1 - Shopper Marketing Manifesto Milan

The Movement for Shelf Savvy Marketing
Capturing the value of our brands by converting shoppers into buyers
Global Shopper Development

Converting Shoppers into Buyers
CONFIDENTIAL
why
should we evolve?
what
The Movement for
how
Shelf Savvy Marketing
CONFIDENTIAL
An expandable beverage market
6+ x 2+
billion people
liters per day
x 365
CONFIDENTIAL
days a year
A world of growth ahead

NARTD Value Growth (08-20)
+5%
Volume Growth: 4.5% Global Shopper Development
CONFIDENTIAL
More beverage fragmentation

Projected NARTD Volume Growth: 2008 -2020
Growth
KO Share
Sparkling Stills
18% 82%
50% 7%

CONFIDENTIAL
Source: KO Global Strategic Planning 5
Changing channel landscape

16,595
+10.3% CAGR in Developing Supermarkets
12,252
+7.1% CAGR in Developing Independent Stores
9,598
4,124
4,315
KO Share Position
16%
23%
33%
12%
24%
Source: Inform Volume, Share, 2020 Vision Growth Estimates, Euromonitor Channel Distribution
CONFIDENTIAL
More retail competition

Increasing competitive intensity amongst Big Box retailers Rapid Expansion to build scale in new businesses
Developing Market
Retail Edition

CONFIDENTIAL
Resulting in more
Stores Formats Products

CONFIDENTIAL
Household dynamics are changing

1965 Today

2.5
hours making dinner
CONFIDENTIAL
minutes making dinner
12
9
Driving more occasion based shopping trips

Pantry Stock Up Fill-In Occasion Based
17%
of trips
More Price Sensitive Global Shopper Development
26%
of trips
CONFIDENTIAL
57%
of trips
Less Price Sensitive
Sources: Kraft Capturing Consumer Passion for Food at Retail 10
with smaller baskets

More of these Less of these
$20, 20 minutes, twice a week

CONFIDENTIAL
$200, 2 hours, every 2 weeks
11
and low basket penetration

Category Incidence by Mission Tesco Pilot Markets

CONFIDENTIAL
12
Most shoppers arent coming to us
28%
only of shoppers visit the beverage aisle
CONFIDENTIAL
13
and theyre making decisions in store
59%

CONFIDENTIAL
14
Todays shopper needs convenient solutions

Not Just Ingredients A Solution for every occasion

CONFIDENTIAL
15
Based in data
powered by
What is being purchased

CONFIDENTIAL
Who is purchasing it ... When, Where, and with What

16
and shopper truth

SAY DO

CONFIDENTIAL
17
Our opportunity:
Capture value in addition to love
34%
NARTD Value Share
CONFIDENTIAL
NARTD Preference Share

18
43%
MIT
M o n t e n e g r o 2 0 1 2
MIT
POKRENIMO LJETO
CONFIDENTIAL
We Must Inspire People To
buy into
our brands
CONFIDENTIAL

Converting Shoppers into Buyers 20
And More Importantly To
our brands
CONFIDENTIAL
21
We have a marked difference in our ability to capture profit from the market
2009 Profit Capture by Market
(System OI as percentage of national GDP)
China
India
Columbia
Brazil
Turkey
Mexico
Italy Russia France Great Britain Thailand Australia Nigeria
Argentina Chile
South Africa
Germany Japan Canada
Spain
United States
Philippines

CONFIDENTIAL
22
High performance is driven by an integrated system approach

Consumer Agenda Shopper Agenda
open happiness
Customer Agenda
Commercial Agenda

CONFIDENTIAL
Value creation for stakeholders
Shoppers
Converting Shoppers Into Buyers
Consumers
Creating Brands People Love
Activation
Collaborating for Value
Customers
CONFIDENTIAL
24
A great brand
Shoppers
Consumers
Brands
Customers

CONFIDENTIAL
25
An inspiring creative expression
Shoppers
Consumers
Brands
Customers
Creating Brands People Love

CONFIDENTIAL
26
Multiple formats, price points, and on-going services
Shoppers
Consumers
Brands
Customers

CONFIDENTIAL
27
Shoppable retail environments
Shoppers
Consumers
Brands
Customers

CONFIDENTIAL
28
Motivated retail partners
Shoppers Shoppers
Consumers
Brands
Customers

CONFIDENTIAL
29
Shelf Savvy marketing
Shoppers Brands
Consumers
Customers
designs with the end in mind

CONFIDENTIAL
30
Shelf Savvy marketing
Value
fuses inspiring ideas Brands with commercial discipline
Love

