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Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
Stephen Schueler. P&G
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Stephen Schueler. P&G

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  • 1. 1 “Listening to the Boss” Stephen Schueler Procter and Gamble June’2’ 2010
  • 2. Key for business is to keep the BOSS happy!
  • 3. Meet Our Bosses, The Ivanovs: Olga and Igor… Olga is 35 y.o Igor is 37 y.o. They have one child
  • 4. P&G is focused to build full understanding of consumer, shopper and environment Talk to people Visit people at Observe people their homes In-store Model and predict Conduct consumer and Quantitative market behavior studies Register and analyze purchases
  • 5. Life in Moscow • Moscow drives the trends for Russia! • Incomes are the highest here • They can afford to buy premium products • They like to try novelties in the market • In the regions lower income per capita • So they use mid-tier products • They lag behind some aspects (lower ownership of durables, PC etc.)
  • 6. Russians are highly educated, doing skilled work vs. other countries % Russia Poland USA High education - urban women 32 11 25 - urban male 38 9 26 Employment - urban women 58 36 57 - urban male 75 52 70 Source: TGI, 2005, age 15+ USA NCS 05/06, age 18+
  • 7. Key Russian consumer trends  Getting more and more demanding, rational and smart  Increasing importance of traditional human values “love-home-family”  Investing in future and experiences  Highly involved in Health & Beauty
  • 8. Getting more demanding, rational and smart • Rely only on personal budget • Quality, reliability and customization • Shopping is planning and value 70 60 50 40 30 20 10 0 Shopping there is Prod I want are Shopping there is easy Is a store which I trust cheaper consistently available and fast 2002 2007 2009
  • 9. Increasing role of traditional values • Love-home-family, safety and well-being • Help others & charity TOP 5 VALUES Russians, % 2007 2009 HOME 80% 86% FAMILY 75% 81% LOVE 60% 78% WELL-BEING 70% 75% SAFETY 63% 73%
  • 10. Invest in future and experiences • Appearance, health maintenance and preventive measures • Personal and children education # 2009 vs. 2007 FITNESS CLUBS 140 • Thirst for experiences BEAUTY SALONS 125 TOP 5 CONCERNS OF RUSSIANS ECONOMY JOB SECURITY WORK/LIFE BALANCE HEALTH CHILDREN EDUCATION AND WELLFARE
  • 11. She is highly involved in Health and Beauty 2009 – She purchases more cosmetics and skin care products. Shopping for beauty is considered as “time for myself” and is expected to be a pleasurable experience. Russians are heavily beauty focused Usage of cosmetics (%), 2000-2009 80 Russia WE 70 Women 45+ Moscow 60 50 Be attractive for men is 90 41 40 important, % Being well dressed is 30 20 important, % 89 57 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Anti wrinkle cream Cream for eye-lids Day cream Source: TGI Russia, 2009 FOM fact-book 2009, MCA 2003
  • 12. What did we learn regarding Crisis Impact on Russian Consumer?
  • 13. 2008 Crisis Hit 2008-09 economic changes have affected Ivanovs’ welfare 140 $600 $514 Average monthly income per capita, USD 120 115 113 112 110 111 110 112 111 $500 106 101 102.9 $491 97.7 Real income change, IYA 100 88 $400 84 84 $395 80 $375 $300 60 $287 $223 $200 40 $162 $166 $168 $145 $126 $100 20 $103 $106 $81 $67 0 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
  • 14. Families living in big cities are not as affected by crisis as their friends in smaller cities of Russia Purchasing Power in Moscow, St Petersburg and the top cities won’t decline significantly: St.Petersburg – Absolute income level is high. Moscow – Unemployment risk is lower. – Kazan Consumers have alternative sources of income. – Share of FMCG in consumption basket is lower to save on. Saratov Samara Perm Volgograd Izhevsk Ekaterinburg While small cities are more strongly affected by Vladivostok Ufa Krasnoyarsk the crisis: Chelyabinsk Omsk Novosibirsk – Township enterprises are suffering financial difficulties. leading to consumption crisis in regions. – Retailers are revising their plans in regions.
