MARKETING                     FORUM 2010                     ExEcutivE                         Summary                    ...
WHAT IS THE CONSUMER GOODS FORUM?The Consumer Goods Forum (CGF) is a global, parity-based industry network, driven by its ...
The Marketing Committee                                                                  ►   MARKUS GISIGER, Head of Marke...
Tuesday 2 November                ndStore Tour Programme                                               kindly sponsored by...
Participants were warmly welcomed by                                       Marketing Forum 2010 - ExEcutivE Summary   5
Welcome Cocktail                                               kindly sponsored by6   Marketing Forum 2010 - ExEcutivE Sum...
Marketing Forum 2010 - ExEcutivE Summary   7
Wednesday 3 November                                    rdWelcome by Marketing CommitteeCo-ChairmanStephen Smith, Executiv...
Setting the Scene for the Forum                                       conference moderator Frances Edmonds, author & Prese...
The New Normal                                          Peter Hinssen, managing Partner, across technology, Belgium       ...
25 Years Innovating Customer Relationships                                        Luis Moutinho, chief Executive Officer, ...
Adapt or Die                                          Miles Hanson, chief Executive Officer and Founder, the collaboration...
The Magic of the Dabbawala Unfolded                                         Manish Tripathi, chairman, Dabbawala Foundatio...
Networking DinnerHacienda Quinta do Torneiro                                                 kindly sponsored by14   Marke...
Marketing Forum 2010 - ExEcutivE Summary   15
Thursday 4 November                             thPortuguese Success –at Home and Beyond Borders                          ...
Winning Tomorrow’s ConsumerMulti-channel Retailing and the Pursuit of the EverChanging ConsumerIan Crook, marketing Direct...
Working Together to Serve the ConsumerThe Make-up Factor – Learnings from a Market that Growsduring Economic CrisisGuy Far...
New Ways of Working TogetherJim Flannery, managing Director, customer Development, Procter & Gamble, uSaIgnacio Gonzalez H...
Thank you to our sponsors for their valued contribution to the Marketing Forum 2010:        Do not miss the              M...
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Marketing Forum 2010 Executive Summary

  1. 1. MARKETING FORUM 2010 ExEcutivE Summary 2 – 4 November 2010 • Lisbon, Portugal Winning Tomorrow’s Consumer. What Manufacturers and Retailers Need to
  2. 2. WHAT IS THE CONSUMER GOODS FORUM?The Consumer Goods Forum (CGF) is a global, parity-based industry network, driven by its members. It brings together the CEOs and seniormanagement of over 650 retailers, manufacturers, service providers and other stakeholders across 70 countries and reflects the diversity ofthe industry in geography, size, product category and format. Forum member companies have combined sales of EUR 2.1 trillion.The Forum was created in June 2009 by the merger of CIES - The Food Business Forum, the Global Commerce Initiative (GCI) and the Global CEOForum. The Consumer Goods Forum is governed by its Board of Directors, which includes 50 manufacturer and retailer CEOs and Chairmen.The Forum provides a unique global platform for knowledge exchange and initiatives around five strategic priorities – Emerging Trends,Sustainability, Safety & Health, Operational Excellence and Knowledge Sharing & People Development – which are central to the advancementof today’s consumer goods industry.The Forum’s vision is: “Better lives through better business”. To fulfil this, its members have given the Forum a mandate to develop commonpositions on key strategic and operational issues affecting the consumer goods business, with a strong focus on non-competitive processimprovement. The Forum’s success is driven by the active participation of the key players in the sector, who together develop and lead theimplementation of best practices along the value chain.With its headquarters in Paris and its regional offices in Washington, D.C., and Tokyo, the CGF serves its members throughout the world.For more information, please visit www.theconsumergoodsforum.comWHAT IS THE MARKETING FORUM?Each year, senior executives in Marketing and Sales gather to discuss the top-of-mind issues in retail marketing. It is the leading-edge event inmarketing that Marketing and Sales Directors cannot miss. The Marketing Forum offers delegates top-quality speakers, debates, networking and real case studies. The Forum aims to provide practicaltake-aways and a large diversity of information and insights unique to this event. The Marketing Forum is the only global forum of its kind forretail marketing and sales executives. 2 Marketing Forum 2010 - ExEcutivE Summary
