BAT Marketing Training 1 40 - (Marketing Tools)

BAT Marketing Training 1 40- [Marketing Tools ]
ing Training 1 keting Tools]
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http://legacy.library.ucsf.edu/tid/ecm70a99/pdf
Trade Marketing & Distributio n

AGEND A
TRADE MARKETING & DISTRIBUTION * Missio n * (Overall) Objective & Strateg y
TRADE COVERAG E * Objectives & Strateg y * Classification of outlet s * Call Frequency * Organisation structure/Trade Channel s
AN EXAMPLE OF REGIONAL COVERAG E * The Netherland s
TRADE COVERAGE CASE STUDY

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DIRECTION AND FOCU S
MISSION & OBJECTIVES
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MISSIO N We will build category leadership by becomin g the "Benchmark supplier" to all customers a t wholesale and retail level in regional and loca l markets for tobacco products
Trade Marketing & Distributio n Missio n We will achieve status of "Benchmark Supplier" b y - Being a Volume Supplie r - Being recognised as the Market Authority - Pursuing a Policy of Mutuality - Delivering an Improving Contribution and Percentage Profit
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Objective s To secure and maintain a competitive edg e To improve profit and maximise shar e To generate funds for market investment s To seek for category leadershi p To seek for the status of "Benchmark supplier "
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TradeMarketingOverall Objectiv e To achieve our strategic brands ' objectives by securing the active support of the wholesale and retail trad e
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Brands' Objectives Achieve market share and profit target s - Availability to target consumer s - Appropriate stock levels in trad e - Maximum exposure to target consumer s - Promotions to achieve loyalty and tria l
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Opportunities Exist To
- Distribute selectivel y - Target promotions to predefined groups of consumer s - Achieve higher effectiveness and acceptance o f display and promotional activities in each trade channe l
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The Environmen t
- The trade environment is changin g - The pace of change in our trading relationships is acceleratin g - The increasing power of the trade influences market s - Our relationships with our trade partners affect ou r ability to service the end consume r
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Trade Coverage Strategy - To determine the Classification of Outlet s - To determine the Call Frequencies for each outle t - To determine the organisational consequences
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Classification Criteri a - Type of outle t - Total tobacco sale s - Opportunity to impact business and authority o f store manager to take decision s - Shopper profil e
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Type of outlet s - Tobacconist s - Food outlets - Horeca outlets - Petrol station s - Institution s (museums, theatres ) - Leisur e (swimmingpools, snookercentres, tennisclubs ) - Othe r (bookshops/newspaper stalls, drugstores)
TotalTobacco Sale s
Total volume of all manufacturers in sticks per year sol d
1. 2. 3. 4. 5. 6. 7.
Over 25 million sticks/yea r 7 .5 to 25 million sticks/yea r 2 .0 to 7 .5 million sticks/yea r 0 .5 to 2 .0 million sticks/yea r 0 .2 to 0 .5 million sticks/yea r 0 .1 to 0 .2 million sticks/yea r Upto 0 .1 million sticks/year
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Opportunity classe s
A. Improve distribution, price and merchandisin g B. Improve distribution, price or merchandisin g C. Impact stock management
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Shopper Profil e
Guidelines need to be developed locally according t o brand prioritie s * High Quality Outlet s - Meets BAT defined targetted consumer's profil e * Standard Outlet s - Average shopper profile
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Profile Guidelines continue d
- Young male shopper s - High volume store traffi c - High traffic impulse outlet s - Opportunity for brand switching
Call Frequency
- To determine seperately according to practical delivery requirement s - To adapt the proposed frequencies locally according to : * competitive environmen t * purchasing/merchandising behaviou r * customers needs
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Calls per yea r
Class Al A2 A3 A4 A5 A6 A7 B1 B2 B3 B4 B5 B6 B7 Cl C2 C3 C4 C5 C6 C7 Normal Outlet 52 26 12 12 12 6 6 26 12 12 12 6 6 4 12 26 6 4 2 2 2 Hig h Quality outle t 52 52 26 26 12 12 6 26 26 26 12 6 4 4 52 12 12 6 4 2 2
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Organisation Structur e - To focus on consumer need s serviced by different channels - Specialisation in the Sales Forc e must mirror the needs of the trad e
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Objective s - To identify Tobacco Selling outlet s - To identify Accounts owning o r controlling multiple outlet s - To identify Customers with simila r merchandising and purchasing behaviou r
> TRADE CHANNELS
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THE STRUCTURE
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Organisation Structur e - Geographic zones: size of the Territor y - The size of a territory is determine d by coverage and call frequency criteri a - The number of subordinates is determined by : * market siz e * trade structure * service levels

