Differentiate or die: shopper-driven solutions Today’s winning retailers find new ways to connect with shoppers. With insights and expertise, FMCG partners play a key role. Whitbread uses brand marketing to deliver retail propositions while Kesko transforms the shopping experience through segmentation techniques. Carrefour Italy and Coca-Cola share their latest insights on shopper missions. Unilever and Shoprite target families through innovative media. Speakers: Vicki Belcher, Bob James, Oxford Strategic Marketing; Adele Whitehorn, Unilever; respresentatives of Carrefour Italy, Coca-Cola Italy, Kesko, Shoprite. Facilitated by Oxford Strategic Marketing.

1. Differentiate or Die:
© Oxford Strategic Marketing 2008
Shopper Driven Solutions

2. Purpose of session
In today’s competitive marketplace, successful
retailers and suppliers work together to segment
shoppers and deliver clear, unique propositions in
store.
Why do retailers need to differentiate?
How do retailers differentiate?
What are the implications for manufacturers?
© Oxford Strategic Marketing 2008 1

3. Why do retailers
need to
differentiate?
US sub-prime
Retailers are chasing a crash
finite amount of
consumer spending
In developed markets, Top 12 EU retailers will have
retailer consolidation is c.60% share by 2010
intensifying retailer
brand share battle
© Oxford Strategic Marketing 2008 2

4. Why do retailers
need to
differentiate?
Shoppers use a Typical store loyalty is 26%
portfolio of stores
73% of shoppers use
5+ channels
In-store is a powerful Up to 70% of purchasing
and necessary decisions are made in-store
branding opportunity
Each week twice as many
Vs
people in UK visit Tesco as
watch primetime ad breaks
© Oxford Strategic Marketing 2008 3

5. How do retailers
differentiate?
Using strategic skills the same ways as brands . . .
Segmentation Insight
Proposition Joint Strategies
© Oxford Strategic Marketing 2008 4

6. How do retailers
differentiate?
. . . and by translating these strategies into
differentiated solutions via shopper touchpoints
Environment Product
People & Services Communication
© Oxford Strategic Marketing 2008 5

7. How do retailers
differentiate? Touchpoint Examples
Environment Product
A real “wow” factor – premium, energetic &
dynamic 1st Price Artisanal
Organic Gourmet
Film set style lighting and glamour
Shop-in-shop – El Corte Ingles,
cues
© Oxford Strategic Marketing 2008 6

8. How do retailers
differentiate? Touchpoint Examples
People & Services Communication
Clubcard
Cheese counter
Promotions
Master butcher Special
interest clubs
Wine expert
© Oxford Strategic Marketing 2008 7

9. What are the
implications for
manufacturers?
Upgrading the Customer Marketing role
Brand and Customer marketing co-creation of
commercial strategies and plans - requiring new
processes, skills and ways of working
Continuing to create systems to generate and
apply shopper insight
Improve strategic marketing techniques to
achieve mutually beneficial in-store differentiation
© Oxford Strategic Marketing 2008 8

10. How will this
session help?
This session demonstrates the sophisticated
brand marketing techniques used to target
shoppers with unique differentiated
propositions
Result: joint sustained value for . . .
Shopper Retailer Supplier
9
© Oxford Strategic Marketing 2008

11. Agenda
Strategic retailer Bob James –
differentiation Oxford Strategic Marketing
Differentiation through Janne Anttila – Analyse2
shopper segmentation Maija Mustonen - Kesko
Turning shoppers into
Detlef Koch – L’Oréal
buyers
Duarte Fragoso - Sonae
Joint Oral Care Plan
Joao Miranda – Colgate
Key Success Factors Kay Boycott –
for Differentiation Oxford Strategic Marketing
© Oxford Strategic Marketing 2008

12. Strategic brand
differentiation in retail
- and its impact on suppliers
© OxfordStrategic Marketing 2008
© Oxford
Strategic Marketing 2008

13. Key points
• Complexity of retailer differentiation
• Need for new brand model – FMCG models don’t work
• Need to cascade brand strategy into day to day
operational guidance
• Customer-noticeable impact demands fewer, bigger
bundles of activity co-ordinated across touchpoints
© Oxford Strategic Marketing 2008

