Nielsenorientationdeck faisalabadbottler

RETAIL AUDIT WORKSHOP
THE SCIENCE BEHIND
MARKET SHARE

Nielsen. The world's leading provider of
marketing information, audience measurement,
and business media products and services
Delivering an unmatched combination of insights,
market intelligence, advanced analytical tools,
and integrated marketing solutions
Nielsen provides clients with the most complete
view of their consumers and their markets
SO WE ARE

3
Copyright©2016TheNielsenCompany.Confidentialandproprietary.
NIELSEN PRESENCE
• 100 + countries • 498 offices • 40,000 associates
OUR GLOBAL FOOTPRINT

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 Main office
 Field office
COVERAGE IN PAKISTAN
Nielsen Pakistan’s strategically placed 9 offices
provide us the right leverage to cover all
accessible areas of Pakistan i.e. Urban & Rural.
Peshawar

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NIELSEN SERVICES
Retail
Measurement
Services
• Store Audit of 75 Categories
• Sole provider of RMS in
Pakistan
Retailer
Services
• Recruitment, retention
and servicing of top
retailing chains
Consumer
Insights &
Innovation
• Qualitative &
Quantitative
• Syndicated (Tracking) Or
Custom Designed
MARKET SHARE
IS A PRODUCT OF
RETAIL MEASUREMENT SERVICE

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CONSUMER RESEARCH VS RETAIL MEASUREMENT
Which Brand
to buy ?
Thirsty ?
Brand
Preferences
Retail Outlet Sale
Consumer Research is a way to understand consumer perception,
behavior and attitudes
• Which brand do they prefer
• Why do they prefer it ?
• Price
• taste
Consumer Research Retail Measurement Service
RMS is the result of the consumer action
at the point of Sale
• What is available at the outlet
• What variants are available ?
• What price is it selling at ?
Brands &
Categories

RETAIL MEASUREMENT SERVICES
(RMS)

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WHY RMS?
• Retailer sales
• Stocks
• Distribution
• Average price.
• Category trends
• Manufacturer
performance
• (Brand, variant &
SKU level)
• Trade channels
• Markets
• Urban
• Rural
Advance Analytics
• Performance with
respect to
competition
• Recommendations

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HOW DOES PEPSICO USE RMS?
• Top line
• KPIs
• Strategy
SENIOR
MANAGEMENT
• Performance
• Opportunities
for Growth &
NPD
• Brand planning
• Forecasting
MARKETING
• Chanel
Strategy
• Performance
• Distribution
TRADE FUNCTIONS
• Planning
• Reporting
INSIGHTS TEAM

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5 STEPS OF RETAIL AUDIT
PANELCollection of data on those
Panel outlets
UNIVERSEEstablishing the Retail
Universe
CENSUSCensus of all the retail outlet
types and their profile
AUDIT
Data is collected from the
Panel outlets on monthly
basis
Final Output (Report)
Composition of trade at
channel & geographical
level
Enumeration of all the retail
outlets to establish the
universe
Panel is fixed so that the
trends can be tracked
accurately
Audit is done around the
same dates of the month
for each outlet
The projected data is then
made in a report form
(Client specific)

CENSUS
UNIVERSE
PANEL
AUDIT
REPORT

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100% CENSUS –
• More accuracy
• Costly
• Time consuming
ROLLING CENSUS –
1/4th is rolling, conducted
every Year (growth, Closing
stores & changes of stores)
WHAT IS CENSUS?
Census – A methodology to completely enumerate the number of retail outlets
CENSUS UNIVERSE PANEL AUDIT REPORT

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WHY RETAIL CENSUS?
 A Retail Census is ALWAYS undertaken prior to
setting up a Retail Audit
 Census is the initial step to get first hand
knowledge about Trade Characteristics
 Census Information forms basis for further
steps:
 Identification of outlet profiles
 Universe definition

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ROLLING CENSUS
To prevent Trend
Breaks
Trade Dynamics
Census
(Ongoing basis)

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WHAT IS THE UNIVERSE ?
UNIVERSE IS THE OUTPUT OF CENSUS
• Basis for projection of the Retail Audit data
• Updated after regular intervals to reflect
Market Dynamics

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WHAT IS A PANEL
• A group of REPRESENTATIVE
STORES from the Retail
Universe are selected to
form a Panel

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PANEL DESIGN METHODOLOGY
The panel design is based on the disproportionate stratified systematic random
sampling
Homogenous cells PanelUniverse

