Winning where it matters

A focused approach to capturing growth

Presented by-

Arindam Ghatak (UM17190)

Astha Gaur (UM17196)
Pranav Khanna (UM17218)
Saurav Raychoudhury (UM17226)
Soumyadip Ghosh (UM17231)
Ankit Mathur (UM17260)
Avinaba Deb (UM17264)
 Introduction
• This report summarizes the findings of the 2012 Customer and Channel Management (CCM) Survey,
providing an up-to-date perspective on the practices of top-performing Consumer packaged goods
(CPG) companies for capturing growth after the US economy continued its slow and uneven
recovery.

• The results suggest that companies employing winning practices can set itself apart from the
competition and tackle future challenges

• The winning practices identified are placing forward-looking strategic bets, leveraging data and
advanced analytics to drive decision making, collaborating more effectively with top retail
customers, and building industry-shaping capabilities

• Unifying all these practices lets a company achieve greater focus and winners deploy these with
greater magnitude and consistency
 Survey Methodology
 More than 50 companies participated in the 2012 CCM survey

 These companies had a combined sales of close to $160 billion in the US. Companies from
home care, personal care, food, beverages industry were surveyed – representing majority of
the CPG industry

 About 220 CPG executives participated in the survey

 CCM survey links the company’s financial performance and in-market results with self
reported business practices to identify the winning practices

 Companies that participated in the survey include players from home-care, personal-care,
food and beverages industry – that broadly represented the CPG industry

 The 2012 survey features new modules on the Hispanic market, sales technology, and the
“battle at the shelf.”
 External Factors
 Slow and uneven recovery in 2010 and 2011

 Fast-changing environment

 Consumer base becoming increasingly diverse demographically

 Change in consumer mindset

 Changing retail landscape with more retailers investing in their own private labels

 Emergence of new technologies like IoT, Big Data, etc.

 E-commerce and digital marketing fundamentally changed the game

 Massive political and economic influence over both national and global policymaking

 Aging population which can lead to a serious labor shortage and rising tax rates
 High Growth Channels
Club Stores

• In a recent survey of 132 CPG and retail executives,

most of the survey respondents (81.7 percent) agreed
or strongly agreed that the warehouse club channel is
a strategic sales channel for CPG companies (Deloitte
survey)
• At an annual growth of 8%, this non-traditional
channel has four times the sales of the next brick and
mortar stores.
• Lot of cross channel shopping for food, beverage,
household goods, and personal care across retailers,
and club stores plays an important role.
• Packaging and bundling of products on shelves. Way to
increase share of wallet of consumers
 High Growth Channels
Dollar Stores

• The dollar channel is a $55.6 billion industry in the

United States that is somewhat consolidated, with the
top three dollar-store retailers accounting for a large
(52.3 percent in 2011) and increasing share of the
channel
• Core dollar- store consumers, broadly speaking, have
lower incomes and self-report lower economic status
than non-dollar-store shoppers
• Hence it represents opportunities for CPG
manufacturers to gain access to consumers who had
limited access to their products before
• With a combination of unique product offering and
relationship building, the dollar stores have seen a
growth of 16%
 High Growth Channels
Discounted Limited Assortment

• The DLA channel consists of small (typically 5,000-

to 10,000-square-foot), food-focused stores with a
limited assortment and an emphasis on private label

• The channel is growing at twice the rate of grocery.

• Winners in DLA grew, on average, 16 percentage
points more than category growth

• They are also more likely to provide additional

services such as shelf-ready packaging and private-
label products
 High Growth Channels
E-Commerce

• Online sales within the CPG industry represents a

market share between $15-$50 billion
• According to a study by GE Capital, more than 80%
of people research online before buying in a physical
store, underscoring how important the power of
reviews can be. Many consumers are using online
channels to search for product reviews.
• The traffic received on website product pages is
highly relevant, especially when purchase intent is
high. Website traffic monitoring
• Partnering with technology companies to improve
sales and revenue. Use of Big Data to provide
analytics
• Partnering with key online and multichannel
retailers, adjusting their product offerings and price
points
 High Growth Channels
E-Commerce

• Online sales within the CPG industry represents a

market share between $15-$50 billion
• According to a study by GE Capital, more than 80%
of people research online before buying in a physical
store, underscoring how important the power of
reviews can be. Many consumers are using online
channels to search for product reviews.
• The traffic received on website product pages is
highly relevant, especially when purchase intent is
high. Website traffic monitoring
• Partnering with technology companies to improve
sales and revenue. Use of Big Data to provide
analytics
• Partnering with key online and multichannel
retailers, adjusting their product offerings and price
points

CPG companies are better performers in
4 key areas
Heavy investment in emerging channels
CPG companies can gain market share
through shelf performance
Key Learnings
• Bold investments in growth areas
• Advanced use of data analytics for pricing and promotion
• Prioritization of retailer relationships
• Commitment to talent development and strategic planning
efforts
• Best-practice sales strategy emphasize on customer
collaboration and focuses on investing in next-generation
capabilities .
• Specifically, focus on dollar, club and online channels, joint
retailer-manufacturer initiatives and time spent nurturing
high-potential sales talent
• Using advanced analytics to drive pricing, promotion and
shelf management strategies is the need of the hour
• companies using analytics as a strategic tool enjoy top-line
growth and share-price improvement, while their peers
grapple with a flat to declining market.
Hispanic consumers are a key growth
segment
Emerging sales technology needs to be
incorporated by every retail company
Invest in high-growth channels to win
• CPG companies that win with Hispanics, focused on tailored
products and marketing, created better in-store experiences
with retailers, and increased Hispanic-focused resources and
capabilities
• New technologies such as internal systems, data sharing with
retail partners, and the high-growth area of shopper micro-
targeting that includes smart-phone apps, mobile couponing
and other interactive marketing strategies need to be
adopted to win
• Winning organizations are three times more likely to invest in
high-growth channels, such as club, dollar stores, discount,
and e-commerce, with significant payoff. These emerging
areas contributed more than 25 percent of total growth, with
winning companies achieving much more channel growth
than their category peers