Organisation Structur e - Market size determines the number o f calls and hence manpowe r - Trade structure determines the degree o f specialisation in the structur e - Service levels determine the number o f reps and merchandiser s
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Organisational Consequence s Old Structure
Sales Manage r
Key Account Mgr
Field Force Mgr
Vending account Mg r
Area north/west
Are a north/east
Area sout h
Drive tea m north
Driv e tea m south
Borde r manage r
9 reps
8 reps
9 reps
5 reps
5 reps
2 rep s
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Organisational Consequence s New Structure
Trade Marketing Mgr
Trade Channel Mgr Grocery
Trade Channel Mg r Convenience
Trade Channel Mgr Iloreca
Area 2
Area 2
Area
Area I
Area 3
[3TRI
3 TR
5TR
5TR
5TR
5TR
2 TR
5 TR
6 TR
2 TR
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TRADE COVERAGE EXAMPL E

THE NETHERLANDS
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The Dutch Marke t

Key Facts Populatio n Smoking Incidenc e "White stick" marke t Cigarette market Border market Cigarette market by value 15 millio n 36 % 33 billion 17 billio n 1 .6 billio n Dfl . 3 .5 billion
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Market shares Top 10 brand familie s

Domestic marke t
Domestic market % 1 Marlboro 1988 16 .1 12 .7 17 .2 10 .1 3 .7 7 .7 6 .7 5 .8 3 .6 0 .3 1992 21 .7 15 .4 13 .7 9 .3 6 .9 5 .9 5 .0 4 .7 2 .5 1 .4 1993 23 .5 16 .0
12 .9
LE 1994 24 . 9 17 . 1
11 . 7
2 Camel 3 Caballero 4 P.Stuyvesant 5 Barclay 6 Pall Mall Exp . 7 Gladstone 8 Belinda 9 Mantano 10 Gauloises
8 .9 7 .7 5 .4 4 .6 4 .5 2 .4 1 .6
8.6 8. 2 5. 0 4. 2 4. 3
2. 2
1 .7
Total Top 10 Source : SSI
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86 .5
87 .5
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Dutch Cigarette Market

Major Development s Total market Decline in volum e Increase in valu e Segment dynamic s Increase Ultra Low Tar segment Increase USIB segment Increase Sur Popular (premium price) segmen t Decrease Popular/Sous Popular segment Other Concentration of Trade (Wholesale & Retail ) Restrictions on advertising
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Trade Marketin g
Trade Structure
manufacturer s 65 wholesalers
Convenience 429 6 (38,8%) Foo d 585 6 (30,5%) Horec a 2762 0 (30 .7% )
Tobacconist s 200 9 (30,3% ) yr : 1993
Borde r 30 0 (8,5%)
Foo d multiple s 225 3 (15,5%)
Foo d independen t 360 3 (15%)
Petro l station s 302 3 (6,7%)
Institution s 82 7 (2,2%)
Horec a outlet s 35,17 9 (14,8%)
Leisur e 65 5 (1,0%)
Othe r 1 98 7 (6,0% )
Consumers
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Old Classification Criteri a
* Define only size of a type of outle t * Differ per main categor y * Based on Nielse n
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OldClassificationCriteri a FOOD OUTLET S Based on vending racks / check out s Small : < 2 full time check outs and/or vending rack s Large: - a counte r - 2 or more full time check outs and/or vending racks
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Trade Marketing and Distributio n

Old Classification Criteria TOBACCONISTS Based on turnover Small : < 924,000 sticks per yea r
Medium : 924,000 - 1,584,00 0
Large
: > 1,584,000

Old Classification Criteri a HORECA, LEISURE, INSTITUTION, OTHE R Based on # brands sol d Small : 0 - 7 brands
Medium : 8 - 14 brand s Large : > 15 brands

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Old Classification Criteri a PETROL STATIO N Based on # brands sol d Small : 0 - 19 brand s
Medium : 20 - 39 brands Large : > 39 brands

