ECR Europe Forum '05. Category Management in a limited data environment. Case Study Gillette

RAMSTORE & GILLETTE Oral Care Category Management Project Anton Voichik National Key Account Manager Kirill Liseev Oral Care Business Director

Agenda  Oral Care Category Review – Russia market review – Supermarket channel dynamics  Oral Care Category Management Project – Joint Business Planning – Agreement to proceed – Analysis – Implementation – Review  Future Collaboration

Toothbrush Market Review

Global Market Share Leadership 34% Value Shares:  Manual - 22% (#1)  Power - 48% (#1) – Rechargeables 70% (#1) – Battery 30% (#2)  Reﬁlls - 73% (#1)

Oral-B: Clear Global Leader Oral-B Global Market Share Other 23% Oral-B J&J 34% 4% SKB 7% Colgate 17% Unilever 6% P&G 6%

Toothbrush Market Size - Russia Market size has grown significantly over past years MM units In 2003, category growth has slowed down 100 95.0000 91.6000 89.1000 90 80 70.8000 70 60 52.5000 50 44.5000 40 1999 2000 2001 2002 2003 2004

Toothbrush Market Segments - Russia Low price segment is still the largest in volume Premium segment is the clear contributor in value 92 MM toothbrushes 56 MM USD Volume % Value % 21.5 27.7 49.9 56.3 22.2 22.4 Low Price Mid Price Premium Price

Toothbrush Segment Development Continuous upgrading of market during past three years 67.7 66.7 61.9 60.6 57.6 54.2 49.4 28.9 24.4 21.9 20.5 21.4 21.7 19.4 18.8 19.8 19.6 17.2 17.9 %15.1 15.5 JF 2001 JA 2001 JF 2002 JA 2002 JF 2003 JA 2003 JF 2004 Low Price Mid Price Premium Price

Value Share Trends - Russia Oral B continues to achieve record market share growth while 35 Colgate is leading with strong position 34.0000 30 31.4000 29.9000 26.8000 28.2000 27.6000 25.7000 25.6000 25.3000 25 25.1000 25.1000 23.3000 23.2000 22.5000 20.0000 20 18.6000 15 13.9000 12.1000 10 10.9000 10.9000 9.7000 9.5000 9.3000 8.8000 5 0 JF 01 JA 01 JF 02 JA 02 JF 03 JA 03 JF 04 Avg 01 Avg 02 Avg 03 Colgate Oral-B GSK Avg.Oral-B share

Importance of KOBs Total Toothbrushes Oral-B JF 2004

Toothbrush Market Size - Moscow Supermarkets 1000 units Market size has grown significantly over past years 2540 2311.0000 2125.7959 2040 1540 1136.8990 1040 632.0581 540 325.2986 109.7365 40 1999 2000 2001 2002 2003 2004

Manual Value Share Trends Moscow Supermarkets Strengthening Leading Position 45 43.2078 40 35 30.4482 32.6898 32.5789 30 26.5105 25.5374 25 25.8953 26.3559 23.7047 21.0229 24.5275 22.4001 19.6220 20 15 13.1711 10 11.2665 11.2045 11.7682 10.1602 7.9357 8.0937 5 5.1205 0 JF 01 JA 01 JF 02 JA 02 JF 03 JA 03 JF 04 Oral-B Colgate GSK Avg.Oral-B share Source: AC Nielsen Russia National