14. Hospitality retailing – same
scale of challenges as many
product retailers
10 million
monthly customers
67,000
employees
Leading European
Hospitality Retailer 19,000
outlets
© Oxford Strategic Marketing 2008 2

15. Whitbread wanted stronger
Brand differentiation across
all its business sectors
© Oxford Strategic Marketing 2008 3

16. Costa Coffee
We will focus on Costa Coffee as:
• Global retailer – Europe, Middle East,
India, China
• Like grocery, competes on product sales,
service, instore environment and location
Core format is High Street but format &
estate segmentation are key to expansion
• Aggressive brand-literate global competitor
© Oxford Strategic Marketing 2008 4

17. Retailer branding is different
from FMCG
External Internal
Highly intangible needs
Maximise capacity
e.g. “people like me”,
utilisation of asset
atmosphere, etc
Desired brand experience
Manage wide range of
varies by mission and
“in-use” touchpoints
mode of use
Customer mental and
Operationally-led
physical state can vary
organisations and cultures
within single visit
© Oxford Strategic Marketing 2008

18. 3 critical tools were used to
address the challenges of
managing a retailer as a
brand
Touchpoint
Brand House Brand Staircase
Guidelines
Shopper Insight – a Journey Mapping
critical component required to define
of the Insight Packs Touchpoints
Sequenced
shopper-noticeable
brand-building
initiatives
© Oxford Strategic Marketing 2008 6

19. Costa’s Brand House
ITIAL
NT AL
INFIDEN
F DE
CO N
CO
© Oxford Strategic Marketing 2008

20. Brand House
Illustrative example
Feel special
BRAND PROMISE
Entertaining Live life to the full
PERSONALITY & Stylish Treat people as individuals
VALUES Informal Don’t rely on tradition
Friendly Give good value
Visiting friends & relations in North America
OCCASION Business trip to East Coast via New York Short break holidays to New York
(+2 week trip)
Couples 45-65, cost conscious, not one of Executives, 35-55. Make my own choices. Couples 25-45. Metropolitan. Work hard.
CUSTOMER the crowd. Spend to enjoy life.
Style conscious.
Direct: BA World Traveller Direct: BA First Class Direct: BA Business
COMPETITOR Secondary: US Airlines Economy Secondary: US Airlines 1st Class Secondary: US Airlines Business Class
INSIGHT “Even though we want great value, we don’t “I need a hassle free trip from end to end, and “We have earned our holiday, so the fun has to
want to feel like we’re in cattle class.” to be recognised as an individual” start the moment we get to the airport”.
Great value without being just another name, Pampered from start to finish, and so feel The best fun in the sky, and so really enjoy
BENEFIT
and so feel special. really special. self.
More stewardesses. Greater range of films Door to door care. Hostesses (who are a cut
WHY THEY’LL and games. above the rest) at beck and call. Fantastic
Fun loving staff. Responsive service. Great
BELIEVE US entertainment.
Prices 10% cheaper than BA facilities.
No-one gives such individual treatment and No-one gives such individual treatment and so
DISCRIMINATOR facilities at this price. makes you feel so special.
No better entertainment on a flight.
Note: fictitious example
© Oxford Strategic Marketing 2008

21. How do Touchpoint Guidelines
fit into Whitbread’s
management toolkit?
1. Enduring strategic definition of
the brand
2. Enduring strategic guideline to shape
the thinking behind executional plans
C ore Oc ca sion S uppo rt Oc ca sion Sup port O cc as ion
En viron me nt
S OME TO UC HP OINTS S TR E TCH ACR OS S CO RE &
ALL O THE R S UP P OR T O CC AS ION S
Pe ople & Se rvice
SO ME TO UCH P OIN TS S TR ET CH ACRO S S CO RE & SE LE C TE D S U PP O RT OCC AS IO NS
Produ cts
S O ME TOU CH PO IN TS ARE SP E CIFIC TO TH E C ORE OCC AS IO N ONL Y
Com mu nic ations
3. Executional definitions which may
need revisions and upgrades
S OME TO UC HP OINTS AR E S PE C IFC TO A S UP P OR T O CC AS ION O NL Y
Bridging
strategy into
operational Operational Standards
action
Brand Standards
© Oxford Strategic Marketing 2008