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Newclassificationcriteri a - Type of outle t - Total tobacco sale s - Opportunity to impact busines s and authority of store manager to take decision s - Shopper profil e
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New Classification Criteri a Tobacco Volum e Total volume of all manufacturer s in sticks per year sol d 1. 2. 3. 4. 5. 6. 7. Over 25 million sticks/yea r 7 .5 to 25 million sticks/yea r 2.0 to 7 .5 million sticks/year 0 .5 to 2 .0 million sticks/yea r 0.2 to 0 .5 million sticks/yea r 0.1 to 0 .2 million sticks/yea r Up to 0 .1 million sticks/year
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Trade Mai keting and Distributio n

Opportunities to build and impact our busines s Does the manager of the outlet decide on : A: Distribution + Merchandisin g B: Distribution onl y C: Merchandising onl y D: No Distribution, no Merchandising (orderin g
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New Classification Criteri a
Example of a classified outlet e .g . A3 A - Distribution + Merchandisin g 3 - Volume class : 2 - 7 .5 million sticks
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Old Trade Marketing Structur e

National sales manager
l rade Marketing
Field Force manager
National accoun t manage r 3 regiona l account manager s
Field Forc e district 1 area manager
Field Force district 2 area manager
Field Force district 3 area manage r
Drive Team 1 area manage r
Drive Team 2 area manage r
8 reps
8 reps
9 reps
5 reps
5 reps
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Weaknesses old structure/B.A . T - No commercial vertical approac h - Distribution Horeca channe l - Each outlet visited with same frequenc y - Limited target selection criteri a - Quality of sales calls can be improve d
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New Trade Marketing Structur e
Trade Marketin g
Mgr .
Trade channe l mgr . Convenienc e
Trade channe l mgr . Foo d
Trade channe l mgr . Horec a
3 are a mgrs . Convenienc e
2 are a mgrs . Foo d
2 are a mgrs . Horec a
15
reps
10
reps
10 reps
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Frequency in relation to importanc e (in terms of Volume, Decision Authorit y and Shopper Profile value )
All categories visited each cycl e (= Better Trade Coverage )
Improved outlet databas e (every outlet is at least visited once every 2 years )
More specialist rep s --> value added service s (Advice/Information, DPP/Categor y & Shelf Management )
Fine tuning target settin g (by using all available data)

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Trade Marketin g
Call frequency in the new situation
'000 stick s per year 1 2 3 4 5 6 7 > 25,000 7,500-25,000 2,000-7,500 500-2,000 200-500 100-200 < 100
Tobacco nists 7 7 6 6 6 1 1
Food 12 12 12 6 3 0 0
Horeca 6 6 6 6 6 0 .5 0 .5
Leisure 6 6 6 6 6 0 .5 0 .5
Institutions 6 6 6 6 6 0.5 0 .5
Petrol 6 6 6 6 6 0 .5 0 .5
Othe r 7 7 6 6 6 1 1
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Trade Coverage Old situation : 15 calls per day : 35 reps New situatio n Convenience : 1 1 calls per day : 15 reps Food : 1 2 calls per day : 1 0 rep s Horeca : 15 calls per day : 1 0 rep s
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Capacity Convenience channel per yea r
Volum e Class 1 2 3 4 5 6 7 # Tobacco nists 1 101 1626 262 18 1 0 Petrol 0 12 513 1561 423 145 318 Other 0 2 464 759 376 188 198 Total 1 12/103 2603 2582 817 145/189 318/198 Fre quency 6/7 6/7 6 6 6 0 .5/1 0 .5/1 If Call s 7 79 3 1561 8 1549 2 4902 262 357
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15 rep s net capacity : 35,063 -> 37,431

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Capacity Food channel per yea r Volum e Class 1 2 3 4 5 6 7 Food 1 11 684 2287 521 71 28 Fre quency 12 12 12 6 3 0 0 # Call s 12 13 2 8208 13722 156 3 0 0 23637
10 reps net capacity : 23,375 -> 23,637
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Capacity Horeca channel per yea r Leisure 0 0 3 20 28 152 115 lnsti tutions 0 1 4 29 66 168 207 Total 1 13 143 1017 2379 4511 4909 Fre quency 6 6 6 6 6 0,5 0,5 Horeca 1 12 136 968 2285 4191 4586 #Call s 6 78 85 8 6102 1427 4 2256 2454 26028 10 rep s
net capacity : 31,875 -> 26,028
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Main Benefit s Trade Coverag e In general terms less outlets wil l be visited, but more frequentl y in relation to their importance i n terms of volume, decision authority, value and shopper profil e
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SUMMAR Y * Mission : to become the "Benchmark Supplier " * Trade Marketing Overall Objective :
- strategic brands' objective s - active support of wholesale and retai l