  3. 3. The Marketing Committee ► MARKUS GISIGER, Head of Marketing Food, MIGROS, Switzerland ► ANTHONY HUCKER, Vice President of Strategy and Business Development, WAL-MART STORES, USA ► MATEJA JESENEK, Member of the Board for Marketing, Format Development and Buying/Chief Marketing Officer, MERCATOR GROUP, Slovenia ► SHARON JESKE, Director, Operational Excellence, THE CONSUMER GOODS FORUM ► ROBERT KITCHING, Vice President Consumer Marketing Insights Western Europe, UNILEVER, The Netherlands ► MEG LEVENE, Senior Director Global Shopper - Consumer Health Care, JOHNSON & JOHNSON, USA ► FIONA MA, Executive Director - Sales & Marketing, China, SWIRE BEVERAGES, People’s Republic of China ► KRISTEN NOSTRAND, Marketing Director, PROCTER & GAMBLE, USA ► SIMON POTTS, Director - Business Development Alliance Boots Health & Beauty Division, United Kingdom ► NICK POWELL, Managing Director, ENERGIZER, United Kingdom ► PATRICK ROUVILLOIS, Chief Marketing Officer, CARREFOUR GROUP, France ► JEAN RUBENS, Executive Managing Director, CASINO SUPERMARCHES, France ► VANESSA SILVA, Marketing Director, JERONIMO MARTINS, Portugal► ARNAUD DE BELLOY, Vice President Global Customer & Sales,NESTLE GROUP, Switzerland (Committee Co-Chairman) ► SATORU TANAKA, President, Premium Skin Care, Global Beauty Care Business, KAO, Japan► STEPHEN SMITH, Executive Vice President, Brand Strategy,Marketing and Merchandising, Food Lion, USA (Committee ► ANDRE TORDJMAN, Founder and Managing Director, LITTLECo-Chairman) EXTRA (AUCHAN GROUP), France► JONATHAN ACKERMAN, Customer Director, PICK n PAY ► JEAN-JACQUES VANDENHEEDE, Director Retailer Insights, THERETAILERS, South Africa NIELSEN COMPANY, Belgium► ADAM BALON, Founder & International Director, INNOCENT ► PATRICK WAUTERS, Vice President North and Eastern Europe,DRINKS, United Kingdom CHIQUITA EUROPE, Belgium► CAROLYN BRADLEY, UK Marketing Director, Tesco Stores Ltd, ► PAOLO ZAZZI, Europe and Export Customer MarketingUnited Kingdom Responsible, BARILLA, Italy► DIETER EBBERS, Director Market Research and Media WestEurope, HENKEL KGaA, Germany► ANGELA FRANCOLINI, Vice President, International Marketing &Innovation, MC CORMICK & CO, INC., USA Marketing Forum 2010 - ExEcutivE Summary 3
  4. 4. Tuesday 2 November ndStore Tour Programme kindly sponsored by4 Marketing Forum 2010 - ExEcutivE Summary
  5. 5. Participants were warmly welcomed by Marketing Forum 2010 - ExEcutivE Summary 5
  6. 6. Welcome Cocktail kindly sponsored by6 Marketing Forum 2010 - ExEcutivE Summary
  7. 7. Marketing Forum 2010 - ExEcutivE Summary 7
  8. 8. Wednesday 3 November rdWelcome by Marketing CommitteeCo-ChairmanStephen Smith, Executive vice President, Brand Strategy,marketing and merchandising , Food Lion, uSai n welcoming 170 participants from 30 countries to Lisbon, Stephen Smith said the marketing conference was “a unique gathering, in which to share ideas, connect and gaininspiration.” However, he stressed that the content was based onreal examples and case studies: “We try to stay away from thetheoretical.”What’s New about Your Association?Jean-Marc Saubade, managing Director, the consumer Goods Forum T he Consumer Forum is not “one more Goods association” but rather, the get things done”. Driven by its vision of “Better Lives Through Better Business,” the Forum has a mandate to make collaborative work accessible to all companies, for the good of the industry. “We work vehicle through which the on things that can only happen when we unite,” Saubade underlined. industry can finally speak in These include, among others, food safety, sustainable packaging one voice. Launched in June and carbon measurement, stripping cost from the supply chain and 2009, in New York, with the information sharing and are arranged under five strategic pillars: fusion of CIES with The Global 1. Emerging Trends Commerce Initiative and the Global CEO Forum, the body aims 2. Sustainability to drive unified collaborative action 3. Safety & Health on non-competitive issues. “The CEOs ofyour companies were sitting on too many boards and going to too 4. Operational Excellence (New Ways of Working Together)many meetings, in which they were talking about the same things,” 5. Knowledge Sharing & People DevelopmentSaubade explained. “At the same time, the industry is not talking in The Forum is not a lobby but nonetheless aligns itself strategically withone voice. We are not in the driving seat.” lobbying groups in the regions, such as GMA, FMI, ERRT, EuroCommerceThe Consumer Goods Forum members have combined sales of and so on. “We still need to influence legislation in various countries,”EUR 2.1 trillion: an organisation with enormous collective influence. Saubade asserted. The connection in the regions is made via localThe board of directors brings together the CEOs and chairmen of Efficient Consumer Response (ECR) groups. The Forum also aligns25 retailers and 25 manufacturers. The board positions cannot be with GS1: global projects need global standards. The idea is to avoiddelegated, so the decisions are made by the people who can “really duplication and pursue a single industry agenda. 8 Marketing Forum 2010 - ExEcutivE Summary