22. Customer journey mapping
was critical to defining
Touchpoint Guidelines
OXFORDSM ‘HEART MONITOR’
Example: Coffee Shop
An OxfordSM Tool to map the total customer experience and
identify: what matters most to customers; performance highs and lows;
and levers for solution hunting
Approach & Enter Choose & Queue Order, Sale, Pay Receive Settle at table Relax & Enjoy Readying to go!
Efficiency of Getting No smoke Parting
Great
Great Enviro to
take break Choice of pay process the extras People gesture
food like me
See a
table
Quality
deliverable Music
Team buzz Taste
Know what interaction Make product
to do drink
External
appearance Toilet
Customer
experience Customer Journey
Visuals of
food/ pricing
Accessible
Poor
Poor Space
available Specials Appropriate Moment of truth
Levers for Solution Hunting
Environment
People & Service
Products
Communications
NB. Populated with fictitious data for illustration only
© Oxford Strategic Marketing 2008

23. Touchpoint action was then
aggregated and prioritised across
occasions to create major
noticeable initiatives It’s not Costa unless...
Core Occasion Support Occasion Support Occasion
Environment
SOME TGs STRETCH ACROSS CORE &
ALL OTHER SUPPORT OCCASIONS
• Challenge for retailer
People & Service
SOME TGs STRETCH ACROSS CORE &
SELECTED SUPPORT OCCASIONS
brand builders is not to Products
SOME TGs ARE
SPECIFIC TO THE CORE
dissipate activity and
OCCASION ONLY
Comms SOME TGs ARE
SPECIFIC TO
investment across so ONLY ONE
SUPPORT
OCCASION
many individual Symbolic Momentum Builders Priority Quick Wins
touchpoints WAVE 1
• These then become
DO-ABILITY
WAVE 2
Lower Priority Action Priority Challenges
invisible to the shopper WAVE 3
Low
Low High
IMPACT
© Oxford Strategic Marketing 2008

24. Brand Staircase combines
short term Touchpoint action
with more radical initiatives
Brand Ambition
Brand Ambition
Innovation A: Bundled Vision
Touchpoints
Bundled
for New
Touchpoints
Occasion
→ Key Measures to
Innovation B: quantify the long
term brand
Bundled development
→ Develop
Existing Touchpoints
objective
competence in
Touchpoint new area
Improvement
→ Extend consumer
perception on key
driver
START
START
→ Address major → Attract new
consumer consumer group
negative
→ Current situation
→ Differentiate
Touchpoint
© Oxford Strategic Marketing 2008

25. Costa’s Brand Staircase
combined short and longer
term change
Brand Ambition
Brand Ambition
→ Winning customers loyalty
by delivering the Best
Coffee Moments
Pre-pay card
Frescato
Store design and Support grower communities
merchandising
START
START → No need to waste time
queuing to pay when
Costa Book Awards you’re rushing to work.
Reduce walk-aways to
drive commuter
→ Reduce seasonality skew occasion revenue
to warm weather
Italian pannini snacks → Build awareness of
consumption via
summer Frescato launch Costa’s support for
grower communities
→ Improve store design → Increase loyalty and
Italian coffee cups and merchandising to dwell-time among core
increase authentic customers for pitstop
Italian atmosphere occasion through
→ New Italian designer association with relaxing
→ Improve food quality reading: renaming of
coffee cups consistent with Italian Whitbread book awards
authenticity
NB. For confidentiality, reconstructed from externally observable initiatives
© Oxford Strategic Marketing 2008

26. The Results: The
Process
“This isn’t airy fairy marketing. It will fire
up every person from Chief Executive to
front line”
John Derkach
Marketing
Managing Director Society
Costa Coffee Global Award
2005
(for marketing
capability)
For more information see the full case study at
www.oxfordsm.com
© Oxford Strategic Marketing 2008 14

