1 insert client logo in master here copyright © 2002 acnielsen copyright 2005 acnielsen a vnu...

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Copyright © 2002 ACNielsenCopyright 2005 ACNielsen

a VNU business

Measuring Merchandising Effectiveness

ACNielsen Romania

October 2005


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Agenda

Defining the merchandising standards How can we determine the impact of

merchandising on sales? Location types – examples POPM types - examples Merchandising criteria – examples The best mix


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Defining Merchandising Standards How do I want my products to look like in the

stores?In standards definition/fine-tuning, several main areas should be covered:

In which area of the store do I want my products to be present? In Category Section In Main Traffic End of Isle At Check-Out Secondary Placement

What do I place? Products Products aided by POPM Other aids

How do we place? Merchandising criteria

And most important.......WITH WHAT RESULTS?.......or......WHAT IS THE MOST EFFECTIVE MERCHANDISING MIX FOR MYPORTFOLIO ?


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Within the multitude of messages in a store, the shopping experience is not always easy …

Through merchandising we can help our customers decide easier and better….

And hopefully to select OUR brand


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A successful merchandising program is a synergy of several factors

The Impact of the merchandising activities on the sales depends on a lot of factors:

Category type Store type The brand Quality of the aids Competitive activity Implementation quality Permanent review Other factors

The impact can be determined through: Past evaluation In store tests of new concepts


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How can we determine the impact of merchandising on sales?

How we analyse:1) First we analyse individual activities in terms of scope and impact on

sales: We compare the sales of the stores where a specific activity is present

with the average of all stores or with the stores not having that activity We have to bear in mind that the merchandising activities are generally

placed in the “good” shops. Thus the results per-se show higher impact due to the fact that these shops are by definition preferred stores for that brand.

Example: Product in Main Traffic Flow - 5% contribution Floor Display in category section - 6% Contribution

2) Then we analyse the interactions between these activities, resulting in a joined impact :

- Main Traffic Flow + Standing Display in category section - 5.5% contribution

This shows that adding up of the activities is not necessarily an additive process but a multiplicative process.

3) Finally we determine the combination of activities that delivers the highest impact (sales, share or impact on competition).


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Locations Types

Category section: where most products of a specific category are placed In main traffic: on (one of) the main route(s) from entry to exit End of Isle/end of gondola At Check-out Secondary placement: any other location in the store except of the above …….


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POPM TypesMost frequent POPM encountered in the stores:

Floor Display Shelf Display Poster Sticker Wobblers Shelf stopper Section marker Hanger Stripes Shelf display Shelf liner Shelf tray Shelf talkers Header board Counter display Window display Pyramid Money tray Leaflet tray ........


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Location and POPM ScopeIn how many stores my brand and its main competitor are in

Location Y and have POPM Z?Brand X and its competitor's penetration in Hyper/supers

(Numeric Distribution)

0%

10%

20%

30%

40%

Brand X

Its competitor


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What Activity has the highest impact ? How am I performing when...Eg. I have Shelf liners in the store and I am at Check-out ?

Brand X Merchandising in Hyper/supersImpact of different activities

0%

5%

10%

15%

20%

25%

Total Portfolio 23,7% 27,0% 32,4% 33,3% 30,2% 16,3% 28,9% 27,7%

Brand X 10,0% 10,6% 9,0% 18,0% 13,0% 6,0% 11,0% 19,0%

Avg. Sales 125 140 110 82 128 96 135 103

Competitor Brand 14,5% 11,0% 15,0% 9,0% 15,0% 18,0% 14,9% 10,0%

BaseFloor Stand

Obler Sh. LinerMain

TrafficCheck

OutCategory Section

Promotional price

Other correlations:

My total company share when I have...

My sales per shop when... (how important are these shops)

My competitor share when I have….


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How many POPMs should I place to obtain maximum impact but not waste money?

Brand X - Impact of No of POPMs on share

14%

10%

16%

20%

18%

0%

5%

10%

15%

20%

25%

Base No activity 1 POPM 2 POPMs 3 POPMs

HYPERS/SUPERS Brand X POPM Q Volume share


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Brand T (competitor of brand X) - Impact of No of POPMs on share

21,5

38,7

14,8

11,3

-

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

Base No POPM Type D (ofBrand X)

1 POPM D 2 POPMs D

How does my POPM impact my competitor brand ?


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What is the combined impact of activities (for me and my competitors)?

Brand Activity Brand X Brand T Brand Y

Floor stand 15,7% -4,1%

Floor stand (long term) -7,8%

Second placement 19,5%

Floor stand and 2nd pl. 21,2% -8,9%

Shelf stopper and floor st. 16,7%

Shelf display 6,2% -19,4%

Second placement -13,1%

Check-out -15,3%

Shelf stopper 11,1%

Shelf display 10,1%

Second placement -13,0%

Brand X

Brand T

Brand Y


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Merchandising Criteria

Most frequent criteria encountered in the stores:

Facings Brand block Beginning/end of section Eye level/ shelf no X Near product Y (own or competitor’s) Within segment Z Near category W Exclusive location At hand level Product order Coupons Coupon/promo/demo ladies Product sampling Long term appearance in the leaflet ...


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Brand X - Standards Impact on Share

9%

11% 10%

13%

16%

7%8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

BASE EYE LEVEL PRICEVISIBLE

BRANDBLOC

MORE THAN30%

FACINGS

NEXT TOCATEGORY

W

BEGINNINGOF SECTION

What Criterion has the highest impact ?How am I performing when...

Eg. My products are displayed in Brand Block in channel ABC?


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Brand X - Impact of No of Facings

10%

6%

19%

14%

10%

0%

5%

10%

15%

20%

25%

BASE LESS THAN 07FACINGS

07-10 FACINGS 10-14 FACINGS MORE THAN 15FACINGS

What Criterion/Level of criterion has the highest impact ?How am I performing when...

Eg. I have less than 7 facings in channel ABC?


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For example, Brand X In Hyper/supers the optimal merchandising mix includes:

In Category section: Floor Display (2 stands) Shelf Liner min 10 facings placed in brand block at eye level and next

to key competitor, price communicated

paired with a Second Placement in Main Traffic. The impact range is: 8.9% to 18.9% more volumes, depending on

the store size and competitive activity On main competitor the impact is – 5% to – 8.9% less volumes

At the end of the analysis, the most effective standard for a specific channel is determined (based on past

record)


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Thank you for your attention!

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