  9. 9. Setting the Scene for the Forum conference moderator Frances Edmonds, author & Presenter, united Kingdom “ A good name is more to be valued than great riches,” Frances Edmonds be able to rebuild that brand? There is, in all this, a vital need for true transparency. Consumers are demanding it; “If you’re not naturally honest, be honest through self-interest.” Meanwhile, there’s a new contends. A brand is that business model: ineffable amalgam of the tangible and the intangible, which creates influence and value. But that hard work can be ruined in the twinkling ofan eye and “it can all come crumbling down”. BP was one of the mostadmired companies in the world. Now it is one of the most reviled. Whatis the cost to its long-term reputation? Toyota had built a reputationfor safety. That reputation is now severely damaged. Will the companyHow Have Consumers Changed and What Does itMean to Me? Rising from the Storm Jean-Jacques Vandenheede, Director retailer insights Europe, the Nielsen company, Belgium C onsumer confidence drives demand. While it has been generally reported The growth in the hard discount formats has gone hand in hand with increased density. Similarly, the growth in private label is a “structural phenomenon” that has followed the density of organised retail and has to be low, it has in fact not been driven by consumers. But the major consumers of private “followed [economic] recovery, label are not who we might think. By Nielsen’s measurements, the slowly creeping up again” and “super heavy” private brands buyers are more affluent, have a larger consumption volumes are returning. household, shop more often and spend more per trip. The inverse isThis said, there is still doubt in the consumer mindset. “The consumer true of “super low” buyers. “Leading brands,” however, “do not loseis hesitating.” In terms of turnover, large and small supermarkets share to private label. “Retail brands essentially gain at the expensehave been “flat lining”, also, although hypermarkets have suffered in of secondary and small brands,” Vandenheede said.recent times, losing 7% on average over the last few years. “There The other myth that Vandenheede was keen to explode is that theis a need to reinvigorate the hypermarket,” Vandenheede said. Both majority of consumers want to shop online. Not for groceries: only 19%market share for all three format types and the number of shopping bought groceries online over the last three months, his data show.trips were also flat between 2007 and 2010.“The consumer is an animal of Darwin,” Vandenheede asserted, in thatit slowly adapts, rather than opting for rapid or radical change. “Auto-pilot shopping” is the reality of our business. Faced with uncertain taKEaWaySeconomic times, most shoppers, according to Nielsen survey data,shopped at the same stores they always did. This may be in part,Vandenheede posited, because all the grocers had essentially the same 1. Battle for value not for price.offer. Only a minority (not more than 16%) swap stores to benefit from 2. all markets fluctuate, but the long-term trends arespecific promotions. But over-promotion leads to the commoditizing stable.of the low-price offer. The result of this is that the shopper may feelpunished when an item is no longer on promotion, rather than feeling 3. Weathering market turbulence is a better bet thanrewarded by the promotion itself. trying to avoid it. 4. consumers change very slowly. Marketing Forum 2010 - ExEcutivE Summary 9
  10. 10. The New Normal Peter Hinssen, managing Partner, across technology, Belgium “ As a technologist, I’m basically a nerd,” Peter Hinssen told the conference. When it comes to information, “people will ingest zero length and infinite depth”. But despite these advances, Hinssen has a number of bones to pick with business and industry, which is not advancing in step. “The “I’ve been a nerd since birth world has gone network. So why are businesses built in silos?” Why and I come from a long line of does Google have a banking license in 27 countries? Because “people nerds.” But nerds are inheriting don’t need banks, they need banking”. Lastly, why aren’t businesses the Earth as technology, once a listening to their nerds? Steve Sasson, a Kodak employee, invented the novelty special interest activity for the digital camera in 1975. Kodak was not pleased with this category killernerd alone, has now become the norm. Technology used to be work- and kept Sasson in the basement while it sold silver-based film. “Yourelated but is shifting to leisure: “Work is the brief period in my day have a lot of Steve Sassons. Your job is to release them.”where have to use old technology,” Hinssen quipped, noting that theoriginal driver of internet traffic was professional file sharing (work).This shifted to the web (information) at the close of the 90s. Now it isvideo (entertainment). Hinssen cited a survey in which respondents NEW ruLESwere asked to list their top necessities in life: 4% listed their iPod whilefood did not make the list. However, we are only half-way along theevolutionary line. “If the last 20 years were about becoming digital, 1. there is zero tolerance for digital failure: Gmail goingthe next 20 years will be about being clever with digital.” Luckily, the down now makes cNN news.first so-called digital natives are now entering the workforce. 