CONFIDENTIAL
to create value
31
Love
Design Brand Communication
Value
Portfolio Merchandising Retail Partnership
Tom Ford
CONFIDENTIAL
Domenico De Sole
32
Shelf Savvy Marketing fuses

Consumer Agenda Commercial Agenda
What we sell
CONFIDENTIAL
Where, When, How we sell
33
why what
The Movement for
how
do we make it happen?
Shelf Savvy Marketing
CONFIDENTIAL
34
we believe
(shelf savvy) marketing converts
shoppers into buyers,

shelf
CONFIDENTIAL
transforming insight into value at the
35
A tale of two shoppers

Maria
CONFIDENTIAL
Mike
36
Both have families at home

CONFIDENTIAL
37
Both watch the their favorite shows

CONFIDENTIAL
38
Both are motivated when they shop

CONFIDENTIAL
39
Both go to the same store
Maria
but see different things

Mike
CONFIDENTIAL
40
Both interact with our brand

CONFIDENTIAL
41
Both spend about the same for a Coke

but get different experiences

CONFIDENTIAL
42
Both create value
price
price
Maria
Mike
volume
volume

but with different economics

CONFIDENTIAL
43
We can optimize their experience in four steps

Commercializing with Customers
Differentiating Brand / Pack Strategy
Picture of Success
Activating for Retail Impact
Prioritizing Shopper Opportunities

CONFIDENTIAL
44
Defining the profit pools
Commercializing with Customers Activating for Retail Impact
Picture of Success
What is the business opportunity? How can we best create system value? Who is the Shopper? How can we best Influence purchase behavior?

CONFIDENTIAL
45
Bringing value to our customers
Picture of Success
How can we ensure that the customer is at the heart of all our plans? How can we leverage shopper insights to drive value for our customers?

CONFIDENTIAL
How can we partner with customers to step change category value creation?
46
Creating a differentiated offer
Picture of Success
What are the critical channels and occasions? What are the roles of the brands and packs? How do we capture value from unique occasions? How do we differentiate across channels?

CONFIDENTIAL
47
Prompting behavior at retail
Picture of Success
Where will displays best prompt purchase? How can we merchandise to best create off-take? How can we communicate to influence behavior? What promotional activities will create value?

CONFIDENTIAL
48
Measuring our progress

price price volume

volume
Picture of Success
Are we converting brand preference into share? Are we growing revenue ahead of volume? Are we penetrating households with a routine purchase habit?

CONFIDENTIAL
49
For each element, transforming Insight into Action

CONFIDENTIAL
50
Integrating the parts to define a picture of success

Commercializing with Customers
Picture of Success
Activating for Retail Impact

CONFIDENTIAL
51

1 - Shopper Marketing Manifesto Milan

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The Movement for Shelf Savvy Marketing

Capturing the value of our brands by converting shoppers into buyers

Global Shopper Development

The Movement for

Shelf Savvy Marketing

An expandable beverage market

liters per day

A world of growth ahead

More beverage fragmentation

Global Shopper Development

Source: KO Global Strategic Planning 5

Changing channel landscape

+10.3% CAGR in Developing Supermarkets

+7.1% CAGR in Developing Independent Stores

More retail competition

Global Shopper Development

Global Shopper Development

Household dynamics are changing

Global Shopper Development

minutes making dinner

Driving more occasion based shopping trips

with smaller baskets

$20, 20 minutes, twice a week

$200, 2 hours, every 2 weeks

and low basket penetration

Global Shopper Development

Most shoppers arent coming to us

and theyre making decisions in store

Global Shopper Development

Todays shopper needs convenient solutions

Global Shopper Development

What is being purchased

Global Shopper Development

Who is purchasing it ... When, Where, and with What

and shopper truth

Global Shopper Development

Capture value in addition to love

Global Shopper Development

Converting Shoppers into Buyers

NARTD Preference Share

We Must Inspire People To

Global Shopper Development

And More Importantly To

Italy Russia France Great Britain Thailand Australia Nigeria

Germany Japan Canada

Global Shopper Development

High performance is driven by an integrated system approach

Global Shopper Development

Value creation for stakeholders

Converting Shoppers Into Buyers

Collaborating for Value

Global Shopper Development

An inspiring creative expression

Creating Brands People Love

Global Shopper Development

Multiple formats, price points, and on-going services

Converting Shoppers into Buyers

Global Shopper Development

Shoppable retail environments

Collaborating for Value

Global Shopper Development

Motivated retail partners

Collaborating for Value