December 3, 2012 CONFIDENTIAL

Winning in FMCG ± case

study and discussion
Prepared for Consumer Marketing MBA class, Georgetown

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.
 Our logo and approach to Brand Strategy

Dynamic  modeling  
We  use  System  Dynamics  
modeling  to  project  deep  data-­‐
driven  insights  into  the  future.    
‡ Brand  and  Portfolio  growth  
strategy:  using  our  Growth  Levers  
approach  to  support  dynamically  
Collaboration   informed  decisions  
Always  explore  new   ‡ Workshops  ʹ  such  as  scenarios,  
impactful  ways  to  work   STRAP,  ideation  workshops:  to  
together  with  our  clients,   merge  your  knowledge  and  your  
to  make  best  use  of  their   data,  art  and  science,  to  build  clarity  
knowledge  and  create   and  confidence  on  your  strategy  
shared  clarity  and   ‡ War  gaming  and  Microworlds:  
confidence   computerized  business  games  
replicating  your  brand  challenges  in  
a  risk-­‐free  environment,  to  imbed  
Consumer  and  shopping  analytics   learnings  into  your  teams  

Good  foresight  has  to  be  grounded  on  facts.  

KƵƌǁŽƌŬĂůǁĂLJƐůĞǀĞƌĂŐĞƐĐůŝĞŶƚƐ͛ĐŽŶƐƵŵĞƌ͕
shopper  and  business  data  

2
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Agenda

Methodology  and  short  case  study  ʹ  co-­‐presented  with  Coca-­‐Cola  

executives  at  Esomar  Global  Research  Conference,  Sept.  2011  
 
 
Case  study  application  ʹ  Unilever,  Hair  care  industry,  India  
 
 
Summary  and  discussion  

3
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FROM A SNAPSHOT
TO A MOVIE
PUSHING THE BOUNDARIES
OF MARKETING ROI

Ram Krishnamurthy, Vittorio Raimondi, Patricio Pagani

AS A BUSINESS
WE HAVE TO SET
CLEAR FINANCIAL
TARGETS

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

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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.

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WE OFTEN
RESEARCH
&21680(56·
ATTITUDES
AND BEHAVIOURS
TO DEVELOP
FORWARD
LOOKING
SEGMENTATIONS
Merging attitudes and behaviors
allows us to provide a view on how
current preferences may evolve

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ALTHOUGH
INSIGHTFUL,
SEGMENTATIONS
ALONE CANNOT
ALLOW US TO
DEVELOP
QUANTIFIED
VIEWS OF FUTURE
SCENARIOS
THEY ARE STILL
A PICTURE ²
NOT A MOVIE

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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

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TO BUILD YOUR
BRAND, YOU NEED
TO RECRUIT
AND RETAIN
9
CONSUMERS.
TO ACHIEVE THIS,
ALL YOU NEED Brand consumers
TO DO IS FOCUS
ON THE FLOWS
(IN & OUT)
8

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YOUR CONSUMER
BASE IS LIKE A Brand  Loyalists  
SYSTEM OF INTER-­
CONNECTED
TANKS
The pipes represent conversion
opportunities and risk of losing
consumers.
Non  Brand  Users    
Occasional  
1 Managers can influence Brand  Users  
WKHµSLSHV¶QRWWKH
reservoirs

2 Each µSLSH¶PD\KDYHD
different impact on the
system

Non  Category  Users  

3 Your growth strategy
depends on what pipes
you focus on

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MARKET
RESEARCH CAN Brand  Loyalists  
QUANTIFY THE
SIZE OF THE PIPES
1
DYNAMIC
MODELING WILL
IDENTIFY THE Non  Brand  Users    
Occasional  

HIGH LEVERAGE Brand  Users  

PIPES TO GROW
THE BRAND 2

Non  Category  Users  

2 1 ...
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THIS WILL REVEAL
GROWTH Brand  Loyalists  
PATHWAYS, E.G.:

Recruit from competitors

Recruit from other categories

Non  Brand  Users    
Occasional  
Win transactions Brand  Users  

By demographics,
by regions, etc.

Non  Category  Users  

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Baths & Pipes like Behaviors & Attitudes
Behaviors Attitudes

Purchase Intent
Brand and Category
Consumption Frequency vs Brand Preference
Unhealthiness Perception

What If Simulations on the Levers

15
Detailed description of the Opportunities
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Case study; illustrative and disguised

ALIGNING YOUR MARKETING PLANS

AGAINST KEY LEVERS & SEGMENTS
Potency of flow rates
WKHµSLSHV¶ Marketing plans
Product Product Product
36%   Package
E.g., recruit consumers Package
into the category Equipment

24% Event Product Campaign

16% Package Product

12% Equipment

12% Campaign

100%

Key consumer targets

#1 #3 #2
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THE
FUNDAMENTAL
CONCEPT
APPLIES ACROSS
INDUSTRIES

IT IS ABOUT HOW ‡ Latent patients ‡ Non users

YOU DEFINE THE ‡ Lapsed patients ‡ Single product users

‡ Severe patients ‡ Multiple product users
TANKS ‡ ... ‡ ...