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MAIN COMPONENTS OF PANEL DESIGN
Store SalesOutlet Type
Geographic
Location
Example
KARACHI
LAHORE
RWL/ISD
FAISALABAD
1
3
STORE SIZES
OUTLET TYPES
MULTAN
G/S
K/S
BAK
GEOGRAPHICS
FEATURES OF A CELL
KARACHI
GENERAL STORE
TURNOVER = 1
UNIVERSE 32
SAMPLE 4
(4 SHOPS REPRESENT 32)
2

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DATA COLLECTION
1st Month
2nd Month
E.g. The auditor visits on a specific date in a
month and records data
E.g. The auditor will visit around the same
date on the same store in the next month One audit cycle
Data Collected
Opening Stock Purchases
All the purchases
between the auditor
visit dates
Consumer
Offtake
Closing Stock
Stocks present at
the end of the audit
period
Closing Stock becomes
Opening Stock
next month
Purchases Closing Stock Consumer
Offtake

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DATA PROJECTION
Statistical expansion of the data collected from the panel stores
Panel Retail Universe
Data Collected
from the Panel
Factors derived on
the basis of Cells
Data Projection

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LIMITATIONS IN DATA COLLECTION
In Our region , Traditional Trade still represents a considerable proportion of
consumer sales
• Lack of documents on Purchase
• Greys and Counterfeits
• Inter Geography movements due
to better deals
ISSUES ACTION
• Purchase Diaries or incentives for
more invoices
• Some additional studies

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EVERY DATA POINT HAS FOUR DIMENSIONS
Projected data converted into Market report
• National Pakistan
(Rural + Urban)
• Urban Pakistan
• Urban Provinces
• Urban Key Cities
• Total Category
• Manufacturers
• Segments
• Brands
• Variants & SKUs
• Sales Volume/Value
• Distribution
• Out-of-stock
• Stocks
• Price
• MAT
• MONTHLY
• JAN, FEB,
MAR
• YTD
Market Product Fact Time Period

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DATA REPORTING
MANUF.PEP, KO, Gourmet, etc.
SEGMENTS
Cola, LemonLime, Orange,
Citrus, etc.
CATEGORYCarbonated Soft Drinks
BRANDSPepsi, 7-up, Mountain Dew
Pepsi MS PET 1.75L
Salted Snacks
PC, Extruded, Nimko,
Nuts, etc.
PEP, United Snacks,
Lotte,etc.
Lay’s, Kurkure, Cheetos,
Oyehoye, etc.
Lay’s Salted Rs. 20SKU

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CHANNELS IN SCOPE
Which channels do we cover in our Retail Audit ?
In-Scope Channels
Out of Scope
Channels
Weekend Markets
Exports
Wholesalers
Movie Theatres
Duty Free
Institutional
Airports/Airlines
Warehouse
Hotels & Fast Food
Internet Cafes
TER
General Stores
Gen. Med/Excl.
Med Stores
Kiryana Stores
Pan Shops
Bakeries
Dept. & Utility
Stores
Corner Stores
Eateries
Kiosks/Hawkers
WHY:
COOPERATION
DOUBLE COUNTING
LOW CONTRIBUTION

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General stores handle food, drug and other items
Normally sell branded Fast Moving Consumer Goods (FMCGs), 50% of
the floor space is occupied by the Branded products. However, they may
also carry unbranded & unpacked items but in small quantity.
GENERAL STORE

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KIRYANA STORE
Traditional stores mainly selling Loose Bulk Food (Pulses, Ghee, Flour,
Spices, Sugar etc.)
Branded FMCG’s items are also sold but relatively in less quantity
Loose Bulk Food occupies more than 50% of shop’s selling area

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Bakeries are stores selling bread, biscuits, chips, soft drinks, eggs, butter,
jam and other foodstuff.
Must handle something from above product list.
Bakery may also sell sweets but to be a bakery it should have more than
50% of selling area reserved for bakery items.
BAKERY

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Exclusive Medical Store: Stores selling prescription drugs, over the
counter medicines and limited quantity of FMCG’s. Medical Section must
be greater than 50% of total selling area
General Medical Store: Combination of Medical and General Stores
items, They handle prescription drugs along with FMCG’s. FMCG’s cover
at the most 80% of the total selling area and prescription drugs range
from 20% to 50% of selling area.
EXCLUSIVE MEDICAL/GENERAL MEDICAL STORE:

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Traditional eating place, Locally known as hotel or as a restaurant as well
Meal menu is usually described orally, self service is not there. Meal
served at the table with bread (called Roti) or rice, breakfast, tea, coffee,
cold drinks also available
Take away facilities too, occasionally TV with satellite is available at the
hotel, late closing and early opening.
Must have at least one from CSD, packed juices or cigarettes
EATERY