27. The Results
Year One Year Three
“Customer noticeable relevant “Brand transformation and hike
improvements” in commercial performance”
“We now understand why the
Costa experience can hook 66% of surveyed customers
the guest and the role our would strongly recommend
coffee plays”
the brand –
Coffee Annual Report 2006/07
nirvana of
New Food Offer Advocacy!
Re-imaged stores +16% like for like growth in 2
years
external & internal
© Oxford Strategic Marketing 2008 15

28. Implications?
FMCG Supplier Implications
Retailer investment in Shopper insight investment;
shopper/customer insight increase research collaboration
Adoption of sophisticated brand Brand-literacy in customer roles
management techniques
“Brand” no longer a comms silo
– now driving operational Alignment of supplier brand and
decisions total portfolio with retailer brand
Strategic development of
retailer brand – crucial criteria Deep customer insight & open
for resource longer range strategic dialogues
(e.g. store fit, merchandising, estate formats, product
listings, staff role and training,etc)
© Oxford Strategic Marketing 2008 16

29. Differentiation
through
Advanced Shopper Segmentation
Maija Mustonen, Kesko Food Ltd
Janne Anttila, Analyse²

30. Agenda
Kesko’s Segmentation Challenge
Advanced Shopper Segmentation
Case Study : How Trend Segmentation Boosts
Promotions
Key Learning Points & Conclusion

31. Kesko in Brief
Kesko Food
Grocery trade
41%
Rautakesko
Building and home
improvement
27%
Finland VV-Auto
Car and spare parts
Norway 5.3m
St. Petersburg 8%
4.5m area 5m
Estonia 1.4m Anttila
Sweden Department store
trade
9m Latvia 2.3m 6%
Lithuania 3.4m Kesko Agro
Agricultural trade
Belarus Moscow 8%
9.8m area 15m
Other operating
Total approx. activities
10%
56 million consumers
Group’s total net sales €9,5 billion (2007)

32. : Vision & Goals
• Our Vision requires us to develop deep customer insight – this
helps us understand & anticipate customer expectations
• We use this insight to build the best shopping experience – we
are always looking for new ways to delight our customers

33. : Food Stores
How does this translate to our Food Stores?
Hypermarket. A versatile and competitively priced store for the
whole family. The selections include all food delicacies and
branded products for clothing, leisure time and home
Supermarket. A high quality food store. Motivated and skilled
staff at your service and a versatile selection of fresh quality
products always available
Convenience store. A store with a good selection of food. K-
markets are located in suburbs or rural centres
Small convenience store. Focuses on personal service
and, in addition to daily essentials, offers many extra
services

34. : Why we are interested in Advanced
Segmentation?
Know your customers, differentiate from competitors,
implement chain concepts
Kesko’s challenge in 2004:
Consumer studies, POS data and loyalty card programs are not sufficient
No direct linkage to strategy and day-to-day business decision-making
Target:
Everything has to be based on customer information
CUSTOMER
SUPPLIER

35. Analyse² in Brief
Specialized in customer segmentation methods
Leading consultant in consumer insight management
Advanced Segmentation tools, reporting and analysis systems
Over 30 retail and supplier customers
Long term collaboration with Kesko:
2004 2005 2006 2007 2008
Collaborative CM Processes
Market Next
Information &
information Segmentation Foodstyle steps
Services Advanced
Services ...
(CIS) Segmentation

36. Advanced Shopper Segmentation:
Case Kesko

37. Advanced Segmentation – Trend Segmentation
Products
Stores Consumers
Trends
Customer segments

38. The Benefits of Trend Segmentation
Strategic alignment
Trend segmentation
Chain concepts, target groups etc.
Analysis & Control
Customer programs, sales programs
Supplier Collaboration Processes
CRM
Product Portfolio Assortment Mgmt NPI
Brand Portfolio Space Management Promotions
R&D Pricing Marketing
Implementation

39. Supplier Collaboration Process
CRM
Product Portfolio Assortment Mgmt NPI
Brand Portfolio Space Management Promotions
R&D Pricing Marketing
New service launched to Kesko’s suppliers
Jointly agreed goals
Information, tools and scorecards are common for both Kesko
and suppliers
Different levels of collaboration