ALLOWING TO ‡ Penetrate latent market ‡ Win new users

REVEAL YOUR ‡ Improve compliance ‡ Retain high value users
‡ Share of new patients ‡ Add multiple services
GROWTH ‡ .... ‡ ....
PATHWAYS
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FROM A GLOBAL HIGH
Opportunity
PERSPECTIVE,
THIS HAS LED TO
NEW WAYS TO
CLUSTER HIGH HIGH
OPPORTUNITY POTENTIAL
MARKETS TO REVERSE CHURN
DECLINE OR
Quantified brand risk and SUSTAIN
GROWTH
opportunity across geographies LOW HIGH
enables the identification of regional Risk Risk
clusters OPPORTUNITY HIGH RISK OF
TO STIMULATE POTENTIAL OR
GROWTH CONTINUED
DECLINE

LOW
Opportunity

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 Case study; illustrative and disguised

MASSIVE IMPROVEMENT IN ROI FROM Market type 1

SCALING INITIATIVES ACROSS REGIONS

Market type 2
Market type 3

80%
High
Favorable Churn
70%

60%
Frequency opportunity
(% of current volumes)

50%

40%

30%

20%

Low
10%
Churn Unfavorable
0%
0% -­‐10% -­‐20% -­‐30% -­‐40% -­‐50% -­‐60% -­‐70% -­‐80%
Frequency  risk    
(%  of  current  volumes)   Size of bubble = Current Volume

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Agenda

Methodology  and  short  case  study  ʹ  co-­‐presented  with  Coca-­‐Cola  

executives  at  Esomar  Global  Research  Conference,  Sept.  2011  
 
 
Case  study  application  ʹ  Unilever,  Hair  care  industry,  India  
 
 
Summary  and  discussion  

20
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Starting Point: What Are The Growth Levers And
Consumer Pathways For Your Brand? Disguised  case  
study  

Hair  Care  Example  

Growth  Lever   Consumer  Pathway  
Recruit  into  the  Category  populations  that  do  not  
Expand  The  Category   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  

21
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 Disguised  case  study  

³&OLQLF´&RQVXPHU5HVRXUFH$UFKLWHFWXUH
Recruit  into  Multiple  
Resource   Product  Usage  
Consumer  
flow   Clinic   Clinic     Clinic    
exclusive   Loyal   VIPs  
users   users      
 -­‐  Shampoo  only    -­‐  Multiple  products    -­‐  Added  service  users  

Loyalize  
Marketing  initiatives  designed  to   Consumer   Upgrade  to  
activate  most  potent  levers,  e.g.,:   Base   Premium  
Products  
Rural   Remove   Brand  
Activation   Barriers   Ambassadors  

Clinic   Clinic    
Portfolio   Portfolio    
users   users  
 -­‐  Shampoo  only    -­‐  multiple  products  
Increase  Frequency  
of  Wash   Penetrate  
Expand  the  
Existing  Market  
Category  

Non  Clinic  
Non  users   Infrequent  
users  
users  

Shampoo  only   Multiple  products  users   Added  value  

frequent  users   (e.g.,  conditioner)   users  (e.g.  salons)  

22
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Clinic Resource Architecture Forms the Backbone of a
System Dynamic Model

Snapshot  of  System  Dynamics  model  

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

Final  step    -­‐  deep  dives  into  

Growth  lever  priorities  to  achieve  and  accelerate  growth  ʹ  illustrative
Expand  The  Category
Increase  Frequency  Of  Wash
Penetrate  Existing  Market
Loyalize  Consumer  Base
Recruit  Into  Multiple  Product  Usage
Upgrade  To  Premium  Products  &  Services
the  growth  lever  
 
Once  the  growth  lever  priorities  are  
identified,  the  final  step  is  to  profile  
1st  priority   the  growth  lever  to  understand  how  
to  activate  it  
2   This  involves  leveraging  all  data  
available  to  address  questions  such  
as:  
‡ Who  (demographics)  
‡ What  (competition)  
‡ Why  (benefits  and  motivations)  
3  
‡ Shopping  behaviour  

2020  growth  target

24
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 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?  

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

Emerging  Moment  

Summarize  here  your  draft  portrait  of  the  emerging  Moment.    

25
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Agenda

Methodology  and  short  case  study  ʹ  co-­‐presented  with  Coca-­‐Cola  

executives  at  Esomar  Global  Research  Conference,  Sept.  2011  
 
 
Case  study  application  ʹ  Unilever,  Hair  care  industry,  India  
 
 
Summary  and  discussion  

26
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CHALLENGE Static / Need
Match Trends Strategic
Programs Research , Planning
with Goals ? Snapshots / tools, not just
Rearview predictive
data models

SOLUTION Stocks Behavior System

(Goals) and (Current Dynamics
Flows Reality) x Model +
(change Attitude Scenario
through (Future Planning Tool
marketing) Possibility) for Marketers
Framework Segmentation

APPLICATIONS Market Marketing Ambition vs

Clusters, Plans Reality Check
Scalable accountable to drive
Global to clear investment
Initiatives volume decisions
targets

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