Business Review

Business Review
The Context
All Great Marketing Plans Begin Here
S:\0\03856\002.bc\2001.yr\cmb\seminars\av2_busreview.ppt
Business Review Module - Presentation Flow

1. What is a Business Review/Why Bother
2. Structuring the Business Review Analysis

3. Translating Data into Key Issues and Opportunities 4. Opportunity Synthesis and Prioritization 5. Developing the Business Review Story
1. What is a Business Review?

The opportunity to stand back and evaluate your total
market, business situation and activity.
The process of identifying opportunities to move the
business forward and achieve competitive advantage in the marketplace. marketing plan.
The all-important first step in preparing a great
What is a Business Review?

The link in the planning process that drives insights for all types of plans.
Business Reviews
Long Term Plan Jan./Feb. Marketing Plan August
Category Plan September
What is the Business Review End-Point?

Synthesis and prioritization of facts and data into a
singular focus area for the brand. build the business.
Identification of concrete, actionable opportunities to
Foundation for the objective, marketing strategy, substrategy and key program development decisions.
Analysis is not an end in itself, its a means to an end The End Is
OPPORTUNITY IDENTIFICATION
Examples of Opportunities
Implement an integrated communication campaign to
build awareness of new Nestl Classic confections.
Test an in-store sampling program on Frutips.

Explore launching a dehydrated dessert range. Develop an in-store cross-merchandising program
between Nescafe and Coffee-mate.
Test increased coverage in the Pharmacy channel.

To stay focused on the most important issues for the
business.
To reduce dead-end number-tumbling.

To increase analysis productivity/ effectiveness.
If only we knew the answer to ...
Structuring the Business Review Analysis

Conduct a scan of the critical questions to identify the key issues to
analyze in greater depth. most critical questions.
Look for specific issues and opportunities on your brand relative to the
What are the Opportunities to Build the Business?

Based on:
The Market
The Consumer
Our Competitors
Our Channel Customers
Our Business Performance
10
The Critical Questions

The Market
What is the definition of the market we compete in (from a consumer
standpoint)?
What are market trends within key segments? Is the market growing or declining; is the trend consistent for sales
Taka, volume and profitability?
How can the size of the market be explained in terms of consumer
purchase behavior? What underpins category, segment and brand volumes in this market (i.e. high purchase frequency, purchases of large quantities, etc.)?
What are related/complementary category trends? What is the market outlook?
11

The Consumer
What are critical consumer needs in this category? Which represent
unmet needs?
What are usage and habit trends amongst consumers?

What consumer perceptions exist about this category and our brand? Who is our consumer target (influencer, purchaser, user, etc.)? What is the most relevant consumer segmentation in this category?
What is the composition of our consumer base relative to this
segmentation?
How does our consumer base break down in terms of usage (heavy,
medium, light users)?
What behavior change amongst which target consumer is most important
to building our brand?
12

The Consumer
What is the flow of the consumer purchase decision in this category? Where in the consumer purchase decision process can consumers be
most influenced?
What environmental factors trigger consumer need for the category (e.g.
media, special occasion, on shopping list, family input, price incentive)?
What specific factors trigger selection of our brand (i.e. what makes our
target consumer want to buy)?
What are household penetration, purchase frequency, purchase units/
buyer and share of requirement trends for our brand?
How would we categorize the level of loyalty in this category? How do consumers shop this category (e.g. price hunters, passive, etc.)?
13

Our Competitors
Who is our competition (from a consumer standpoint)? What are key competitors business trends? What are key competitors strengths and weaknesses? How do we perform versus competition in key areas (e.g. product,
package, pricing, availability, etc.)? relative to our brand?
What are price/unit (or per serving) trends for key competitors
What is the price elasticity for our brand versus competition? What is the consumers perception of our brands value equation
versus key competitors?
14

What are category sales trends by channel? Have there been any
important shifts?
Which segments and brands are winning/losing & why?