* Trade Coverage Objectives :
- Trade Marketing objective (75-80% of volume ) - physical distribution (in terms of availability and space)
* Trade Coverage Strategy :
- classification of outlets - call frequency - organisational consequences

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Trade Marketing & Distributio n Process Char t Company objective 1 Consumer marketin g Objectives & Strateg y Brand Objectives Trade Marketin g Objectives & Strateg y Channel Objectives
Trade Marketin g plans & investments per channel and bran d
Performance criteri a Account plans Cycle plans

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Marketing Environment
Internal Analysi s * Marketing strategy - segmentatio n - market/produc t - positionin g * Marketing mi x * Research & Development * Personne l * Finance
External Analysi s * Macro - demographics - economic s - technology * Micro - consumers - competitors - supplier s - volum e
SWOT Analysis
Consumer Marketin g Objectives & Strategy
Trade Marketing Objectives & Strategy
Brand Objectives
Channel Objective s
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Solution
For every channel : # outlets (category) * coverag e
,Example : * # of outlets in Food , category 5 (200 - 500) sticks : 443 * # of calls per day Food : 12 * 5316

New Trade Marketing Structur e
Trade Marketin g mgr.
Trade channe l mgr . Horec a
2 are a mgrs . Horec a
15
reps
10 reps
rep s
10
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New Trade Marketing Structur e Petrol -> Horeca channe l
Trade Marketin g
Mgr .
10 reps
raps
10
Marketing Training
2/'9 5
Key factors oithe Marketing Mix _ Packagin g The pack's function is basically to protect th e content ! Existing trends to perhaps even mor e sophisticated packs in art, material, design , colours and structure . The modern cigarctte pack is not just a container: It has to have a personality ! Creation of a brand is creation of pack desig n An integral part of the marketing mix and th e most consistant Designs last lone er than other fort, Is of bran d communication / endorsement .
Marketing Training
2/9 5
Evaluation of Pack Design s
Image Brand name
Does the package ccsign reflect the overall strategi c aims of the brand ? Is this prominent and easily legible, are the brand nam e and the design in sympathy?
Impact Does it stand out against the mass of competitiv e brands? Will the design be translated to differen t dimensions? Difference Is the design unusual and different from competitiv e packs ?
Communication Do the colours and shapes used in the design contribut e to the basic message of the design ? Can the design convey brand values without the brand name? Do the binding informations like T&N figures, HW , Barcode and Price harm the design ? Interest Does the design attract the eye, ideally by visual elements relevant to the brand image ? Is the pack design "a salesman" in the shelf?
Timelessness Will the design soon look dated ? Extendability Can the design be extended to new sizes ? Does the design guarantee a basic visual identity fo r line extensions ? Can the brand logo remain consistent in new sizes an d other variants?
Marketing Training
2/5 5
Strengthen your most effective advertisin g with the smallest budget : the pack!
Marketing Training
2/55
TIMIN G To see in good times opportunities and to take advantage of changing external environment, conditions and new market developments. Those are obvious and well analysed by you an d by your competitor as well !
What does this mean for you? To accelerate the whole development process o f this activity or launch in order to act instead of react, to be the first in the market
place
Marketing Training
2/95
Communication Sponsorships
Sponsorships have a paralle l communication role and can often add vitality to the consumer' s perception of a brand :
Marketing Training
2/9 5
Sponsorshi p
Objectives
1. Create brand awareness 1 log o awareness (in new markets ) increase. brand awareness I log o awareness (in existing markets ) 2. Support and enhance brand imagery , particularly regarding + internationality + greatness, importance of the brand + active, dynamic aspect s 6. Generate media exposure with hig h priority for TV 7. Use sponsorship as local communication platform in restricte d markets . 8. Create local sponsorship events unde r the international umbrella
Marketing Training
2/55
Communication Trademark Diversification (TMOD )
The development and marketing of any non tobacco product/service bearing the cigarette brand logo .
Marketing Training
2/5 5
TMD Objectives
Provide continuing brand/logo-communicatio n (from a commercially viable base, in a TMi D business category with significant magnitude) .
Marketing Training
2/95
Communication TMD
The trademark is a real asse t Properly selected and managed TMD shoul d communicate the brand's creative posa!oning .
Marketing Training
2/3 5
Advantages of TM D + properly done, enhances bran d imagery + maintains brand awareness + provides user image realit y . .communication continuity ' tnd medi a access + financial return (royalties) + trademark control + retail visibility and activity
Marketing Training
2/55
Disadvantages of TMD, High brand image/brand awareness / logo awareness are prerequisite s to TM D maintenance of trademark in no n tobacco classes is costl y any activity will by less profitabl e without s',.nificant investments by th e trademark owner (tobacco company ) most TMDs are destined to fail agains t business profitability as the ke y requirement TMD Manager's skills differ from thos e of cigarette Marketing Managers
Marketing Training
2/95
BRAND PLAN
Executive Summary Brand History
BRAND VISIO N BRAND ROLE BRAND POSITIONIN G TARGET CONSUMER BRAND OBJECTIVE S BRAND MARKETING STRATEG Y + COMMUNICATIO N ++ COPY STRATEG Y KEY BENEFI T REASON WHY BRAND CHARACTER/ROL E PROPOSED SELLING IDEA ++ ATL ++ BTL PRICE PRODUCT PACKAGING DISTRIBUTION
Market Research by Markets
LINE EXTENSION S PRIORITIES/ACTION PROGRA M KEY FINANCIAL INDICATORS
Key Issues by markets Volume Targets by market
BRAND VISION To be BATCo's strategic midprice UK International Brand offering international quality, style an d imagery where established international brands are eithe r generally not available or excessively expensive . BRAND ROLE John Player Gold Leaf wil l continue to be the dominant volum e share and profit. generator in its ke y markets in .Africa, Middle East and the Indian Sub-continent. A family o f variance will be developed co maintain OpCo market shares against the imminent availability of competitor In ternational Brands . In new markers O L will be introduced as a fully credible UKIB that offers, on top of a full international package of adde d values, a small but significant pric e saving. BRAND POSITIONIN G JPGL is the best-tasting cigarette across the seven seas, because of its 100 year tradition of quality and its choice blends . TARGET CONSUMER Primary - Males 25-35 years old. Secondary - Males 35 + White collar, Middle Class. Educated, although riot ( ccessarily co tertiary levels. Aware of and partial to international products. Smokers who desire a flavourful, strong, but smooth cigarette. ,
COPY STRATEG Y Key Benefit JPGL is the best tasting cigarett e across the seven seas . REASON WH Y JPGL has a 100 year-old traditio n of cigarette manufacture from choic c blends of Virginia tobaccos selected b y the experts of the House of loh n Player. BRAND CHARACTER/WORLD The world of JPGL is the world of Maritime Adventure . KEY ATTRIBUTES International - status, success , achievement . . Masculine - active, adventurous, individual. Popular - admired, respected . leader. PROPOSED SELLING IDE A Taste and satisfaction across the seven seas.
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BAT Marketing Training 1 40- [Marketing Tools ]