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Shop may or may not be selling juices, cold drinks, milk shakes
traditional hand made mixed lemonade/orangeade or tea, this outlet
type may include PCO’s, and Tea Stalls handling at least one item from
Cigarettes, packed juices and CSD. Occasionally seating area provided in
case of fresh juice, milk shake selling outlets.
CORNER STORE

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Outlets with main business of Pan/Cigarettes or Niswar/Cigarettes. Small
selling area, Besides Pan/Cigarettes, confectionary items (biscuits,
candies, chewing gums, chips etc.), cold drinks are also available
PAN SHOP

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The minimum selling area should be above 900sqft. Food category
handling should be equal to or above 25 types, over all Food category
handling should be equal to 65 or above.
TOP END RETAIL (TER)
Defining parameters for
TER
Criterion
Minimum Selling Area
900 sq. ft or
more
Food Category Handling 25 or above
General / Drug Category
Handling
25 or above
Overall Product
Category Handling
65 or above
Sample Cities Key 10 cities

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3
CHECKS ON DATA COLLECTION TEAMS
14% of panel outlets are targeted to be checked with the following controls
2% of stores 6% of stores 6% of stores
Back ChecksSpot ChecksAccompaniments
DURING FIELD POST FIELD
Supervisor
Auditor
Supervisor accompanies
the Auditor
Supervisor
Surprise visit by the
Supervisor
Auditor
Filled
Questionnaire by
the auditor
Supervisor
Questionnaires checked

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FACTS
Standard facts, Derived facts & Price Facts
Standard Facts Derived Facts Price Facts
• Volume
• Value
• Stocks
• Reserved stocks
• Forward Stock
• Stock cover days
• Numeric Handling
• Weighted Handling
• Price Per Item
• Price Per Unit
• Value Share
• Volume Share
• Share in Shop
Handling

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SALES VOLUME (OFF TAKE ONLY)
Sales of products expressed in units, e.g. liters, sticks, tons etc.
Shows a trend in terms of specified units of sales for a given time period.
Shows the volume of sales expressed in one uniform unit
Opening
Stock
Purchases
Closing
Stock
Sales
Volume
Sales
Offtake
A Customer buying Pepsi (Sales offtake)

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PRICE
E.g. Price per Unit for the
Pepsi Can would be
(45 X 1000)/330
Rs. 136/Liter
PRICE PER UNIT
E.g. Price per Item for a can
of Pepsi would be Rs 45
PRICE PER ITEM
Average consumer price
converted to the standard unit
of measure
Average consumer price per
sales pack of the article

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SALES VALUE
Sales value is simply the sales volume multiplied by the price per unit
SALES
VALUE
Sales volume
of SKU
Retail
Price
SALES
VALUE
1110 units PKR 45
SALES
VALUE
PKR 49,950
Consumer
Price
Pepsi
Can

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VOLUME SHARE
Volume share is expressed as a percentage of the sales of product ‘X’ to the total
category
It can also be named as ‘market share’
Volume share is calculated as follows:
Volume sales of PEPSI CAN
Volume sales of total Category (CSD)
100

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Value sales of PEPSI CAN
VALUE SHARE
Value sales of Total Category (CSD)
100
Value (Rs.) sales expressed as a percentage of total category value

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DISTRIBUTION FACTS
Handling – Product availability
Distribution Facts
Numeric & Weighted
Handling (%)
Numeric & Weighted
Out of Stock (%)
• Numeric Handling
• Number of stores handling
the product (%)
• Weighted Handling
• Category Sales Importance
of the stores where the
product is being handled
• Numeric Out of Stock
• Number of stores which
were out of stock at the time
of audit
• Weighted Out of Stock
• % of Category sales of the
stores handling the product
that were out of stock

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NUMERIC HANDLING
Tells us the percentage of outlets in the ‘universe’ handling the product
Numeric handling is calculated as follows:
Universe includes other outlets that have the potential to sell product ‘X’
Number of stores selling product ‘X’
Number of stores in the universe
100

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NUMERIC HANDLING – AN ILLUSTRATION
Assuming there are 10 stores in the universe
And you are being handled at 6 out of 10 stores
What is the numeric handling of Pepsi?
Shop 3 Shop 4Shop 2Shop 1 Shop 7Shop 6Shop 5
Shop 10Shop 9Shop 8
60%

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WEIGHTED HANDLING
Based on the category sales volume
This is the percentage of product category sales volume accounted for by outlets
handling the product
Tells us how efficiently the product is distributed in the universe
Total Sales for the Outlets Handling Pepsi Can
Total Sales for Outlets Handling the Category
100