Which channels are most important for us and the competition? What is the trend in level of support for this category by customers?
(display, merchandising, pricing, etc.) by channel?
What role does our category play for customers; how does this differ
What are availability trends for our brand? How do our trade margins
compare versus competition in the key channels?
15

What are historical sales, market share and profit trends for our brand;
what are the drivers of these results?
What are the key financial and operating ratios on the brand?
Where have we sourced our volume; how will we create growth? (i.e.
growing the category vs. growing share within the category)? activity/spending and specific programs? drivers of these results?
What has been the historical effectiveness of our marketing What has been the success rate of new products? What are the key How are we performing versus our key substrategies (e.g. product and
packaging, integrated communication, customer business development)?
16
So How Do I Apply these Critical Questions?

A guide to focus data collection in the initial
development stages of a Business Review. Review as input to the Marketing Plan.
A tool to finetune and build on the existing Business
What are the Opportunities to Build the Business?

Business Reviews
Category Review
Long Term Plan
Marketing Plan Category Plan
The Market
The Consumer
Our Competitors
17
3. Translating Data into Key Issues and Opportunities

For each of these critical questions, we want to answer: Whats happening? Why? Ill bet ...... What are the opportunities?
18
Translating Data into Key Issues and Opportunities

Whats Happening?
Gather Business Performance Data
Why?
Opportunity Identification
Provide Rationale
Determine Whats Happening? Dont here
Hypothesize Why? Ill bet ...
Identify What are the opportunities?
Gather Causal Data Dont here
19

Whats Happening?
Collect and analyze the
Why? Ill Bet

Purpose is to focus
What are the Opportunities?

So what? What should we do
relevant data to answer the questions

Examples:

share/volume is down why is East higher than West why did we achieve these sales results
analysis and gather/ analyze causal data to address your hypotheses

Long list and prioritize
about it? action orientation
your bets so data search is limited to proving/disproving your hypotheses

Ask a series of
questions until there are no more to ask!
20

Whats Happening?
Nestl Milo is
Why? Ill Bet

A key barrier to Nestl
What are the Opportunities?

Explore the launch of an
stagnating in growth while the category grows at 5% per annum.
Milo is that the perception that Nestl Milo offers little nutritional value
intensive sampling and communication campaign that focuses on the nutrition of Milo and a means of getting kids to drink milk.
21
Documenting the Key Issues and Opportunities

Example
Statement of key Reversing the trend on the Nestl Milo is critical to the long-term issue or problem viability of the brand. plan must address Summary of quantitative, factual support
Nestl Milo has stagnated at 50 tonnes for 4 years with extensive
PFME funding.and the category continues to grow. Within the category, Milo decline\ have been offset by growth in Horlicks and Ovaltine.
Statement of preliminary opportunity
"Restage" the Nestl Milo brand including product improvements to
achieve 60/40 preference, new communication message to increase relevance, and reformulation. Intensive sampling campaign.
22
Which Are Good Key Issue/Opportunity Statements?

1. We need to increase consumer top-of-mind awareness of Nestl core chocolate brands to drive consumption Nestl confectionery brands have low consumer awareness versus competition
Opportunity: Increase advertising investment on core brands and increase in-store visibility
2. Weaker distribution and sales in the Pharmacy channel of Nutrition products indicate a serious area of underdevelopment for Nestl Only 2% of Nestl Nutrition sales come from Pharmacy Opportunity: Support medical detailing strategy with increased distribution and facings in the Drug channel
23
Which Are Good Key Issue/Opportunity Statements?
3. Nestl GUM is over-reliant in the Central Region 80% of sales in Central region
Opportunity: Develop a specific initiative for the East and West Region
4. A key issue for Nescafe is maintaining distribution in small grocery stores 200g and 50g are not maintaining distribution and does not offer a one time consumption Opportunity: Develop a specific product for the small grocery outlets
24
4. Opportunity Synthesis And Prioritization

Purpose: Isolate key drivers of a brands sales to enable prioritization of strategic options/ opportunities and focus of effort 1. Volume Modeling
2. Brand Strategic Gap Scorecard
25
Volume Modeling
Target Segment Population x Awareness x Distribution = Household Base x Trial Rate (Household Penetration) = Number of Trier Households x Retained User Rate/Repeat Rate = Retained User Households x Average Annual Volume/Frequency of Purchase = Total Annual Sales
26
Volume Model - Nestl Milo Example

