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Intro to obppc architecture shelf savvy tool books
- 1. Introduction to OBPPC ArchitectureOccasion / Brand / Package / Price / Channel SHELF-SAVVY TOOLS
- 2. 3OBPPC – Occasion Brand Package Price Channel ArchitectureBook Cover, Spine and Back OBPPCArchitecture FOR INTERNAL USE ONLY. Copyright© 2010 The Coca-Cola Company. DNA: The Coca-Cola Way of Marketing, Brand Value | Brand Love and the Dynamic Ribbon are all trademarks of the Coca-Cola Company. Introduction to OBPPC ArchitectureOccasion / Brand / Package / Price / Channel Global Customer & Shopper Marketing Converting Shoppers to Buyers SHELF-SAVVY TOOLS
- 3. Driving profitability by creating and capturing value for the Coca-Cola System. An Introduction to OBPPC Architecture Occasion Brand Package Price Channel
- 4. 7OBPPC – Occasion Brand Package Price Channel Architecture Metrics The Shelf-Savvy Tools Series is intended to provide you with information about the different ways we create value at retail for all the stake-holders in our System. Each book explores a different topic in depth, and provides you with resources and tools to help you put the content into action. Use these books as a reference, as a repository for global best practices, and as a refresher. Differentiating Brand / Pack Strategy Commercializing with Customers Activating for Retail Impact Prioritizing Shopper Opportunities Picture of Success Shelf-Savvy Tools Series
- 5. 9OBPPC – Occasion Brand Package Price Channel Architecture All shoppers are different. They have different values and different preferences, which lead to different price elasticities. We can create value by recognizing the differences in purchase occasions, and by offering a unique assortment of brands, packages and price points for each channel they are served by. We design OBPPC architectures to create value by considering three core principles: Define distinct package roles Each package plays a distinct role in driving Incidence, Transactions, or the Amount of a transaction. By defining roles for each package, we can build a proposition to grow our holistic business. Capture unique shopper needs Shoppers have different motivations at each occasion and channel. We can capture the value of each occasion by defining the package roles to best serve each unique shopper need. Differentiate across channels Each of our customers serve different shoppers with a unique retail experience. We can help them to be more effective by differentiating our OBPPC offering across channels and customers. An Introduction to OBPPC Architecture: Overview
- 6. What is OBPPC? 1 11OBPPC – Occasion Brand Package Price Channel Architecture
- 7. What 13 OBPPC is a critical element of shelf-savvy marketing. For each Occasion, it defines the optimal Brands, in the appropriate Packages, at the right Prices, in the target Channels. OBPPC – Occasion Brand Package Price Channel Architecture
- 8. Why is OBPPC critical to System success? 2 15OBPPC – Occasion Brand Package Price Channel Architecture
- 9. OBPPC enables us to move the demand curve and sell more products at higher prices through segmentation and differentiation. Why price/L volume Before After 17OBPPC – Occasion Brand Package Price Channel Architecture OBPPC Impact on Demand Curves
- 10. 19OBPPC – Occasion Brand Package Price Channel ArchitectureWhy OBPPC captures value by considering consumer, shopper and customer motivations. It provides different packages, at different prices, for different segments to the extent that it can be executed by our System.
- 11. Limited assortment and price point variance Unique needs only met for some shoppers Some consumers paid less $/L than they were willing to Why Good OBPPC drives both volume and value by aligning offerings with shopper needs. 21OBPPC – Occasion Brand Package Price Channel Architecture Before OBPPC ShelfVolumePrice/L Differentiated assortment, with segmented price points Needs of all key shoppers are met, incidence up The price requirement of all shoppers is met After OBPPC Shoppers drive volume by making purchases. We optimize value through segmentation, driving price/L.
- 12. Good OBPPC offers both short and long term benefits. 23OBPPC – Occasion Brand Package Price Channel Architecture Short term Eliminates short term price fluctuations by increasing pack/ price diversity Reduces risk of commoditization Reduces reliance on few packs Long term Builds a long term franchise by capturing unique needs for multiple shoppers Addresses customer pricing differentiation needs Reduces channel leakage by providing specific Pack/Price architecture by channel Why
- 13. Good OBPPC consistently delivers strong results. 25OBPPC – Occasion Brand Package Price Channel Architecture Profitability Volume share Revenue share Revenue / uc growth Number of transactions Source: Selected data from over 25 internal case studies 2003-2008, AC Nielsen Why
- 14. Good OBPPC is strategically planned for the short and long term. 27OBPPC – Occasion Brand Package Price Channel Architecture Short term Meets today’s execution capability Reflects today’s retail reality and shopper landscape Focuses on quick wins with existing packages plus price point changes Why Long term Plans for enhanced execution capability Anticipates tomorrow’s retail reality and landscape Plans innovation for tomorrow’s packages including consid- erations of capital, Route to Market, and staged price increases
- 15. How do we develop a good OBPPC strategy? 3 29OBPPC – Occasion Brand Package Price Channel Architecture
- 16. 31OBPPC – Occasion Brand Package Price Channel Architecturehow OBPPC planning is an integral element in DNA: The Coca-Cola Way of Marketing. The goal of marketing at TCCC is to combine art and science to build Brand Love and BrandValue. From a marketing perspective, OBPPC starts with the occasion. From a commercial perspective, it starts with the channel or customer. We use elements from Brand and Portfolio Plans to tailor the OBPPC to accomplish both our marketing and commercial objectives. Opportunity Identification Prioritize channels, categories, and occasions via Profit Mapping OBPPC Architecture Defined category and channel architecture according to occasions In-Outlet Picture of Success Customized with marketing elements and Customer sell in story
- 17. 33OBPPC – Occasion Brand Package Price Channel Architecture 33OBPPC – Occasion Brand Package Price Channel Architecture Away from Home Meals Channel On The Go At Home Leisure Grocery Convenience HORECA $XX billion opportunity Occasion OBPPC commercializes the priority opportunities in store. how OBPPC work starts with the highest leverage opportunity.