40. Case Study: How Trend Segmentation
Boosts Promotions

41. Advanced Promotion with Trend Segmentation
Background
Cannibalisation between Mammutti (Mammoth-
promotion) and sales
Totally new approach to promotion planning
Promotion target groups and tactics were selected based on
trend segmentation methods
• : price-oriented promotion with wide range of
product categories
• : target customers prefer value beyond price
Several suppliers in co-operation

42. Trend Segmentation in Action
Target group analysis
Measuring the results
Trend analyses in target groups
Category selection based on Trend segmentation
Matching products, target groups and trends
Selection of tactics based on the understanding of the target groups
Marketing message designed using target group and trend information
Trends involved in every phase

43. Price Recipes etc.

44. Case Study : Results
The promotions went live in stores in Feb-Mar 2008
Sales, total +19,1% +8,4%
Sales, meat +13,3% +19,7%
Target categories +150-200% +130-250%
# of customers/chain +14,0% +1,4%

45. Key Learning Points & Conclusion
Key promotions designed with the help of trend
segmentation do not cannibalize each other!
Explicitly defined target customer segments are
in a key role in focusing the promotions
Continuous implementation from chain strategy
into Category Management processes and
supplier collaboration

46. Key Learning Points & Conclusion
Differentiate or die!
Change the segmentation paradigm
Total change in mindset
From projects to processes
Commitment from strategic level
Change the collaboration in the value chain
Common language between retailer and suppliers
Innovative ways to add value to the consumer

47. Thank You!
Analyse² Kesko Food Ltd
Mr. Janne Anttila Ms. Maija Mustonen
CEO Sales Manager
janne.anttila@analyse2.com maija.mustonen@kesko.fi
www.analyse2.com www.kesko.fi
VISIT US AT STAND 15/5

48. L’Oréal: No. 1 in Beauty
100 years of expertise in cosmetics
17,1bn Euro consolidated sales turnover
19 global brands
560m Euro investment in Research & Development
60.851 Employees

49. L’Oréal: Distribution in all channels
Channels Brands
Professional
Food, Drug and Mass
Parfumeries
and department stores
Pharmacies
The Body Shop

50. Turning shoppers into buyers
Wednesday 28th May 2008
Detlef Koch
L’ORÉAL Germany

51. The Beauty Exception
Different consumption
behaviour 3100 Spending for all FMCG from category buyers
3050
Highly profitable
Spending in €
3000
category 2950 Ø
Above average 2900
spending for FMCG 2850
2800
2750
Colour Colorants Facial care
Cosmetics
Source: GfK Consumer Panel

52. Colorants
Very emotional
category
Quite complex
Very interesting for
retailers: above
average spending for
FMCG

53. Colorants: Quite a challenge
Development of the colorant market in %
difficult market in recent 0,4
years -0,7
1
-0,1
A strong decrease of -8,4
-8,9
2003 2004 2005 2006 2007
younger users Source: Nielsen Market Track
Hair colorant users
+12,1% +11,6%
+6,6% +6,2%
+1,9%
No demand anymore?
-21,5% -21,7%
18 - 24 25 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70 yrs+
yrs yrs yrs yrs yrs yrs
Source: GfK Consumer Panel 2008

54. Look outside one’s own territory
Consultancy
Professional application
certainty for consumers

55. Colorants at hairdressers
Coloration development
Overall, yearly spending in salon in %
in salon has increased …
+ 4,5
+ 4,7
2006 2007
…and the driver for this
growth is coloration
Source: GfK Hairdresser Panel

56. What does the mass market offer?
Hugh selection of colorants
Product diversity = complexity
(up to 500 items on shelf)
Lots of innovation
Limited product consultancy
in-store

57. Current situation at shelf: hugh potential
Percentage of buyers vs non buyers in
different distribution channels
30% non-buyers at shelf 31,6 32,5
27,6 26,3
40,4
Non-Buyers
mainly due to uncertainty
Buyers
72,4 73,7
68,4 67,5
59,6
Total Drug Client 1 Drug Client 2 Hyper Client 1 Hyper Client 2
Why did you not purchase today? (n=131)
Just wanted to gather information 44
Was not sure how to choose the right product 37
Get an idea of pricing 31
Get an impression of total range offered 30
The color I wanted to buy was not available 28
Did not find what I was looking for 28
Scared to make a long lasting decision 14
Could not decide 12
Needed counseling, but no one was around 12
Source: L‘Oréal Shopper Studies, 2006