Power Value Share Trends Moscow Supermarkets 7.5000000000% 7.4000015259% 7.2999992371% 7.2000007629% 7.1000022888% 7.0000000000% Strengthening Leading Position 57.4110% 6.9000015259% 6.7999992371% 6.7000007629% 6.6000022888% 6.5000000000% 6.4000015259% 6.2999992371% 6.2000007629% 6.1000022888% 6.0000000000% 5.9000015259% 5.7999992371% 5.7000007629% 5.6000022888% 5.5000000000% 5.4000015259% 5.2999992371% 5.2000007629% 5.1000022888% 5.0000000000% 4.9000015259% 4.7999992371% 4.7000007629% 4.6000022888% 4.5000000000% 4.4000015259% 4.2999992371% 4.2000007629% 4.1000022888% 4.0000000000% 52.2400% 3.9000015259% 3.7999992371% 3.7000007629% 3.6000022888% 3.5000000000% 3.4000015259% 3.2999992371% 3.2000007629% 3.1000022888% 50.9200% 3.0000000000% 2.9000015259% 2.7999992371% 2.7000007629% 2.6000022888% 2.5000000000% 2.4000015259% 2.2999992371% 2.2000007629% 2.1000022888% 2.0000000000% 50.0500% 1.9000015259% 1.7999992371% 1.7000007629% 1.6000022888% 1.5000000000% 1.4000015259% 1.2999992371% 1.2000007629% 1.1000022888% 1.0000000000% 0.9000015259% 0.7999992371% 0.7000007629% 0.6000022888% 0.5000000000% 0.4000015259% 0.2999992371% 0.2000007629% 0.1000022888% 0.0000000000% 9.9000015259% 9.7999992371% 9.7000007629% 9.6000022888% 9.5000000000% 9.4000015259% 9.2999992371% 9.2000007629% 9.1000022888% 9.0000000000% 8.9000015259% 8.7999992371% 8.7000007629% 8.6000022888% 8.5000000000% 8.4000015259% 8.2999992371% 8.2000007629% 8.1000022888% 8.0000000000% 46.2900% 7.9000015259% 7.7999992371% 7.7000007629% 7.6000022888% 7.5000000000% 7.4000015259% 7.2999992371% 7.2000007629% 7.1000022888% 7.0000000000% 6.9000015259% 6.7999992371% 6.7000007629% 6.6000022888% 6.5000000000% 6.4000015259% 6.2999992371% 6.2000007629% 6.1000022888% 6.0000000000% 5.9000015259% 5.7999992371% 5.7000007629% 5.6000022888% 5.5000000000% 5.4000015259% 5.2999992371% 5.2000007629% 5.1000022888% 5.0000000000% 4.9000015259% 4.7999992371% 4.7000007629% 4.6000022888% 4.5000000000% 4.4000015259% 4.2999992371% 4.2000007629% 4.1000022888% 4.0000000000% 42.0100% 3.9000015259% 3.7999992371% 3.7000007629% 3.6000022888% 3.5000000000% 3.4000015259% 3.2999992371% 3.2000007629% 3.1000022888% 3.0000000000% 2.9000015259% 2.7999992371% 2.7000007629% 2.6000022888% 2.5000000000% 2.4000015259% 2.2999992371% 2.2000007629% 2.1000022888% 2.0000000000% 1.9000015259% 1.7999992371% 1.7000007629% 1.6000022888% 1.5000000000% 1.4000015259% 1.2999992371% 1.2000007629% 1.1000022888% 1.0000000000% 0.9000015259% 0.7999992371% 0.7000007629% 0.6000022888% 0.5000000000% 0.4000015259% 0.2999992371% 0.2000007629% 0.1000022888% 0.0000000000% 40.3800% 37.9100% 9.9000015259% 9.7999992371% 9.7000007629% 9.6000022888% 9.5000000000% 9.4000015259% 9.2999992371% 9.2000007629% 9.1000022888% 9.0000000000% 8.9000015259% 8.7999992371% 8.7000007629% 8.6000022888% 8.5000000000% 8.4000015259% 8.2999992371% 8.2000007629% 8.1000022888% 8.0000000000% 7.9000015259% 7.7999992371% 7.7000007629% 7.6000022888% 7.5000000000% 7.4000015259% 7.2999992371% 7.2000007629% 7.1000022888% 7.0000000000% 37.4200% 6.9000015259% 6.7999992371% 6.7000007629% 6.6000022888% 6.5000000000% 6.4000015259% 6.2999992371% 6.2000007629% 6.1000022888% 6.0000000000% 34.2400% 5.9000015259% 5.7999992371% 5.7000007629% 5.6000022888% 5.5000000000% 5.4000015259% 5.2999992371% 5.2000007629% 5.1000022888% 5.0000000000% 4.9000015259% 4.7999992371% 4.7000007629% 4.6000022888% 4.5000000000% 4.4000015259% 4.2999992371% 4.2000007629% 4.1000022888% 4.0000000000% 3.9000015259% 3.7999992371% 3.7000007629% 3.6000022888% 3.5000000000% 3.4000015259% 3.2999992371% 3.2000007629% 3.1000022888% 3.0000000000% 2.9000015259% 2.7999992371% 2.7000007629% 2.6000022888% 2.5000000000% 2.4000015259% 2.2999992371% 2.2000007629% 2.1000022888% 2.0000000000% 1.8999996185% 1.8000011444% 1.7000007629% 1.6000003815% 1.5000000000% 1.3999996185% 1.3000011444% 1.2000007629% 1.1000003815% 1.0000000000% 31.3500% 31.6300% 0.8999996185% 0.8000011444% 0.7000007629% 0.6000003815% 0.5000000000% 0.3999996185% 0.3000011444% 0.2000007629% 0.1000003815% 0.0000000000% 9.8999996185% 9.8000011444% 9.7000007629% 9.6000003815% 9.5000000000% 9.3999996185% 9.3000011444% 9.2000007629% 9.1000003815% 9.0000000000% 29.1700% 8.8999996185% 8.8000011444% 8.7000007629% 8.6000003815% 8.5000000000% 8.3999996185% 