

Non users Single product users Multiple product users ...

IT IS ABOUT HOW YOU DEFINE THE TANKS

Penetrate latent market Improve compliance Share of new patients ....

Win new users Retain high value users Add multiple services ....

ALLOWING TO REVEAL YOUR GROWTH PATHWAYS


HIGH POTENTIAL CHURN

HIGH RISK OF POTENTIAL OR CONTINUED DECLINE

HIGH OPPORTUNITY

TO REVERSE DECLINE OR

SUSTAIN GROWTH

OPPORTUNITY TO STIMULATE

GROWTH

LOW Risk

HIGH Risk

LOW Opportunity

HIGH Opportunity FROM A GLOBAL

PERSPECTIVE, THIS HAS LED TO NEW WAYS TO CLUSTER MARKETS Quantified brand risk and opportunity across geographies enables the identification of regional clusters


MASSIVE IMPROVEMENT IN ROI FROM SCALING INITIATIVES ACROSS REGIONS

0%

10%

20%

30%

40%

50%

60%

70%

80%

-‐80%-‐70%-‐60%-‐50%-‐40%-‐30%-‐20%-‐10%0%

Frequency risk (% of current volumes) Size of bubble = Current Volume

Freq

uenc

y op

portu

nity

(%

of c

urre

nt v

olum

es)

High Churn

Low Churn Unfavorable

Favorable

Market type 1

Market type 2

Market type 3

Case study; illustrative and disguised


Agenda



Starting Point: What Are The Growth Levers And Consumer Pathways For Your Brand?

Hair Care Example Growth Lever Consumer Pathway

Expand The Category Recruit into the Category populations that do not currently use commercial products

Increase Frequency Of Wash Recruit infrequent users into a daily habit

Penetrate Existing Market Recruit non Clinic product users

Loyalize Consumer Base Build share of usage in current consumer base

Recruit Into Multiple Product Usage Convert into multiple product users

Upgrade To Premium Products & Services Introduce value added products and services

Disguised case study


Shampoo only frequent users

Multiple products users (e.g., conditioner)

Added value users (e.g. salons)

Clinic Portfolio users -‐ Shampoo only

Clinic exclusive users -‐ Shampoo only

Non users Infrequent users

Clinic VIPs -‐ Added service users

Expand the Category

Resource Consumer flow

Recruit into Multiple Product Usage

Clinic Portfolio users -‐ multiple products

Clinic Loyal users -‐ Multiple products

Loyalize Consumer Base

Upgrade to Premium Products

Penetrate Existing Market

Disguised case study

Remove Barriers

Non Clinic users

Brand Ambassadors

Increase Frequency of Wash

Rural Activation

Marketing initiatives designed to activate most potent levers, e.g.,:


Clinic Resource Architecture Forms the Backbone of a System Dynamic Model

Snapshot of System Dynamics model


Dynamic Leverage Point Analysis To Identify The Most Potent Growth Levers To Accelerate Growth

Expand The Category

Increase Frequency Of Wash

Penetrate Existing Market

Loyalize Consumer Base

Recruit Into Multiple Product Usage

Upgrade To Premium Products & Services

2020 growth target

1st priority

2

3

Growth lever priorities to achieve and accelerate growth illustrative Once the growth lever priorities are identified, the final step is to profile the growth lever to understand how to activate it

This involves leveraging all data available to address questions such as:

Who (demographics)

What (competition)

Why (benefits and motivations)

Shopping behaviour

Final step -‐ deep dives into the growth lever

Disguised and illustrative


Pen Portrait / Emerging My Moment Summarize here your target in terms of: Growth lever / Entry Occasion

What From which Brand or Category do you intend to source volumes from?

When & with Whom Visualize the moment: Weekend vs. weekday? What time of the day. Is it with family members, with friends, alone?

Why What Motivational space are you trying to fill? Which Tension is it addressing? Which Functional and Emotional benefits are emphasized? Which Product characteristics?

Emerging Moment

Summarize here your draft portrait of the emerging Moment.

Including YA What are the main differences with YA, if any?


Agenda



Match Programs with Goals ?

Static / Trends Research , Snapshots / Rearview data

Need Strategic Planning tools, not just predictive models

CHALLENGE

Market Clusters, Scalable Global Initiatives

Marketing Plans accountable to clear volume targets

Ambition vs Reality Check to drive investment decisions

APPLICATIONS

Behavior (Current Reality) x Attitude (Future Possibility) Segmentation

System Dynamics Model + Scenario Planning Tool for Marketers

SOLUTION Stocks (Goals) and Flows (change through marketing) Framework

THANK YOU.

1624 HARMON PLACE SUITE 222 MINNEAPOLIS, MN 55404

EMAIL: [email protected] TEL: +1 612 607 2002

winning in fmcg case - foresight...

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