Target Segment x Awareness x Distribution = Household Base x Trial Rate = Number of Households x Repeat Rate = Average Annual Volume 1.75MM households 80%
80%
1.12MM households 70% (user rate)
784M user households

70% 1.6 200ml/week
Total Sales
45,660M drinks consumed
27
Volume Modeling - Example

Alternate Opportunity Area(s) A) Expand target segment population by 50% (to 2.6MM) Incremental Sales ? Marketing Spend ? Risk/Degree of Difficulty High
B) Increase usage rate from 70% 80%
Medium
C) Increase consumer usage frequency (+1 drink/year/consumer)
Medium
28
Volume Modeling - Key Variables

Influenced by: Target Segment size of target market Population awareness rate trial rate distribution Awareness Distribution Trial Rate*
based on media spend and reach/frequency delivery perceived product relevance/uniqueness investment in listings
relevance of positioning and product product uniqueness degree of unsatisfied needs perceived value price acceptability expected product quality
* can be substituted by household penetration or usage rate
29
Volume Modeling - Key Variables

Retained User Rate/Repeat Purchase Average Annual Volume/ Frequency of Purchase Influenced by product delivery matches consumer expectations consumer acceptability (taste, performance, ) price/value acceptability

establishment of habit meaningful product advantage integration into consumption pattern price advantage/acceptability
30
Volume Modeling - So Where Does This Get Us?

Prioritization of Brand Focus of Effort:
expand target segment(s)? or increase awareness? or increase distribution? or increase trial? or improve product performance? or increase frequency of purchase?
Based on: incremental sales incremental marketing spending risk/degree of difficulty
What If?
31
Brand Strategic Gap Scorecard

A tool to assess the gap in our performance in key
strategic areas of the brands business.
Are we actually executing our strategic intent?
32

Area Competitive Position Desired Performance Identify 2-3 areas of superiority or uniqueness vs. competition Actual Performance How are we performing Gap Root Cause for Gap Indicated Action
Focus of Effort
Trial, re-trial, continuity, increased consumption frequency, etc.

Benefit/price relationship
Quantitative level achieved
Value Proposition
How are we performing
Effort Priorities
List of 5-6 strategic initiatives
How many completed
Product and Packaging
Target performance (e.g. 60/40, taste profile)
Test results
33

Area Integrated Communication Desired Performance Image/equity Actual Performance Image scores Gap Root Cause for Gap Indicated Action
Media
Reach/frequency/GRPs, share of voice, awareness level Avg. price vs. competition Feature price vs. competition Channel price targets Distribution targets
Actual results of media plan
Pricing
Actual pricing gaps versus target Actual results
Availability
In-Store Effectiveness
Display targets Shelving targets Merchandising targets
Actual results by channel
34
Brand Strategic Gap Scorecard - Example

Area Competitive Position Desired Performance 60/40 product preference 55% leadership share of voice Actual Performance 40/60 30% share of voice Gap (20) points (25) points 20 points Root Cause for Gap Milo is not being prepared correctly High spend in Sponsorship Ineffective sampling program NA Indicated Action Intensive sampling Focus on sampling / SOV Refocus sampling effort and tie in to outlet coverage NA
Focus of Effort
30% trial level through sampling
Sampling to achieve 10%
Availability
75% distribution at grocery channel
80% achieved plus
NA
Value Proposition
Superior rich chocolate delivery at parity with other single serve beverages on per serving basis Competitively priced versus other value-added value beverages on a per serving basis
Parity price achieved; product not 60/40 preferred Achieved
Product/ Package
Consumer preparation Lack of single serve NA
Awareness Introduce RTD
Pricing
NA
NA
35
Brand Strategic Scorecard - Gap Analysis

Alternate Opportunity Area(s) A) Improve product performance ratio to 60/40 Incremental Sales ? Marketing Spend ? Risk/Degree of Difficulty High
B) Invest in increased media support (build SOV to 55%)
Low
C) Increase sampling effort
Low
36
5. Developing The Business Review Story