8.3000011444% 8.2000007629% 8.1000003815% 8.0000000000% 28.6200% 26.3100% 28.0700% 7.8999996185% 7.8000011444% 7.7000007629% 7.6000003815% 7.5000000000% 7.3999996185% 7.3000011444% 7.2000007629% 7.1000003815% 7.0000000000% 27.6800% 27.4000% 6.8999996185% 6.8000011444% 6.7000007629% 6.6000003815% 6.5000000000% 6.3999996185% 6.3000011444% 6.2000007629% 6.1000003815% 6.0000000000% 26.5500% 5.8999996185% 5.8000011444% 5.7000007629% 5.6000003815% 5.5000000000% 5.3999996185% 5.3000011444% 5.2000007629% 5.1000003815% 5.0000000000% 23.6200% 25.3100% 25 4.8999996185% 4.8000011444% 4.7000007629% 4.6000003815% 4.5000000000% 4.3999996185% 4.3000011444% 4.2000007629% 4.1000003815% 4.0000000000% 3.8999996185% 3.8000011444% 3.7000007629% 3.6000003815% 3.5000000000% 3.3999996185% 3.3000011444% 3.2000007629% 3.1000003815% 3.0000000000% 2.8999996185% 2.8000011444% 2.7000007629% 2.6000003815% 2.5000000000% 2.3999996185% 2.3000011444% 2.2000007629% 2.1000003815% 2.0000000000% 22.7500% 23.0100% 22.4500% 1.8999996185% 1.8000011444% 1.7000007629% 1.6000003815% 1.5000000000% 1.3999996185% 1.3000011444% 1.2000007629% 1.1000003815% 1.0000000000% 21.4000% 21.0800% 21.0100% 0.8999996185% 0.8000011444% 0.7000007629% 0.6000003815% 0.5000000000% 0.3999996185% 0.3000011444% 0.2000007629% 0.1000003815% 0.0000000000% 9.8999996185% 9.8000011444% 9.7000007629% 9.6000003815% 9.5000000000% 9.3999996185% 9.3000011444% 9.2000007629% 9.1000003815% 9.0000000000% 8.8999996185% 8.8000011444% 8.7000007629% 8.6000003815% 8.5000000000% 8.3999996185% 8.3000011444% 8.2000007629% 8.1000003815% 8.0000000000% 7.8999996185% 7.8000011444% 7.7000007629% 7.6000003815% 7.5000000000% 7.3999996185% 7.3000011444% 7.2000007629% 7.1000003815% 7.0000000000% 6.8999996185% 6.8000011444% 6.7000007629% 6.6000003815% 6.5000000000% 6.3999996185% 6.3000011444% 6.2000007629% 6.1000003815% 6.0000000000% 5.9000005722% 5.8000001907% 5.6999998093% 5.6000003815% 5.5000000000% 5.4000005722% 5.3000001907% 5.1999998093% 5.1000003815% 5.0000000000% 4.9000005722% 4.8000001907% 4.6999998093% 4.6000003815% 4.5000000000% 4.4000005722% 4.3000001907% 4.1999998093% 4.1000003815% 4.0000000000% 3.9000005722% 3.8000001907% 3.6999998093% 3.6000003815% 3.5000000000% 3.4000005722% 3.3000001907% 3.1999998093% 3.1000003815% 3.0000000000% 13.7200% 2.9000005722% 2.8000001907% 2.6999998093% 2.6000003815% 2.5000000000% 2.4000005722% 2.3000001907% 2.1999998093% 2.1000003815% 2.0000000000% 12 1.9000005722% 1.8000001907% 1.6999998093% 1.6000003815% 1.5000000000% 1.4000005722% 1.3000001907% 1.1999998093% 1.1000003815% 1.0000000000% 11.7400% 0.9000005722% 0.8000001907% 0.6999998093% 0.6000003815% 0.5000000000% 0.4000005722% 0.3000001907% 0.1999998093% 0.1000003815% 0.0000000000% 9.9000005722% 9.8000001907% 9.6999998093% 9.6000003815% 9.5000000000% 9.4000005722% 9.3000001907% 9.1999998093% 9.1000003815% 9.0000000000% 8.9000005722% 8.8000001907% 8.6999998093% 8.6000003815% 8.5000000000% 8.4000005722% 8.3000001907% 8.1999998093% 8.1000003815% 8.0000000000% 8.0000% 7.9000000954% 7.8000001907% 7.7000002861% 7.5999999046% 7.5000000000% 7.4000000954% 7.3000001907% 7.2000002861% 7.0999999046% 7.0000000000% 7.1800% 7.6400% 6.9000000954% 6.8000001907% 6.7000002861% 6.5999999046% 6.5000000000% 6.4000000954% 6.3000001907% 6.2000002861% 6.0999999046% 6.0000000000% 6.1700% 5.9000000954% 5.8000001907% 5.7000002861% 5.5999999046% 5.5000000000% 5.4000000954% 5.3000001907% 5.2000002861% 5.0999999046% 5.0000000000% 4.9000000954% 4.8000001907% 4.7000002861% 4.5999999046% 4.5000000000% 4.4000000954% 4.3000001907% 4.2000002861% 4.0999999046% 4.0000000000% 4.1800% 3.9000000954% 3.7999999523% 3.7000000477% 3.6000001431% 3.5000000000% 3.4000000954% 3.2999999523% 3.2000000477% 3.1000001431% 3.0000000000% 3.7900% 3. 2.9000000954% 2.7999999523% 2.7000000477% 2.6000001431% 2.5000000000% 2.4000000954% 2.2999999523% 2.2000000477% 2.0999999046% 2.0000000000% 1.8999999762% 1.8000000715% 1.7000000477% 1.6000000238% 1.5000000000% 1.3999999762% 1.2999999523% 1.2000000477% 1.1000000238% 1.0000000000% 1.8200% 0.8999999762% 0.8000000119% 0.6999999881% 0.6000000238% 0.5000000000% 0.4000000060% 0.2999999821% 0.1999999881% 0.0999999940% 0.0000000104% 0.0000% SO 2002 ND 2002 JF 2003 MA 2003 MJ 2003 JA 2003 SO 2003 ND 2003 JF 2004 MA 2004