2. technology doesn’t have to be perfect, that is to saySome things to consider, then: content is no longer king. Contact is of optimal performance, just “good enough”. mP3s andking. Leverage the power of crowds and take a bottom-up approach. Notebooks are examples of the success of “good enough” technology.Consumers designing your logo, for example, is not losing control butcrucial contact. That said, the mass market is dead. Custom and niche 3. Now you know: total accountability one key aspect of the new normal. Leverage the long tail: make a 4. abandon absolute control.little on many sales, rather than a lot on few. Don’t weigh people downwith too much information, but make your communications really count. The Consumer is Changing. So what? Belinda Youngs, chief marketing Officer, Sobeys inc., canada T echnology is changing. The internet is no longer about web pages: it’s a get the most out of this, build a community, create an open, transparent dialogue and promote collaboration and sharing. What does this mean for Sobeys? The supermarket is a chore, where platform for collaboration. the traditional market is an experience. To recapture that, stores need The first generation to have to inject “the magic of theatre” and deliver experiential stores. The grown up in a digital world has a retailer is attempting to “trend away from traditional marketing” and different value set and is now joining towards “instructional selling”, with more story-telling and education, the workforce and the consumer market. Society such as recipe tips, or information about how the food is changing. Brands are no longer believable to consumers. But “Judy in It also means moving to customer-led planning, by gathering shopperDetroit” (as a proxy for peer and network review and recommendation) believable. “Social media got Barack Obama elected,” Youngsclaims. McCain raised USD 27 million in campaign funds using the “Canada is a long way from recovery,” Youngs admits. “We’ve trainedtraditional routes. Obama raised USD 55m online. More profoundly, customers to buy on deal and we’re finding it hard to come backsociety is moving from the hierarchy to the network. Hierarchies work to EDLP.” Despite a very cautious consumer, some forces remainon command and control. Networks function via collaboration. Youngs strong: two thirds of the population is obese and ethnic migration issays we have moved on from the ages of agriculture, industry, and even the principal source of population increase. “Specialist ethnic formatsthe information age. The 21st century is about experience. So what are changing the market complexion,” Youngs said. Sobeys has yet todo consumers want in the age of experience? Youngs says they want define its post-recession value equation, is “still figuring out” how tospeed, authenticity, transparency, community, customization, grass- create experiential food shopping and the optimal offer for the “ethnicroots innovation, networked workplaces and social responsibility. To consumer”. But it’s working on it.10 Marketing Forum 2010 - ExEcutivE Summary
  11. 11. 25 Years Innovating Customer Relationships Luis Moutinho, chief Executive Officer, Sonae mc, Portugal Since 1985 Sonae’s success has been based on its obsession to keep in be offered relevant, targeted propositions.” Sonae has addressed this with its formats Continente, Modelo and Modelo Bonjour, along with its specialized non-food retail formats, like Worten (electronics), Modalfa step with changes in the habits (apparel) , Sport Zone (sporting goods) , Zippy (kids wear), Book It and routines of Portuguese (book store) and Área Saúde (pharmacy or health & beauty). Some people, to democratize 87% of Portuguese families also have the company’s loyalty card. consumption, understand its However, none of this would be possible without the company’s strong customers and deliver more value. sense of belonging to the communities where its stores are present.Delivering both convenience for those who need to be quick and Sonae has launched 20 projects concerning environmental and socialleisure spaces to encourage people to linger have been key. Once sustainability, has created 32 parks totaling 16,000 square metres ofprice and variety are assured, the consumer turns to aesthetics. It’s green space across the country. Sonae’s Producer’s Club partners withabout providing a better store experience, which leads to greater 250 local suppliers and offers technical help. Finally, entertainmentengagement. More than anything, consumers want choice and control events such as the Mega Picnic Modelo, in which 110,000 customersin the way they shop: “Customers want to be treated as unique and to came to listen to popular singer Tony Carreira. The Consumer is Changing. So What Does it Mean to the Retailer? Mark Price, managing Director, Waitrose, united Kingdom & member of the Board of Directors, the consumer Goods Forum A s a premium retailer with a brand based