- 18. 35OBPPC – Occasion Brand Package Price Channel Architecturehow Good OBPPC incorporates three key principles. Differentiate across channels (& customers) Capture unique shopper needs (within a channel or customer) OBPPC Architecture Segmented by pack role, consumption occasions, and socioeconomic level Segmented by pack role, consumption occasions, and socioeconomic level Define distinct package roles 1 2 3
- 19. 37OBPPC – Occasion Brand Package Price Channel Architecturehow Differentiate across channels Capture unique shopper needs Define distinct package roles 1 2 3 First principle: OBPPC defines distinct package roles. OBPPC Architecture (by category and channel) (within a channel or customer) (& customers)
- 20. 39OBPPC – Occasion Brand Package Price Channel Architecture 39OBPPC – Occasion Brand Package Price Channel Architecturehow Entry Frequency Upsize Upscale Entry price point Frequent usage size Value Convenience Incidence Recruit new category consumers or competitive users Transactions Drive frequency among existing consumers Amount Increase purchase amount Amount Optimize value on less elastic purchases 1.0L (PET) $0.99 $0.99/L Value Index 106 1.5L(RefPet) $1.40 $0.93/L Value Index 100 2.5L (RefPet) $1.99 $0.80/L Value Index 86 2x 0.75L (PET) $2.25 $1.50 Value Index 161 ObjectiveRoleExample Core Differentiator Define package roles consistent with PITA objectives.
- 21. Entry Frequency Upsize Upscale how 41OBPPC – Occasion Brand Package Price Channel Architecture Strategic Package Roles Customer Objectives* Incidence Number Of Trips Size Of Purchase Retail Price/L * Customer objectives translate into PITA formula Package roles can then be linked to customer objectives.
- 22. 43OBPPC – Occasion Brand Package Price Channel Architecture 43OBPPC – Occasion Brand Package Price Channel Architecturehow Second principle: OBPPC should capture unique shopper and consumer needs within a channel or customer. OBPPC Architecture (by category and channel) Define distinct package roles 1 2 3 Differentiate across channels Capture unique shopper needs (within a channel or customer) (& customers)
- 23. 45OBPPC – Occasion Brand Package Price Channel Architecturehow 45OBPPC – Occasion Brand Package Price Channel Architecture “We want Coke, but at the best price to meet my family’s needs.” She buys primarily for: Home Meals She buys primarily for: Home Meals She shops primarily at: Mass A pack she might buy: 4x2L (PET) $9.50 $1.20/L A pack she might buy: 1.25L (PET) $1.75 $1.40/L OBPPC meets shopper need and optimizes profitability She shops primarily at: Drug Stores “We want Coke, but I’m time pressed – I’ll pick it up when I can.” Consider two mothers shopping for the same occasion: Susana Mary DRUGCO pharmacy Higher Price Elasticity Lower Price Elasticity
- 24. 47OBPPC – Occasion Brand Package Price Channel Architecture “I want a Coke, but I have a daily budget that I need to stick to.” He buys primarily for: On the Go She shops primarily at: Traditional He shops primarily at: Traditional A pack she might buy: 1.25L (RGB) $1.70 $1.36/L A pack he might buy: 0.5L (PET) $0.99 $1.98/L “I want a Coke, and I want it now for the commute home.” Corner Mart Corner Mart how And two workers shopping the same channel: 47OBPPC – Occasion Brand Package Price Channel Architecture Lina Robert Higher Price Elasticity She buys primarily for: Home Meals Lower Price Elasticity OBPPC meets shopper need and optimizes profitability
- 25. how 49OBPPC – Occasion Brand Package Price Channel Architecture OBPPC meets shopper needs and optimizes profitability by occasion. On the go SUPERMARKETS IN COUNTRY A At home meals 0.33L (can) $0.43 $1.30/L 0.5L (PET) $0.86 $1.72/L 1.5L (PET) $1.55 $1.03/L 2x1.5L (PET) $2.94 $0.98/L 4x0.5L (PET) $2.98 $1.49/L Meets Susana’s needs: Value Meets Mary’s needs: Convenience Could meet Robert’s needs: Convenience Example: Sparkling Soft Drink Category Entry Frequency Upsize Upscale