Market Assessment Summary  Category growth slowing down  Strong consumer upgrade to premium products  Nationally growth has been driven by distribution expansion  Oral-B has strong leading position in manual and power oral care  Oral B has the expertise to grow the overall cake and drive oral care category

RAMSTORE & GILLETTE Oral Care Category Management Anton Voichik National Key Account Manager

Ramstore Oral Care Category Background The category used to grow by double digit numbers YOY until 2003 – 57% Chemical – 43% Physical The growth was driven by the new stores openings and performance of the power and Oral-B – 92% Toothbrush – 885% Power – 241% Oral-B Oral-B is leading in Toothbrush Category in Ramstore while it is #2 in total Russia

4 Step Process Planning And Alignment Category Context STEP 1 Opportunity Identification STEP 2 STEP 3 Opportunity Delivery STEP 4

The category management opportunity and the need for data / insight Oral care category in Potential category management Russia: Category opportunities: levers:  Category growth slowing At store level: down  Pruchase frequency  Space allocation  Strong consumer upgrade to premium products  Product assortment  Nationally growth has been  Promotion mix driven by distribution  Shopper / consumer education  On-going education expansion at POS  Oral-B has strong leading position in manual and power oral care General research :  Oral B has the expertise to  Footfall grow the overall cake and drive oral care category  Shopper insight

Limited availability of the required data Required data/insight to understand impact of...: Possible sources of information: Retail data at the store level: Limited data environment:  Space allocation  Agencies: - Data not complete - Data not ready  Product assortment  Promotion mix  On-going education  Sales force: - Too time consuming ... on...: Retailers: - Data not shared with  Purchase frequency  suppliers  Trade - up  Penetration  Footfall