around “all-round quality food” and a promotional activity, including offering free delivery online. The third step, which “surprised a lot of people,” was to introduce a new entry- level own label range: Essentials. “Not cheap, or economy – it’s about price perception in line with being letting the consumer understand where they trade into Waitrose.” the Queen’s official supermarket Next, Waitrose reinforced its top tier, the Prince of Wales’ gourmet of choice, Waitrose was experiencing organic brand Duchy Originals. Waitrose thus offered consumers bothslow organic growth. With a low operating margin, it was hard for the chance to trade in from other supermarkets with Essentials andthe retailer to expand beyond two stores a year: “We were basically trade down from restaurants with Duchy. Waitrose also introduced aoutbid by everyone else,” Mark Price said, adding that Waitrose only Tesco price match campaign on 1000 branded products. Consumersmanaged to enter a new market when the town itself encouraged the perceived Waitrose as being 29-33% more expensive than Tesco, whenentry because it wanted the Waitrose brand. Nonetheless, in the ten in fact, it is only 2-3% higher-priced. The final piece was to increaseyears from 2000, Waitrose has moved from a GPB 1.9 billion business its communication by advertising its points of difference. “We want toto a GBP 4.5 billion business, while operating profit and margin have own the weekend … and teach the nation how to cook.” Two celebrityincreased from GBP64 million and 3% respectively in 2000 to GBP267 chefs were the faces of this campaign: Delia Smith emphasized themillion and 6%. “Tesco has 7%, Asda and Sainsbury’s have 3%,” everyday, while Heston Blumenthal reinforced the aspirational. TheirPrice asserted. recipe-based weekly adverts drove volume and brought in half a million extra customers (with the lion’s share switching from Sainsbury). TheAs the financial crisis unfolded, the key to improving the numbers operation brought a volume uplift of 7%, ahead of target. Costs werewas moving from a margin business to a volume business: driving offset by GBP 50-60 million in operational efficiencies.increased sales by offering lower prices. The principal risk here wasbrand damage. Waitrose customers buy into the premium positioning, Price sees the various measures as giving more people access toconfident that they are buying high quality and the health and lifestyle the brand. “We were prepared to take a margin hit to get volume.aspirations that come with that. So it was critical to make the move The team has been courageous; they dared to take a risk becausewithout alienating existing customers. To hit its profitability target, they felt they could.” Responding to a question about culture changeWaitrose needed 5% volume uplift. It attacked its price perception by from Jean-Marc Saubade, Price conceded that he had needed to makereducing some outlying prices: “We reckoned that our customers didn’t “some changes to the board, as not everyone was prepared to changeknow the price of bin liners, so we had charged 60% more for ours. so quickly”. But he added: “If we hadn’t done it, we would have beenWe brought these kind of prices down.” Next, the retailer increased in deep trouble.” Marketing Forum 2010 - ExEcutivE Summary 11
  12. 12. Adapt or Die Miles Hanson, chief Executive Officer and Founder, the collaboration company, united Kingdom W e are at the end of the zero sum game. It is no longer appropriate for are two types of people, Hanson claims: innovators and idea builders. Innovators are vital, but those who can take new ideas and develop them further are also indispensable in the collaborative process. business to be dominated by Hanson, whose company consults on collaboration within companies, “I win, you lose” mentality. In the has set out a number of principles for achieving this: age of networks, what is needed 1. Set expectations. is a more collaborative approach. This is not simply about parallel working or 2. Be clear on your goal.shared information; it is about achieving more than you could alone. 3. See the benefits of a diverse perspective.True collaboration brings better ideas, faster solutions and a genuinecommitment to make things happen. “This is the biggest deal in the 4. Don’t become defensive.way we work since the internet.” However, changing mindsets can 5. Look with a beginner’s mind, not an expert’s mind.take time. You have to beware of defensiveness and “watch out for 6. Explore as many options as possible.the experienced idea killers” who temper innovation with commentssuch as “It won’t work because …” Rather, you need to look with a 7. Build on ideas.beginner’s mind, because the beginner still has endless possibilities. 8. Listen.“Too many adults have limiting beliefs about creativity,” Hanson says.