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WEIGHTED HANDLING – AN ILLUSTRATION
Assuming there are only 10 stores in the universe
What is the weighted handling of Pepsi?
Shop 1
80%
10050100200 50 100 50 200 100 50
Shop 2 Shop 3 Shop 4 Shop 5 Shop 6 Shop 7 Shop 8 Shop 9 Shop 10
800 units
1000 units
100
Sales for Outlets Handling Pepsi Can
Category sales for outlets Handling the Category
Units

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NUMERIC VS. WEIGHTED HANDLING
Product
Numeric Handling
Weighted Handling
Shop 3 Shop 4Shop 2Shop 1 Shop 5
200 100 50 50 100
80 %
60 %Out of the Universe
Out of the Category
Product sales
(Units)

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VOLUME SHARE – AN ILLUSTRATION
Shop 3 Shop 4Shop 2Shop 1 Shop 6Shop 5
350 350 400 400
Product
sales
Category
sales 300 250 550 500 500 600
= 1500
= 2700
1500 units
2700 units
100 56 %

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FORWARD STOCK SHARE
Stock that is ready to be consumed, and expressed as a percentage of the ready to use stock of the total
category
In case of CSD, stock in the refrigerators is referred to as forward stock
Forward stock share is calculated as follows:
Forward stock of Pepsi Cans
Forward stock of CSD
100

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FORWARD STOCK SHARE – AN ILLUSTRATION
Shop 3 Shop 4Shop 2Shop 1 Shop 6Shop 5
Forward stock
units (Product)
Forward Stock
units (Category) 300
= 1300 units
= 2300 units
1300 units
2300 units
100
57 %
250 300 550 400 500
200 400 300 400

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MARKET SHARE VS SHARE IN SHOP HANDLING
Market Share Share in Shop Handling
Market Share is calculated on total
CATEGORY handlers
SISH is calculated on total
PEPSI handlers
Pepsi Handler +
Other CSD brands
CSD Brands
Pepsi Non Handler
Pepsi Exclusive
Handler
Pepsi Handler +
Other CSD brands
Pepsi Exclusive
Handler
CSD Brands
Pepsi Non Handler

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WHAT IF THE SISH IS HIGHER THAN MARKET SHARE
66.7%SISH
50%Market Share
Strong SISH means good consumer
traction
Increasing Distribution would be the KEY in such situation

60
MARKET SHARE VS SHARE IN SHOP HANDLING
PEP volumes = 50 units
100
50
CSD volumes = 100 units 100
50
100
50
100
0
100
100
0
Market Share Share in Shop Handling
200 units
400 units
100 50%
200 units
300 units
100 66.7%
SISH only accounts for the Handler Outlets of the Brand Pepsi

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SHARE IN SHOP HANDLING (SISH)
Share of a product in the stores that handle the product
450
200
100
400
100
300
200
CSD volumes = 250units
200
0
200
0
Total Category volumes = 2300 units
(within Pepsi Handlers)
Total Pepsi volumes = 1050 units
SISH = 46 %
Total overall Category volumes = 2650 units
Total overall Pepsi volumes = 1050 units
PEP - Vol. Share = 40 %

62
80 80 80 80 80 80
370 390 400
450
500 510
0
20
40
60
80
100
120
140
160
180
200
0
100
200
300
400
500
600
Jan Feb Mar Apr May June
80 80 80 80 80 80
510 500
450
400 390 370
0
20
40
60
80
100
120
140
160
180
200
0
100
200
300
400
500
600
Jan Feb Mar Apr May June
With stable Weighted Handling, sales
volume is increasing  increase in
consumer off-take per weighted outlet
With stable Weighted Handling, sales
volume is dropping  decrease in
consumer off-take per weighted outlet
0
1
2
3
4
5
6
7
0
1
2
3
4
5
6
7
Sales Volume
Weighted Distribution
SPPD
Consumer off-take per
weighted outlet is a proxy
for consumer pull
SALES PER POINT OF DISTRIBUTION

63
SALES PER POINT OF DISTRIBUTION
e.g 1 Period 1 Period 2 Period 3 Period 4 Period 5
WD 70 75 80 85 90
Volume 10000 10000 10000 10000 10000
SPPD 143 133 125 118 111
Sales Volume
Weighted Distribution
SPPD
SPPD is a proxy for
consumer pull by
representing the sales per
unit of weighted reach.

64
DISTRIBUTION OPPORTUNITY
Outlet
Reach
Market
Universe
Numeric
Distribution
8,500
7,500 8,000
6,500
1,000 500 2,000
Mountain Dew 7-Up Pepsi Mirinda
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Outlet
Reach
Universe ND
Outlet
Reach
Mountain
Dew
10000 85 8500
7-Up 10000 75 7500
Pepsi 10000 80 8000
Mirinda 10000 65 6500
100

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