Segmented commercial offer in modern channel

IMPACT

Sales increase of 15% and profit improvement of 20%, due to a segmented price and promotional strategy with key accounts and improvement in execution at point of sale.

THE ISSUE

In a stagnant market, distribution brands grew their share of the modern channel. Standardized negotiation with customers led to insufficient portfolio adaptation to outlet characteristics and an inefficient use of resources. Lack of shopper insights limited the accuracy of promotional activities and package strategy. Additionally, execution standards were difficult to supervise; consequently, retailer fulfillment of terms and agreements was not guaranteed.

APPROACH

Work was conducted along three main lines: at retailer headquarters, to adapt the negotiation and commercial offer to their own idiosyncratic model; at outlet level, to guarantee execution excellence and compliance with agreements; and at shopper level, to understand purchasing occasions, role of brands and packages, and price elasticity. Specific conjoint analysis by purchasing occasion was conducted.

OUTCOME

Pictures of success by key account and store type were established, including promotional activity, point of sale material, and technical equipment; price and terms and conditions with each key account were redefined, following a segmented approach by purchasing occasion, aligned with shopper needs and brand/package role. In parallel, the route to market was adapted in terms of size and skills to ensure target execution standards.

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