“Adults fear the judgment of others.” This can lead groups to quickly 9. Don’t get attached to an outcome.concurring on the first idea that comes to mind and pursue it at all 10. Make the first move.cost. But it is imperative to explore as many options as possible. ThereTwo Different Marketing Approaches to WinTomorrow’s Consumer: High-Tech vs Simplicity Global Marketing e-tailing Challenges and Solutions for Marketers Niall McKinney, managing Director of utalkmarketing, former chief marketing Officer, Europe,, united Kingdom O nline shopping: access used to be slow, there was limited choice and we were all 1. Data is the new Intel Inside: without it you can’t start a relevant conversation with your customer. 2. One-to-one communication is vital: up sell, tempt them back. Ryanair, a bit nervous about putting our the “king of cross-sell” derives only a third of its purchase value from ticket credit card details into a website. price. But now that these original barriers 3. Long tail: this is not about best-sellers. Hold no physical inventory and to adoption on the consumer side have expand the range of what you sell: “you will profit from the 80% of stuff that been removed, e-commerce is coming of age. doesn’t sell so much”.Or, at least, it is outside of FMCG, McKinney says. Half the world’s populationnow has mobile internet. The benefits are visible: Ocado derived 5% of all 4. Interface countssales from mobile devices within three months of adoption. Pizza Hut’s home 5. Participation: there are 40 million consumer reviews on app made USD 1 million in its first month. Is grocery missing out? “When consumers are making a purchasing decision, they want to hear fromHere are some tips on growing e-commerce in the 21st century: other consumers.” 6. Optimise relentlessly: Amazon does this. “Recognise the power of numbers and people who can work with numbers.”12 Marketing Forum 2010 - ExEcutivE Summary
  13. 13. The Magic of the Dabbawala Unfolded Manish Tripathi, chairman, Dabbawala Foundation, india T he key to the stunning efficiency and negligent error rate (one in six million) without language, the delivery address and rail station, along with the return address. The tins are then collected punctually by a local dabbawala. The system has no time or sympathy for late preparation: of Mumbai’s unique dabbawala “get rid of bad customers,” Tripathi advises. If the women are late, service, according to Tripathi, is the dabbawala won’t wait for them. If they are consistently late, they the deeply-instilled belief of the will be ejected from the service. The collecting dabbawala takes his largely illiterate force of deliverymen haul of dabbas to a local sorting office, where they are grouped that, by carrying home-cooked lunches to according to delivery area and packed onto trains. At each station,Mumbai’s affluent businessmen, they are serving God. Tripathi believes the relevant batch is handed over to a local dabbawala, who will makethat being accountable to a divine authority is both more important the delivery, often on foot or by bicycle. Every dabbawala is paidand ultimately more effective than an MBA, for which qualification he the same salary, regardless of his function, which Tripathi believesholds little respect. fosters cohesive teamwork. The whole service – which sees 5,000 dabbawalas transport 200,000 lunchboxes every day, is carried out,The service is driven by demand from Mumbai’s office workers, who rain or shine, using virtually no modern technology. Finally, Tripathiprefer a home-cooked meal as both cheaper and safer than eating out says the service does not advertise and does not need to, as it servesat lunchtime. Its delivery chain is ruthlessly efficient. Meals are cooked a genuine consumer home during the morning “by wives or sisters” and packed into a tin(or dabba). Each dabba is marked with a colour code, which indicates, Question & Answers Marketing Forum 2010 - ExEcutivE Summary 13
  14. 14. Networking DinnerHacienda Quinta do Torneiro kindly sponsored by14 Marketing Forum 2010 -- ExEcutivE Summary Marketing Forum 2010 ExEcutivE Summary
  15. 15. Marketing Forum 2010 - ExEcutivE Summary 15
  16. 16. Thursday 4 November thPortuguese Success –at Home and Beyond Borders Jerónimo Martins’ Runaway Success Eduardo Cid Correia, chief Operating Officer, Jeronimo martins, Portugal C an retailers export a global model as a pathway to growth? The non-food Meanwhile, in Portugal, the company faced competition from discounters. It had dismissed the threat as a different segment, but now realized it had to take action, as like-for-likes declined. It worked retailers can, Eduardo Correia on dropping prices, rationalizing assortment, developing private label, says. Zara, Ikea, Swatch, for investing in fresh as a USP. “We became more efficient and innovative.” example, operate the same way It moved into prepared foods, something the discounters could not everywhere. In food, however, this is not offer. Between 2008 and 2009 Jeronimo Martins increased sales 7%possible. Respect for regional differences is critical. “We have to think by value, compared to 5% from Sonae and Auchan. Meanwhile, Lidl,local,” he sums up. What Jeronimo Martins can export is its passion Carrefour and Metro moved into negative growth.for food. When it acquired Biedronka in Poland, the