58. Bringing hairdresser benefits into the shelf
The Colorants Advisor
Combating the main causes of non-purchase:
Reducing the level of uncertainty
Guidance in the selection process
Increase of category awareness
Focus on younger target group (Attracting
new, inexperience customers)
Consultation support for sales staff
Enhancing the category/image of
trade partner
Conversion of non-buyers into buyers
Sales-up-lift of the category

59. How does it work?
3 key questions to minimise purchase drop outs:
Question 1:
Given my current hair colour,
which colour would I be
able to achieve?
Colour recommendation
Question 2:
Finding your ideal coloration
Question 3:
How do I apply the coloration
correctly? Brand recommendation
Application film

60. Reduce Uncertainty by giving clear advice
Video demo of how to conduct
the Skin Allergy test
if hair is already coloured, no
lighter tone than the current
hair colour is possible
with high percentage of grey
hair, we recommend the use of a
permanent coloration

61. … and explaining complex products
Large box
-> Difficult application? Explication of key-
Application movies
benefits
Application in only
10 minutes
-> How does that work?
Classified as a level 2+ product
-> Explaining innovation

62. No roll-out without testing
Installation of terminals at retailers
6 months test
Evaluation of success via:
Click-Stream Analysis (via UMTS)
248 Shopper interviews at POS
Sales Monitoring vs. comparable shops

63. Findings: Terminal usage
ø 160 users per week/store
(increasing development)
More than 60% of these are Terminal users vs. non terminal users (248) in %
intensive users 39
41
terminal attracts first of all young 20
18
20
target groups and shoppers with 16 16
less experience in colouring at 9 8
10
home 2
0
-> recruiting new users for the -20 years 21 - 30 years 31 - 40 years 41 - 50 years 51 - 60 years 61 years +
category
Age of users
Terminal users Non-Terminal users
Source: POS interviews

64. Findings: Awareness, Usability & Usefulness
terminal arouses curiosity for the
category
nearly all users are completely 71%
satisfied with the usability Usefulness of given information
48 in % of users (120)
more than 70% stated that the
information provided was helpful 23
when searching for the right 15 14
product
very helpful helpful less helpful not a bit helpful
It is seen as an additional, helpful
tool in upgrading the shelf and
making purchase more
interesting
Source: POS interviews

65. Findings: Sales impact
110
106
105 104 104 104
103
100
Index
95
(Volume)
90
85
80
Total Manufacturer Manufacturer Manufacturer Manufacturer
1 2 3 4
Terminal clearly supported the sale of colorants, despite the fact that
some products needed to be removed to make place for the
terminal.
Source: retailer scanner data

66. To sum up the test results
The tool achieved its objectives and to some extent even exceeded
expectations:
very high acceptance
increase of category awareness
recruiting young and unexperienced users
reduction of the level of uncertainty
enhancement of the shelf
increase of sales in a difficult category

67. How can retailers differentiate today?
Competition through expertise and a great in-store experience
by
Looking outside one’s own territory
simply following panel data can be misleading
learnings from other channels help to recruit new users
Listening to the shopper and develop solutions that
serve relevant needs of consumers
are easy to use
are highly attractive for the intended target group
A win/win/win - Situation

68. Joint Oral Care Plan
&

69. CP & Sonae
Agenda
• Background
• Oral Care joint plan
• Business impact

70. Sonae Distribuição
May 2008
Investor Relations department
Tel: + 351 22 956 19 47
E-mail: investor.relations@modelocontinente.pt
www.sonaedistribuicao.com

71. Sonae Distribuição
Key facts
No.1 retailer 3,4 Bn€ *
in Portugal
Turnover
(215.000 articles in portfolio)
(with food and non food retail)b
~32.000 710.000
employees sqm sales area
(biggest private employer in
Portugal) (in 646 stores)
~3.500 ~2.800.000 *
suppliers sales receipts/week
* not considering the hypermarkets acquired to Carrefour (Portugal) by the end of 2007 2007 figures