Synthesis of business overview: hows business on
the brand and why explains key reasons for results
Can be tackled as a news story
headline concept sub-headlines text
37
The Business Review Story - Coffee-Mate Example

2000 was another disappointing performance year for Coffee-Mate with sales down -10% and profit flat versus 1999.
Over the past 4 years, the brand has experienced a rapid decline in household penetration (a loss of approximately 40% of our user base) as consumers have shifted away from the static powder segment of the whitening market into the growing liquid segment. On a combined powder and liquid basis, our brand share has declined from 34% in 1999 to 27% in 2000, and within powder, share has declined from 45% to 40%.
38
The Business Review Story - Coffee-Mate (contd.)

Beyond losing share to other whitening occasions (e.g. liquid), Coffee Mate is also being hurt by the continued growth of Private Label powders (19% share), driven by aggressive pricing. Average selling prices for Control Label were up to 40% less than those for Coffee-Mate in 2000. Critical to the long-term reversal of this business performance is consideration of a launch into the liquid segment followed by a plan to minimize losses on powder including product reformulation, aggressive product cost savings and targeted investment in PFME support.
39
Characteristics of a Good Business Review Story

Provides sufficient business context (past year, history).
Sufficiently explains the why behind business performance.

Identifies how the reader should be thinking about the brands performance (is this good/bad/indifferent). Self contained (like newspaper headlines)
40
Business Review Module - Presentation Flow

1. What is a Business Review/Why Bother

3. Translating Data into Key Issues and Opportunities 4. Opportunity Synthesis and Prioritization 5. Developing the Business Review Story
41

Business Review

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Business Review

Încărcat de

Drepturi de autor:

Formate disponibile

Business Review

Business Review Module - Presentation Flow

2. Structuring the Business Review Analysis

1. What is a Business Review?

market, business situation and activity.

The process of identifying opportunities to move the

The all-important first step in preparing a great

What is a Business Review?

Long Term Plan Jan./Feb. Marketing Plan August

Category Plan September

What is the Business Review End-Point?

singular focus area for the brand. build the business.

Identification of concrete, actionable opportunities to

Analysis is not an end in itself, its a means to an end The End Is

build awareness of new Nestl Classic confections.

Test an in-store sampling program on Frutips.

between Nescafe and Coffee-mate.

Test increased coverage in the Pharmacy channel.

2. Structuring the Business Review Analysis

To reduce dead-end number-tumbling.

If only we knew the answer to ...

Structuring the Business Review Analysis

analyze in greater depth. most critical questions.

What are the Opportunities to Build the Business?

Our Channel Customers

Our Business Performance

The Critical Questions

Taka, volume and profitability?

How can the size of the market be explained in terms of consumer

The Critical Questions

What are usage and habit trends amongst consumers?

What is the composition of our consumer base relative to this

medium, light users)?

What behavior change amongst which target consumer is most important

to building our brand?

The Critical Questions

media, special occasion, on shopping list, family input, price incentive)?

target consumer want to buy)?

What are household penetration, purchase frequency, purchase units/

buyer and share of requirement trends for our brand?

The Critical Questions

package, pricing, availability, etc.)? relative to our brand?

versus key competitors?

The Critical Questions

Which segments and brands are winning/losing & why?

(display, merchandising, pricing, etc.) by channel?

compare versus competition in the key channels?

The Critical Questions

what are the drivers of these results?

packaging, integrated communication, customer business development)?

So How Do I Apply these Critical Questions?

development stages of a Business Review. Review as input to the Marketing Plan.

A tool to finetune and build on the existing Business

What are the Opportunities to Build the Business?

Long Term Plan

Marketing Plan Category Plan

Our Channel Customers

Our Business Performance

3. Translating Data into Key Issues and Opportunities

Translating Data into Key Issues and Opportunities

Determine Whats Happening? Dont here

Hypothesize Why? Ill bet ...

Identify What are the opportunities?

Gather Causal Data Dont here