TO A A MOVIE PUSHING THE BOUNDARIES OF MARKETING ROI Ram - PowerPoint PPT Presentation

FROM A SNAPSHOT TO A A MOVIE PUSHING THE BOUNDARIES OF MARKETING ROI Ram Krishnamurthy, Vittorio Raimondi, Patricio Pagani Classified - Internal use

AS A BUSINESS WE HA VE TO SET CLEAR FINANCIAL T ARGETS 20 September 2011 Classified - Internal use 2

AND, WE NEED TO TRANSLA TE OUR BUSINESS GOALS INTO MARKETING PLANS We expect market research studies to support marketing strategy Classified - Internal use 3

HOWEVER, MARKET RESEARCH STUDIES PROVIDE SNAPSHOTS. A T BEST THEY ARE A SERIES OF SNAPSHOTS LOOKING A T THE P AST , SIMILAR TO THE WA Y WE LOOK A T PHOTOS IN F AMIL Y ALBUMS. And when they look at the future they tend to be qualitative and unable to support decision making. Classified - Internal use 4

WE OFTEN RESEARCH CONSUMERS’ A TTITUDES AND BEHA VIOURS TO DEVELOP FORWARD LOOKING SEGMENT A TIONS Merging attitudes and behaviors allows us to provide a view on how current preferences may evolve Classified - Internal use 5

AL THOUGH INSIGHTFUL, SEGMENT A TIONS ALONE CANNOT ALLOW US TO DEVELOP QUANTIFIED VIEWS OF FUTURE SCENARIOS THEY ARE STILL A PICTURE – NOT A MOVIE Classified - Internal use 6

OUR APPROACH ENABLES US TO TRANSLA TE A SERIES OF FRAMES INTO A MOVIE, AND TO PLA Y THE MOVIE FORWARD MARKETERS CAN TEST AND REHEARSE AL TERNA TIVE MO VIES, OR GROWTH P A THWA Y S, TO ACHIEVE THEIR BUSINESS GOALS Classified - Internal use 7

TO BUILD Y OUR BRAND, Y OU NEED TO RECRUIT AND RET AIN CONSUMERS. TO ACHIEVE THIS, ALL Y OU NEED TO DO IS FOCUS ON THE FLOWS (IN & OUT) Classified - Internal use 8

Y OUR CONSUMER BASE IS LIKE A Brand Loyalists SYSTEM OF INTER- CONNECTED T ANKS The pipes represent conversion opportunities and risk of losing consumers. Non Brand Users Occasional Brand Users 1 Managers can influence the ‘pipes’, not the reservoirs Each ‘pipe’ may have a 2 different impact on the system Non Category Users 3 Your growth strategy depends on what pipes you focus on Classified - Internal use 9

MARKET RESEARCH CAN Brand Loyalists QUANTIFY THE SIZE OF THE PIPES 1 DYNAMIC MODELING WILL IDENTIFY THE Non Brand Users Occasional HIGH LEVERAGE Brand Users PIPES TO GROW THE BRAND 2 Non Category Users 2 1 ... Classified - Internal use 10

THIS WILL REVEAL GROWTH Brand Loyalists P A THWA YS, E.G.: Recruit from competitors Recruit from other categories Non Brand Users Occasional Brand Users Win transactions By demographics, by regions, etc. Non Category Users Classified - Internal use 11

THE FUNDAMENT AL CONCEPT APPLIES ACROSS INDUSTRIES IT IS ABOUT HOW • Latent patients • Non users Y OU DEFINE THE • Lapsed patients • Single product users • Severe patients • Multiple product users T ANKS • ... • ... ALLOWING TO • Penetrate latent market • Win new users REVEAL Y OUR • Improve compliance • Retain high value users • Share of new patients • Add multiple services GROWTH • .... • .... P A THWA YS Classified - Internal use 12 20 September 2011

WE HA VE APPLIED THE APPROACH TO COCA- COLA ’S CONSUMER TRACKING SURVEY The Coca- Cola’s Beverage Brand volume Barometer (B3) reaches 21% of the world’s population and covers 92% of the total volume of non-alcoholic beverages sold worldwide people Of the non-alcoholic beverage world volume Classified - Internal use

Case study; illustrative and disguised ALIGNING Y OUR MARKETING PLANS AGAINST KEY LEVERS & SEGMENTS Potency of flow rates Marketing plans (the ‘pipes’) Product Product Product 36% Package E.g., recruit consumers Package into the category Equipment 24% Event Product Campaign 16% Package Product 12% Equipment 12% Campaign 100% Key consumer targets #1 #3 #2 Classified - Internal use

FROM A GLOBAL HIGH Opportunity PERSPECTIVE, THIS HAS LED TO NEW WA YS TO CLUSTER HIGH HIGH OPPORTUNITY POTENTIAL MARKETS TO REVERSE CHURN DECLINE OR SUSTAIN Quantified brand risk and GROWTH opportunity across geographies LOW HIGH enables the identification of regional Risk Risk OPPORTUNITY HIGH RISK OF clusters TO STIMULATE POTENTIAL OR GROWTH CONTINUED DECLINE LOW Opportunity 20 September 2011 Classified - Internal use 15

Case study; illustrative and disguised MASSIVE IMPROVEMENT IN ROI FROM Market type 1 SCALING INITIA TIVES ACROSS REGIONS Market type 2 Market type 3 80% High Favorable Churn 70% 60% Frequency opportunity (% of current volumes) 50% 40% 30% 20% Low Unfavorable 10% Churn 0% 0% -10% -20% -30% -40% -50% -60% -70% -80% Frequency risk Size of bubble = Current Volume (% of current volumes) Classified - Internal use

CHALLENGE Static / Need Trends Strategic Match Research , Planning Programs Snapshots / tools, not just with Goals ? Rearview predictive data models SOLUTION Stocks Behavior System (Goals) and (Current Dynamics Reality) x Model + Flows (change Attitude Scenario through (Future Planning Tool marketing) Possibility) for Marketers Framework Segmentation APPLICA TIONS Market Marketing Ambition vs Clusters, Plans Reality Check Scalable accountable to drive Global to clear investment Initiatives volume decisions targets 20 September 2011 Classified - Internal use 17

BACK-UP: SUMMARY OF THE APPROACH Global consumer tracker Scenarios - movies Resource-based System Dynamic Connection points segmentation modeling Components Classified - Internal use

RECAP – BACK UP As marketers, we We turn to market The approach have the task to research for help, turns these translate future but studies are by frames into business goals nature grounded possible movies, into marketing on the past and enabling us to strategy can only deliver test alternative snapshots, or a growth pathways series of frames to meet goals Consumers’ Relative to your Marketers need to brand, change the level attitudinal and consumers can of the tanks, but behavioral data, be viewed as a can only powered by series of tanks influence the dynamic models, connected by pipes allows the pipes quantification of the high leverage pipes Coca-Cola has At the local level, This is not a applied this to its this has allowed forecasting or global tracker, the alignment of marketing mix revealing new marketing plans tool, but a regional clusters and quantified strategic for scalable opportunities approach to initiatives foresee and influence the future 20 September 2011 Classified - Internal use 19