ing Training 1 keting Tools]

Trade Marketing & Distributio n

TRADE MARKETING & DISTRIBUTION * Missio n * (Overall) Objective & Strateg y

AN EXAMPLE OF REGIONAL COVERAG E * The Netherland s

TRADE COVERAGE CASE STUDY

Trade Marketing & Distributio n

DIRECTION AND FOCU S

MISSION & OBJECTIVES

Trade Marketing & Distributio n

Trade Marketing & Distributio n

I.v .WOl -95/6 .n 4

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Total volume of all manufacturers in sticks per year sol d

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Profile Guidelines continue d

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Trade Marketing & Distributio n

Key Account Mgr

Field Force Mgr

Drive tea m north

Driv e tea m south

Trade Marketing & Distributio n

Trade Channel Mgr Grocery

Trade Channel Mg r Convenience

Trade Channel Mgr Iloreca

Trade Marketing & Distributio n

TRADE COVERAGE EXAMPL E

The Dutch Marke t

Market shares Top 10 brand familie s

Total Top 10 Source : SSI

Dutch Cigarette Market

Tobacconist s 200 9 (30,3% ) yr : 1993

Foo d multiple s 225 3 (15,5%)

Foo d independen t 360 3 (15%)

Petro l station s 302 3 (6,7%)

Horec a outlet s 35,17 9 (14,8%)

Trade Marketing & Distributio n

Old Classification Criteri a

Trade Marketing & Distributio n

Trade Marketing and Distributio n

Medium : 924,000 - 1,584,00 0