retailer, whichoperates the Pingo Doce banner in Portugal, found an entirely differentset of cultural parameters: small houses with little storage, significantbudgetary restrictions, a lack of confidence in organized retail, a taKEaWaySmore pragmatic and price-sensitive consumer. To learn, JeronimoMartins surrounded itself with local people and carried out intensivebenchmarking of the market, analyzing consumer tastes, ambitions 1. We sell real food for real people.and convictions. A key step was developing “true partnerships” with 2. We develop markets with customised businessPolish suppliers: 95% of Biedronka’s assortment comes from Polish models.suppliers. To eliminate the inflexibility typical of multinationals, “wehad to create a new model that was not in our DNA,” Correia says. 3. consumers tell us what to do: we do that andToday “the leadership of Biedronka is unquestionable”. more. Innovation, Creativity and Marketing Ingenuity Paulo Pereira da Silva, cEO, renova, Portugal “ Did you ever have any pleasure in toilet paper?” Asks Paulo Pereira da Silva. dead spaces, which can be turned into “brand spaces”. Despite the success, achieved entirely by a radically different approach to marketing, da Silva doubts the idea would have seen the light of day He thought not. That’s why he if someone other than the CEO had been the source of it. “Beware of decided to go to market with self-censorship,” he cautions. a daydream he had in Las Vegas “It’s difficult to have a new idea,” he continues. New ideas come from and start producing premium priced jet a child-like, open state of mind: from daydreams, as his had done. We black toilet paper. This worked surprisingly well and other primary don’t, however, tend to work in places that encourage this or are atcolours followed. Da Silva believes Renova is the first company to turn all conducive to it. That’s why at Renova, the innovation team is at thethis unglamorous, functional product into a fashion statement. Now core of the company. “I wanted to make happen a love brand with sexyit sells in up market retail areas and design stores, with a striking products even if it’s only about toilet paper,” da Silva summed up. Heand colourful approach to merchandising and display. Da Silva has suggests we all do likewise.targeted “now places” such as airports, malls and Ikea, as well as16 Marketing Forum 2010 - ExEcutivE Summary
  17. 17. Winning Tomorrow’s ConsumerMulti-channel Retailing and the Pursuit of the EverChanging ConsumerIan Crook, marketing Director,, united KingdomI n 1994, Tesco already had a multi-channel offer. It was just that, since the extra channels were telephone and notepador fax, these channels offered limited help to consumers and the role of stores. They can also act as showrooms for products only available online.were inefficient to run. “The internet came to our rescue,” But for it all to work, not onlyIan Crook said. The following year, Tesco went online: a rather do the operations need to befunctional interface “with a spreadsheet behind it”. In 2010, seamless, but the marketingTesco believes it is the only profitable online grocery retailer in must be too. The word “multi-the world. Having mastered online, Tesco finds its customers channel” is already defunct, Crook says:are demanding ever more options, such as mobile apps and “Consumers don’t shop by channel. They shop like a pinballdrive-in services. Tesco Click & Collect addresses this need. With machine. There may be ten touchpoints, but the consumer seesa seamless multi-channel approach, you can afford to rethink them all as part of one Tesco experience.Paloma Perez, marketing Director Hypermarket, carrefour SpainP aloma Perez said multi-channel retailing was the only sensible response to a consumer who is equipped to “findout what I want, buy it how I want and get it where and when next 15 days. The key is to provide an extended store experience, to manage andI want”. Only 5% of visitor’s to the retailer’s website make an deliver on the before, thee-purchase. But the rest are still making purchasing decisions during and the using the site and 90% of web visitors visit a store in the Anthony Hucker, vice President of Strategy and Business Development, Wal-mart Stores inc., uSa I f Anthony Hucker admits that Walmart in the US is “somewhat behind the UK when it comes to home delivery,” he doesn’t discount its importance. The new Site-to-Store concept influencers to gain insight into consumers. Walmart has been experimenting with new functions exactly like Tesco’s Click & Collect. The brand can formats: “We were really also be leveraged outside the controlled brand environment: good at big stores in little Walmart has mobilized 19 influential bloggers – dubbed towns,” Hucker said. “But not the Walmart Moms – to speak to and for other consumers, so much at small stores in big through the “millions of other moms that compose their towns.” combined readership”. Walmart can use their position as I n the following panel discussion, Ian Crook said if companies do it the right way, they can boost