  • 15. The Ivanovs reflected financial constraints in their spending behavior • Cut down on out of home entertainment • Postpone some home improvements • Cut travelling • Started saving on non-essential food and clothes • Shopping behavior became more rational Source: Crisis Tracker consumer research
  • 16. The Ivanovs are stressed, more than ever before 45 40 1) Life is very busy 35 30 25 20 2000 15 10 2008 5 0 Time is worth more than money Russian consumers saved on: 2) Now they have less possibilities to pay for Eating out 38% free time and retreat Leisure, travels 24% Hobby, sport 23% Source: TGI and Crisis Tracker (COMCON)
  • 17. The Ivanovs changed their shopping behavior: Changes In Product Usage % consumers Russia Ukraine 2009 2009 Switched to cheaper stores 18 24 Switched to cheaper brands 16 16 Up-sized 9 10 Down-sized 3 4 P&G crisis tracker JFM’2009
  • 18. How could we together improve the lives of Russian Consumers post- crisis?
  • 19. Meet the shopper needs in-store • Consumers are lost in front of the shelves: Forced to change store Looks for information on news and promotions Expects to find the right product for her Expects to be treated like a valued customer
  • 20. Opportunity for joint collaboration between Retailers and Suppliers to improve in-store experience: 1. Help to organize departments & categories according to SHOPPER NEEDS 2. Drive PRODUCT AVAILABILITY on-shelf
  • 21. Shopper behavior differs by trade channel She EXPECTS She does BIG time-consuming PROFESSIONAL She makes ROUTINE purchases shopping for WHOLE HELP in baby Stores at BEST PRICE in Discounter FAMILY in Hypermarkets She COMES TO SOCIALIZE to Open Market She BROWSES AND LOOKS FOR INFO/EXPERIENCES in Perfumery She is ready to PAY MORE for BEST QUALITY in Pharmacy
  • 22. Design right Shopping Experience for each channel • • Relevant Assortment • Right Shelf based on Shopper Decision Tree • Right Category Adjacency within the Department • Right Navigation • Right Promotional Strategy
  • 23. EXAMPLE: Grooming Category Re-design in KARUSEL Male Grooming Category Shoppers • 70% of shoppers buy Blades & Razors from the main shelf • Highly planned purchase - above 70% • High level of loyalty on Blades&Razors (retailer loses 66% if OOS) Key Actions • Blades & Razors in Open Access • Shelving according to Shopper Decision Tree • Loss prevention procedures implemented Results 1. Growth index: • Blades & Razors +89% • Shave Category Total +50% 2. Shrinkage decreased 2 times
  • 24. Improving Product Availability In-Store •• Shelf OOS reduction – Joint Root Cause Analysis – Category-specific approach • Leverage technology to optimize Supply – Advanced EDI; – GDSN • Reduce Shrinkage – Focus on high pilferage items/ implement “Roadmap”
  • 25. Improving Shelf Availability: Win/Win opportunity between Suppliers and Retailers Shelf Out of Stock progress 20% 15% 10% Target < 5% 5% 0% Aug.2007 Aug.2008 Aug.2009 Mar.2010 Focus on Baby Diapers. Key Actions: SOOS Baby Diapers, % • Improving service ex-P&G via by-customer 25% volume forecasting 20% • Assortment alignment/ non-active EAN codes 15% in Retailer/P&G database clean-up Baby Diapers 10% • Joint work with retailers to improve category 5% Total P&G planograms based on SKU turnover 0% • Test Category Space Extension November'2007 March'2010
  • 26. Enabling Technologies in Joint Integration Areas P&G and METRO: Integration of advanced EDI into daily business procedures  Switch to Direct Deliveries via MGL  3 full-time employees work-reduction (Joint value for P&G and METRO);  Implementation of advanced  Assured data accuracy in invoicing electronic data flow documents Information flow optimization Service level increase by 14 points and automation of core logistics processes
  • 27. Reducing Shrinkage Losses/ shrinkage Mistakes External Mistakes in during goods Internal theft Theft processes acceptance (30%) Traditional approach ECR approach
  • 28. In Summary: • It starts with deep understanding of the Russian consumer and environment • Suppliers and Retailers should partner to turn this knowledge into winning in-store solutions; •Those who collaborate most effectively will best meet the needs of their consumers
  • 29. THANK YOU

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