1. Insight Information in Category Management

2. Insight Information in Category Management Co-operation

3. Targets: To illustratehowinformation is used in retailer-supplierpartnership to enhance the confectionarycategoryperformance and growth. To give some practicalexamples of the key knowledge tools and practices Agenda: Introductions Short companypresentations Partnership From data to informationtools Segmentation, clusters, solutions Examples of day to daycategory management Planning of assortments – case launching novelty Fazer Nordic Gourmet

4. Kesko Group, year 2009 Building and home improvement trade Food trade 44 % of net sales 27 % of net sales Car and machinery trade Home and speciality goods trade 11 % of net sales 18 % of net sales The K-Group’s sales were €12.6 billion Sales in Finland €10.5 billion K-food stores’ sales €5.7 billion Hypermarket (K-citymarket), supermarket (K-supermarket, K-market) and proximity stores (K-extra) The number of the K-Group personnel wasc. 45,000, of whom 22,200 were Kesko employees

6. Sweden: building and home improvement trade

7. Norway: building andhome improvement trade

8. Baltics: building and home improvement, agricultural and machinery trade, furniture trade and distance sales

9. Russia: building and home improvement trade, machinery trade

10. Belarus: building and home improvement tradeFinland5.3m Norway 4.5m St. Petersburg area 5m Estonia 1.4m Sweden9m Latvia 2.3m Moscowarea 15m Lithuania 3.4m Belarus9.8m Total about 56m consumers

12. Almost 1400 restaurants in the Nordic countries, Estonia, Latvia and Russia

13. 360 000 meals daily

14. Turnover 536 M€ (2009)

15. Number of personnel 7 500

16. Finland's leading bakery and confectionery company, one of the leading companies in the Baltic Sea region and Russia.

17. 21 bakeries in Finland, Sweden, Estonia, Latvia, Lithuania and Russia. Market leader in St. Petersburg.

18. The confectionery factories are located in Finland: Vantaa, Lappeenranta and Karkkila

19. Turnover 905 M€ (2009)

21. Customer and trend insight for competitive advantage Over 50 FMCG retail and supplier customers Our FMCG supplier customers’ combined market share is over 70% in Finland. Comprehensive management system from strategic to tactical level • Advanced customer segmentation • Planning tools for category management processes, supplier collaboration and marketing • Corporate performance management, analysis and reporting systems • Product information maintenance • Consulting in customer insight

22. Partnership

23. Partnership between Kesko Food and Fazer Why to do it? Seeking for constant Sales and Profit growth Utilize and understand consumer and shopper insights To improve target customer’s service and price image of the category To do it with less costs and more efficient way Common KPI’s Need to understand different levels of co-operation Fazer Confectionary Kesko Food Ltd K-retailers (multi format independent entrepreneurs)

24. Fazer has many interfaces towards Kesko Food Optimal assortment and delivery accuracy towards K-food stores Demand analysis Assortment and spacem. planning Pro-curement Plano- grams Seasons Campaings Novelties Several co-operation interfaces Log. model Buying to WH Ware- housing Satisfaction, re-buying Buying Store Replenish-ment Delivery Instore logistics In store Pro-motion Customer service Best shelf availability and quality to consumers

25. Workshop Kesko-Fazer, March 2010 Topics shared: Ways Kesko Food and K-retailers are operating Main activities planned for 2010 In-store activities Common actions for Spring and Summer 2010 How to gain more market share? Page 12

26. Partnership as Kesko Food and Fazer do it What does it include? Shared vision and strategies Co-processes Co-projects Shared tools and practices

27. Management Rolling 12 months partnership calendar Marketing Tactical Logistical Tactics for the summer . Dec Locistical plans for the start of the next year Jan Nov . Tactics for the Christmas Feb Oct Locistical plans for the summer Insight information Locistical plans for the autumn March Sep April Aug Tactics for the start of the next year . . Tactics for the autumn May July June

28. Partnership as a process Strategical level -top management Marketing level - Chain marketing Tactical level - Purchasing Operational level -Logistics, Sales field Feedback / Best Practices - Assortment and Space Management - Activities - Business scorecards - projects - Main guidelines - Sources of differentation - Management Scorecards - Trade as a media - Marketing plans - Brand synergy - execution

30. Fazer Confectionary’s KeyAccount Manager’s workbench Market reports And studies Kesko Food’s Customer segmentation Kesko Food’s POS- data Fazer’s DW Kesko Food’s DW Kesko Food’s Store Clusters by Chains Observations And feedback From Sales Reps Kesko Food’s marketing Plans by chains Mutual Scorecards And information tools Fazer Confectionary’s Sales Reps /Kesko Food’s information tools

31. The knowledge tools in use From data to information tools Segmentation, clusters, solutions

32. Services for Kesko and suppliers Product information Planning tools and reporting Segmentations Expert services Consumer trend modelling Product attributes (about 100) Customer and category tracking Product information maintenance (30 000) products Marketing, campaigns, NPIs Portfolio management and R&D Customer segmentations Customisation of reports Assortment planning and pricing Performance measures Training Consulting Support Store segmentations

33. K-food stores use a set of unique structures and equipment for assortment planning Page 20

34. Revised assortment structure Cluster based assortment Store size based assortment Formats nationwide assortment for chains Core assortment for K-food Store

35. Consumers buy product benefitsShopping behavior reveals important trends ...this product has less salt.... ...it’s good for my health... ...this brand I can trust.... Trends .. describe consumers’ needs and values, and their changes associated with product attributes: certain attributes certain trends

36. Trends linked to Nordic Gourmet Quality New experiences and sensory Indulgence Strong brands

37. Nordic Gourmet trends in FoodStyle groups Quality New experiences and sensory

38. Customer emphasis for Nordic Gourmet

39. Nordic Gourmet trends in store clusters – FoodStyle groups are basis of store cluster assortments New experiences and sensory Quality

40. Assortment suggestion for K-supermarket cluster 1 Excellent match for the target customers of the chain The assortment planning tools automatic suggestion ranks the products #2, #4 and #6 in their segment!

41. Thank you!