72. Sonae Distribuição
Sonae world
SONAE SGPS
100%
Sonae Sonae Sonae Sonae
Sonaecom
Distribuição Sierra Capital Indústria
Food Retail Services
Shopping Centres Telecommunications Wood Based Products
Non Food Retail Tourism
Portugal Portugal Germany Portugal Portugal Portugal Brazil
Spain Italy France Spain Canada
Greece Brazil France S. Africa
Germany Switzerland
UK
Europe
Portugal
Germany
Sonae is Spain
France
present in 17 America U.K.
Ireland
countries Brazil
Canada
Italy
Greece
U.S.A.
around the
Netherlands
Romania
Poland
five continents
with around Asia
40,000 China
employees Oceania
Africa
Australia
South Africa

73. Sonae Distribuição
Major milestones
Strong
expansion in
Strong Portugal
expansion plan (organic growth
in Portugal and integration of
Carrefour
Consolidation Client focus hypermarkets)
of commercial initiatives and
Development Continuous
and economic promotional
into innovation
success of non innovation (value proposal
non food based food formats and promotional
formats in New non food activity)
Portugal Consolidation formats
Set up of the of the Brazilian New formats
New market operation Divestment of and concepts
category
investment in Brazilian
management New market
Brazil operation
model investment
Opening of the Logistic and Accelerated (Spain)
first information expansion
process in the Social
hypermarket in systems responsibility &
Portugal food area
Sales evolution
structure sustainable
(joint-venture
with Promodés)
development
1985 … 1990 … 1995 … 2000 … 2005 … 2008 …

74. Sonae Distribuição
Balanced portfolio
sports goods Mature
markets
Strong growth
businesses
Value creation (RoCE (1))
apparel consumer electronics
hypermarkets
mini-hypermarkets
DIY and garden computers and supermarkets
travel agencies
Options for the
future
kidswear
mobile communications
health areas
new businesses
Business development
Bubbles’ size represents relative dimension of sales
(1) EBIT/Net capital employed

75. Colgate-Palmolive
• Started trading in 1806 in US
• Selling products in 223 countries
• $14 Billion Sales, 35,000 Colgate People
• Worldwide Oral Care Leader

76. Colgate-Palmolive
• Consumer at the center of our strategy
• Understanding of users & shoppers
Using Shopping Buying
• Understanding of customers’ goals and
strategies
• Drive sustainable and mutually profitable growth

77. Background
Consider Oral Care a key category
Sonae OC : 32,8%
CP/Sonae OC : 46,2%
Very aggressive goals for the category
Strategic relationship
CATEGORY DEVELOPMENT WORKSHOP
Cross-functional off-site meeting with people from both
teams
Jan 2006 1st Edition - Jan 2008 2nd edition

78. Oral Care Development Workshop
Objectives
– Share Mid-term plans and initiatives
– Identify and select key opportunities for mutual growth
– Define strategies to address the opportunities
– Shortlist tactics and agree a plan of action

79. Oral Care Development Workshop
Review past years activities (what worked well / things
to improve)
Brainstorm identification of key opportunities
Breakouts sessions to address the opportunities
Medium term strategies and actions + Quick Wins

80. Oral Care Development Workshop
Outcome:
Strategic initiatives:
– Develop OC in MODELO S Hypers & Supers
– Education & Training
– Develop Kids Segment
– Develop Oral Care system
– Relaunch Oral Care Fair / OHM
– Shared Scorecard
Action Plan signed-off by top management

81. Oral Care Development Workshop
Sonae shopper
Oral Care involved, seeking superior Oral Care
shopping experience
Regards Sonae as most trusted brand among retailers
Families with kids
Higher penetration than average in high end
consumers
Multichannel profile shopper: Urban in Hypers Small
town and inland in Supers

82. EXECUTION
Some tailor made activities implemented in
Sonae’s stores
Oral Care University
Oral Health Month
Replace toothbrush campaigns
Kids Event

