Boosting Business Through Marketing
Lauri Peltola Recap of Kesko Strategy Process
“Responsibility combined with a strong identity and appealing brands will be an increasingly central requirement in every business line”
“Kesko will have to continue its responsibility work and strengthen its corporate identity and core brands”
2 Long Term Value Growth of Highly Branded Companies and the S&P Average % 2.5
2.0
1.5
1.0
BV/EV > 30% 0.5 Top 10 BV/EV AAA Brands AAA Brands (US Only) 0.0 S&P 500 Start 2007 2008 2009 2010 2011 2012 2013 2014 2015
3 Unified Brand Identity
4 Target Is to Unify All K-chains Brand Core and Marketing Communication
Change the content marketing New K brand and identity for consumers
• Shift focus from the tactical price&product • Beginning with K-market/SLK conversion 5/2016 communication to the long term strategic • Plussa renewal 10/2016 marketing to grow the preference and the market share • Other grocery trade chains 2017 • Increase the share of targeted marketing based on • K-rauta Q1/2017 customer data • Cross marketing possibilities being investigated with • Renewal started with K-Markets in 5/2016 the car trade • More extensive renewal of the grocery trade Measurement and efficiency marketing is being set up • Measurement of the marketing efficiency (ROMI)
5 Strategic Spearhead Projects of K-Group Marketing
Strategic objective Target level
Fundamental renewal of the grocery trade +1.0% growth of the market share by increasing the preference by marketing +2.8% K-rauta – brand and identity renewal Preference growth of +2-4% depending on the present situation of different markets. VW brand preference comeback Return of Volkswagen to #1 in the brand preference and level of >30
6 K-brand Value in Euros
Value according to Brand Finance was €886m in 3/2016
Growth from previous year 42%
The fourth most valuable brand in Finland after Nokia, Kone and IF
7 Goals: Promise: Objective 2019:
FOR SHOPPING TO BE FUN THE MASTER OF INSPIRATIONAL CUSTOMER EXPERIENCE Growth of market share Value driven processes: through the brand preference CUSTOMER AND QUALITY IN K makes everyday life easier and inspires EVERYTHING WE DO customers to reach the dreams. We predict customers’ needs and serve the customer One K exclusively throughout life. We make our INSPIRATION PERSONAL RESPONSIBLE best to make shopping fun.
8 “Half of our marketing spend is wasted, we just don’t know which half.”
9 Three Ways to Improve ROMI
1 Metrics • Based on strategic objectives Optimise Execute future plans campaign 2 ROMI • How to improve sales with the same marketing investment
3 Campaign analytics Learn from • What is the desired impact the past • Which products & personal offers lead performance to the best result
10 Starting Point is Different for Each Chain
Percent of sales volume explained by source (%) 100 6 8 10 11 12 15 21 22 26 29 30 31 32 80 37 39 40
64 60
94 92 90 89 88 85 Incremental sales 79 40 78 74 71 70 69 68 due to marketing 63 61 60
20 36
Base sales 0
Short-term impact of marketing Source: K-Digital
11 Supermarket
ROMI There Is Room for Improvment in the Current Marketing Investment
Marketing activities investment vs. value contribution
6% 16% Thursday Leaflet Offer 20% Wednesday Leaflet Offer 20% 4% 3% Monday Leaflet Offer 16% 19% Postinen 8% 33% 9% Newspaper
22% TV 19% 6% Adform Display Total Invested Value Contributed Source: K-Digital
13 14