- 26. how 51OBPPC – Occasion Brand Package Price Channel Architecture Entry Frequency Upsize SUPERMARKETS IN COUNTRY B At home meals OBPPC reflects the elasticities of different income groups. In this example, the same packs are sold at different prices in different neighborhoods. High Income Neighborhood Mid Income Neighborhood Low Income Neighborhood 1.25L (RGB) $1.19 $0.95/L 1.25L (RGB) $1.09 $0.87/L 1.5L (PET) $2.09 $1.39/L 1.5L (PET) $1.99 $1.32/L 1.5L (PET) $1.99 $1.32/L 2.00L (PET) $2.69 $1.35/L 2.00L (PET) $2.59 $1.30/L 2.00L (PET) $2.39 $1.20/L Meets Lina’s needs: Daily Budget Example: Sparkling Soft Drink Category
- 27. 53OBPPC – Occasion Brand Package Price Channel Architecturehow Third principle: OBPPC differentiates acrosschannels and customers. OBPPC Architecture (by category and channel) Define distinct package roles 1 2 3 Define distinct package roles Differentiate across channels Capture unique shopper needs (within a channel or customer) ( customers)
- 28. how 55OBPPC – Occasion Brand Package Price Channel Architecture Different channels will have different package offerings for the same occasion. Primary consumption Occasions At Home Meals On the Go At Home Meals At Home Leisure Shopper behavior in this channel Daily trips Higher rate of impulse buys Lower price points Weekly stock-up trips Lower rate of impulse buys Higher elasticity Channel Differentiator Convenience Proximity Price Assortment Breadth and Depth OBPPC Strategy Frequency size packs RGB for lower price point Upsize packs in addition to entry size packs Large PET to drive down price/L TraditionalTrade Grocery
- 29. how 57OBPPC – Occasion Brand Package Price Channel Architecture Primary Consumption Occasions At Home Meals At Work Meals At Home Meals At Home Leisure Shopper Behavior in this Customer Smaller household Daily trips Lower price sensitivity Larger household 2 trips/week Higher price sensitivity Customer Differentiator Breadth of assortment Convenience Large footprint Compact assortment Proximity to neighborhood Small footprint OBPPC Strategy Over-index in single serve Focus on frequency and convenience pack role Over-index in multi serve and multipacks Focus on frequency and upsize pack role “Customer A” “Customer B” Different customers will have different package offerings for the same occasion.
- 30. 59OBPPC – Occasion Brand Package Price Channel Architecturehow HOW do these three OBPPC principles come together? 59OBPPC – Occasion Brand Package Price Channel Architecture
- 31. 61OBPPC – Occasion Brand Package Price Channel Architecturehow A holistic OBPPC model incorporates multiple channels, occasions and shopper segments. A OCCASION 1 Immediate Consumption Future Consumption OCCASION 3 OCCASION 2 OCCASION 2 A A A B B B B _0.33l can @ $ 0.49 _chilled _3 SKU traffic driver CHANNEL: Supermarkets Occasions can be further segmented by: _Shopping missions _Customer clusters _Socio economic level _Region/Location Business Objective Entry Frequency Upsize Upscale For each segment, we will define: _Pack size, type _Price point _Number of items _Placement _Equipment _Customer objectives BRAND:
- 32. 63OBPPC – Occasion Brand Package Price Channel Architecturehow Individual OBPPCs are integrated into one portfolio OBPPC for each channel. Individual Category Obppc Example: Traditional Channel Integrated Portfolio Obppc Example: Traditional Channel e.g. MyCoke e.g. Flavors e.g.Water ENTRY FREQUENCY UPSIZE UPSCALE On the go snacks Water Flavor Cola Water Flavor Cola
- 33. 65OBPPC – Occasion Brand Package Price Channel Architecturehow The complexity of an OBPPC is dependent on the capability to segment and execute. Convenience On the go Convenience Snacks Traditional On the go, Snacks Hypers On the go, Snacks Hypers On the go, Snacks Supers On the go, Snacks Convenience On the go, Snacks Traditional On the go, Snacks Supers On the go, Snacks Convenience On the go, Snacks Traditional On the go, Snacks Hypers On the go, Snacks Supers On the go, Snacks Convenience On the go, Snacks Water / Flavor / Cola Brand level COMPLEXITY: ILLUSTRATIVE EXAMPLE Channel level Region level Total market Region One Region two
- 34. OBPPC Architecture Driving profitability by creating and capturing value for the TCCC System.
- 35. Global Customer Shopper Marketing Converting Shoppers to Buyers FOR INTERNAL USE ONLY. Copyright© 2010 The Coca-Cola Company. DNA: The Coca-Cola Way of Marketing, Brand Value | Brand Love and the Dynamic Ribbon are all trademarks of the Coca-Cola Company.