loyalty with multi-channel. However, if they mess up one channel, they can damage loyalty danger of rewarding customers for being disloyal, by offering advantages for them to come back. Hucker said that retailers were not the only ones who needed to look at multi-channel. at the rest. It has to be seamless. Hucker agreed that it was Procter & Gamble was testing a pop-up store in Manhattan, about execution: “If you do one badly, 99 will suffer.” Paloma he said. Indeed, collaboration is needed between retailer and Perez said customers would be ever less loyal in the future, manufacturers to make multi-channel effective. Asked whether but Carrefour was winning new customers through multi- there was the danger of friction here, Hucker replied: “yes, but channel. Crook agreed, saying Tesco’s Click and Collect service friction creates warmth”. was bringing in new customers. Crook added that there was a Marketing Forum 2010 - ExEcutivE Summary 17
  18. 18. Working Together to Serve the ConsumerThe Make-up Factor – Learnings from a Market that Growsduring Economic CrisisGuy Farmer, country manager, L’Oréal, Portugal M ake-up is a reliable source of profitable growth in times of economic difficulty, However, with the fragmentation of TV audiences, the store is now the key driver of awareness. Manufacturers must work closely with retailers to get the most out of this trend. L’Oréal worked with dm Guy Farmer argued. The Drogerie Markt in Germany in a bid to make the chain “the destination global colour cosmetics for make-up purchases and total cosmetics”. The companies saw that market turned over EUR dm customers were not brand loyal, so the number of brands was 31 billion in 2009; it has reduced, on the assumption that consumers could be persuaded to been a “dynamic motor” switch. The physical space saved was used to increase merchandising with continuous growth up of of top sellers and showcase innovations. The stands were redeveloped to 5% a year since 2005. In to be more seductive and sticky, providing more education and short, when everything else was communication around use and benefits. Dm’s cosmetics business shrinking, make-up continued to grow. has grown by 40% and make-up by 50% in the three years since theThe reasons are manifold: first of which is the phenomenon beauty programme began.professionals call “the lipstick factor”. Women who buy make-up doso to cheer themselves up, to feel more confident and boost theirself-image. In times of uncertainty these needs are not diminished;if anything, they increase. Secondly, constant visible innovation andfashion drive existing customers back for the latest thing, while growthcomes from the addition of new users, as the category pushes intonew points of sale.18 Marketing Forum 2010 -- ExEcutivE Summary Marketing Forum 2010 ExEcutivE Summary
  19. 19. New Ways of Working TogetherJim Flannery, managing Director, customer Development, Procter & Gamble, uSaIgnacio Gonzalez Hernandez, commercial and merchandise Director Group, carrefour, FranceAlberto Moriana, vice President, Global customer Business Development, Procter & Gamble, FranceT he industry has been talking about collaboration for years, and yet today’s supply chain is still full of waste. Stores carry too many SKUs andtoo many of the wrong ones: inventories are too high and yet out of stocks 1. Focus on the consumer 2. Connect our businesspersist. Trading partners continue to focus on business minutiae instead 3. Prepare our peopleof shoppers. New Ways of Working Together (NWWT) is a Consumer Goods 4. Share our supply chainForum initiative lead by the CEOs and chairmen and seven manufacturersand seven retailers. It is not a set of rules or best practices. Rather, it is a An example of the NWWT approach to joint corporate priorities would be theprocess and a framework for getting things done via collaborative work. The vaccination campaign by Pampers, Unicef and Carrefour. Implemented in 15goal is to eliminate supply chain disruptions and enable growth, arranged countries, the campaign offered one vaccine for each product bought, withunder four headings: coordinated media and in-store exploitation. The sharing of CRM data allows collaborations on specific categories. One such project between Gilette and Carrefour saw 390 000 razor samples were offered across France, Spain, Italy and Belgium via the Carrefour loyalty card program. Key to success is the definition of common objectives, where two teams share the same KPIs. Preparing people includes changing the culture from transaction-driven models to the creation of joint value by better serving the shopper. “It’s critical to learn how to work in a multifunctional way. We cannot continue to work in silos.” Jim Flannery, managing Director, customer Development, Procter & Gamble, uSa Ignacio Gonzalez Hernandez, commercial and merchandise Director Group, carrefour, France Alberto Moriana, vice President, Global customer Business Development, Procter & Gamble, France Marketing Forum 2010 - ExEcutivE Summary 19
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