Oral Care solutions 1: Joint Business Plan Gillette Oral JBP Care JBP strategy articulated around the expected category management key growth drivers: – Increase the turnover and proﬁt via maximizing the frequency of purchase the trade-up and penetration – Shopper and consumer education via the on shelf communication – Increase the footfall via the life style images  Access to data:  Keyallocation JBP:  Space data to deliver  Retailer: Data shared with  Product assortment Gillette as preferred suppliers  Promotion mix  On-going education

Oral Care Encompasses a Variety of Categories that Help Consumers Maintain Healthy Mouths Definit  The Oral Care occasion is the collection of ion categories that help consumers keep their mouths healthy and beautiful Categ ories  Toothpaste  Toothbrushes  Interdental/Floss  Mouthrinse  Whitening

OC CATEGORY Oral Care Category Chemical Physical Paste Rinse Manual Power Interdental Rechargeable Floss Battery Specialist

Category Optimization - Oral Care  Get the Category Segment Space Right  Get the Assortment Right  Get the Promotional Mix Right

Get the Category Segment Space Right Opportunities Exist to Grow Category Volume by Right-Sizing Key Sections Based on Ramstore Data Main Aisle Percent Space Allocation 0.70 Before Recommended 0.50 0.30 0.20 0.10 0.05 0.03 0.05 0.03 0.02 0.02 0.03 Toothpaste Manual Power Kids Floss Rinse

Get the Assortment Right  Brand Rationalize Important Items – Consumers are confused by huge assortment – Limited Unique Selling Propositions (USP’s) – Lower price points devalue the category – Out-of-stocks on high volume brands force shoppers to go other outlets  Toothbrush Brands portfolio was Reviewed

Category Growth Driver/Support Matrix Key Brands Oral-B Colgate Reach Aquafresh Jordan Trisa Dental Professional Support New Product Development Advertising/Media Spending Trade Promotional Spending Consumer Loyalty SKU’s in Top 20

Oral Care Strategic Partnership Agreement • deal with the whole category • more focus on physical (brushes + interdental), on premium and value-added brushes • include power • have a separate dedicated Kids area • a unique Ramstore design

Oral Care Category Vision Ensure all products within the consumers consideration set are merchandised together, with appropriate call to action messages at the point of purchase to facilitate the category strategies 3 Steps : 1. Attract shoppers to the aisle – Paste adjacency is critical - forms total category in the eyes of the consumer 2. Complexity of the selection – Consumers take 137 seconds to shop the physical oral care section vs an average of 53 seconds for other HBA categories – 26% of physical oral care shoppers walk away from the aisle due to confusion. 3.Facilitate the trade up and frequiency – Effective call to action messages – Clear segmentation and use of the key brands for easy navigation

BEFORE CATMAN: Category Outlook  Toothbrush category were underspaced  Toothbrush ﬁxture on hooks looked not too attractive  Display by brand  No dedicated Kids and power section  Toothpaste were overspaced  No detailed communication at the POP  Price tags and price promo communication only

Ramstore Oral Care Visibility Elements

Oral Care Planogram Recommendation Based on the Ramstore sales data, store level recommendations were prepared

CATMAN Implementation Steps #3 Introduce lights to category to attract the shoppers #2 Introduce more Highlight the sub categories for shopper POC & Kids friendly layout #1 and replace Allocate hooks by appropriate shelves for the space for toothbrushes quemical and ﬁsical (Increase space for

AFTER CATMAN: Category Outlook

Ramstore Oral Care Category Performance 220 BEFORE AFTER 7% Oral Care 200 Category Sales Value 180 160 Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov03 Dec03 Jan04 Feb04 Mar04 Apr04 May04 90 8% Toothbrush Category Sales Value 80 70 55 Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov03 ec03 D Jan04 Feb04 Apr04 May04 Mar04 20% Oral-B 45 Sales Value 35 25 Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov03 ec03 Jan04Feb04 D Apr04 Mar04 May04

Summary: Project Results & Learnings • The appropriate space allocation, ballanced product assortment, the right promotional mix and more pleasant shopping experience can really grow the category value • The toothpaste segment did not decline despite of the reduction of the shelf space • The maintenance of the agreed planograms and the on shelf availability is vital • The evaluation is the key for the future recommendations • Understanding the magnitude of the category management and the Oral care project success, Ramenka and Gillette agreed to approach the Grooming Category

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ECR Europe Forum '05. Category Management in a limited data environment. Case Study Gillette

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