83. Colgate Oral Care University
Oral Care training for Sonae’s Store Personnel
Content
1. Importance of Oral Care Category
2. The tooth anatomy
3. Oral Problems -> DVD
4. Golden rules for a proper oral hygiene
5. Oral Care Category
6. Frequently asked questions

84. Colgate Oral Care University
March 2007: Train the Trainer
CP gave training to Sonae’s Trainers Group.
April 2007: Roll-out
Sonae Trainers delivered Oral Care training to all
Store Personnel that work in Health & Beauty section
(more than 200 people)

85. Oral Health Month
Secondary space dedicated to the Fair
Educational content: Hygienists and Kids dental
schools
Partnership with Dentists and communication via
Media (Colgate) and Sonae Magazine

86. Oral Health Month - Results
Sonae Share uplift:+3pp
Colgate at Sonae stable (thus gaining Market Share)
Children participation 2007: 3500, +840 vs 2006
Oral Care SOM trend Sonae - 2º half 2007
70,00
60,00
50,00
40,00
30,00
20,00
10,00
0,00
Sonae H / Hipers Colgate / Sonae

87. Replace Toothbrush Campaigns
• Purchase frequency less than once a year
• 2007 quarterly campaign to remind to change
toothbrush every 3 months Campaign 26/02 - 11/03
113%
113%
114%
VB VL QT
Anterior Acção
ESCOVAS DENTES
60
47,49 49,61
50
37,01 37,96
40
26,47 27,23
30
20
10
0
S. / H+S 06 S. / H+S 07 S. H / Hipers S. H / Hipers S. S / S. S /
06 07 Supers 06 Supers 07
Dados YTD Julho / Agosto 2006 - 2007

88. Replace Toothbrush Campaigns
Insight:
• When asked, consumers claim they change brushes 3
times a year, but the purchase frequency remains less
than once a year
• When probed, consumers do not recall last time they
bought their toothbrush do not perceive it is time to
change
• 2008 quarterly campaign linked to seasons
New Season,
New Toothbrush

89. Kids Event
Sonae Target customer: family with Kids
Event focus 100% on kids
Assortment, Mechanic, POP Material
Timing: International Children Day (June 1st)

90. Kids Event
R/H
Insignia Sub-categoria VB QT
PASTAS DENTÍFRICAS 11,2% 25,2%
ESCOVAS DENTES 14,2% 21,4%
CONTINENTE
COMPLEMENT HIG ORAL 83,0% 73,3%
HIG ORAL INFANTIL 126,6% 92,3%
CONTINENTE Total 17,4% 27,9%
HIG ORAL INFANTIL
60
49,76 50,19
50 42,25
40,85
40 31,97 34,46
30
20
10
0
S. / H+S 06 S. / H+S 07 S. H / Hipers S. H / Hipers S. S / S. S /
06 07 Supers 06 Supers 07
Dados YTD Julho / Agosto 2006 - 2007

91. Conclusions
Strategic alignment & focus on shopper
Commitment to implementation
Follow-up and continuous improvement
Sonae Oral care SOM Evolution in 2007
From 32% to 33%
Colgate Oral Care BDI in Sonae
From xxx to YYYY

92. Differentiate or die:
© Oxford Strategic Marketing 2008
Key Success Factors

93. What have we seen?
How different marketing techniques can be used
to drive differentiation
Brand Proposition Development
Segmentation
Insight
Joint Strategies
© Oxford Strategic Marketing 2008

94. What have we seen?
How differentiation can be achieved through
different shopper touchpoints
Environment Product
© Oxford Strategic Marketing 2008 2

95. What have we seen?
How differentiation can be achieved through
different shopper touchpoints
People & Services Communication
© Oxford Strategic Marketing 2008 3

96. Key Learnings
Retailers are using sophisticated brand management
techniques and successfully linking them to
operational excellence
Solid strategic understanding can improve retailer-
supplier collaboration as well as improve shopper
experience
Differentiation can take many forms – product,
environment, people and communication
© Oxford Strategic Marketing 2008 4

97. © Oxford Strategic Marketing 2008 5