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An affiliate of Philip Morris International

Indonesia New Retail Segmentation

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

2
CONFIDENTIAL, for HMS PMID internal purposes only

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

3
CONFIDENTIAL, for HMS PMID internal purposes only

Case for Change


1. Different segmentation for different retail channels, no holistic perspective on
where to invest and how much

Industry Volume

Industry Volume

Space for CE

Outlet Potential

RRO

STAR

KA

Investment cost 2012 = USD 1.1/000 sticks

USD 0.7/000 sticks


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Case for Change


1. Different segmentation for different retail channels, no holistic perspective on
where to invest and how much

2. No/less information to justify strategic resources allocation

Industry Volume

Space for CE

A
1

Where to deploy?
PPOSM
Call cycle decision
Retail Platform (SRC)

2
3
4

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Case for Change


1. Different segmentation for different retail channels, no holistic perspective on
where to invest and how much

2. No/less structured information to justify strategic resources allocation


3. No structured information on which brand(s) and mechanic to be activated at a

particular outlet

>80% of commercial initiatives deployed at 1A and 2A regardless brand and mechanic

Trade program scale in terms of participant number is predominantly big (>300


outlets) and lacking consumer reach information

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Case for Change


1. Different segmentation for different retail channels, no holistic perspective on
where to invest and how much

2. No/less structured information to justify strategic resources allocation


3. No structured information on which brand(s) and mechanic to be activated at a

particular outlet
4. Information from National Customer Survey 2010 was not incorporated to

segmentation and not fully utilized for commercial initiatives decisions

Some areas did update the


information through ad-hoc surveys
(11 areas in 2011, 26 areas in 2012, 8
areas in 2013)

Attributes are more on outlet quality


rather than capability/potential

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Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

8
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Project Objective & Deliverables


Project Objective:
Develop a new progressive retail segmentation encompassing retailer, outlet, and
consumer profiles which will enable us to allocate the right resources/right commercial
initiatives with the right brand at the right touch point at the right time

Project Deliverables:

Retails Commercial Drivers to be leveraged by HMS.

Segmentation for all retail channels (RRO, IMO, KA, STAR, HOP) for more focus,

effective & efficient strategic resources allocation.

Targeted commercial initiative with the right brand or multibrands at the right time

through structured information filtering by not only Field Sales & Sales Promo Dept
but also by Field Marketing, Trade Marketing, KA and Brand Management

Consumer reach information for more efficient deployment linking to brand


BPWATTS/BAM.

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Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

10
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Project Scope
Project Scope:

Mandatory Channels : RRO, STAR, Convenience, IMO, Spm/Hpm & HOP

Additional Channels : EZD Downline, Strategic Marketing Outlets

Project Area : Nationwide

11
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Project Scope
Project Scope:

Project member

CONFIDENTIAL, for HMS PMID internal purposes only

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

13
CONFIDENTIAL, for HMS PMID internal purposes only

Project Approach
Project Approach:
1. Inspired by OCs Leveraging the Trade concept but tailored to Indonesia market

dynamics, legal environment and business workload

Leveraging the Trade Framework from OC


Define what
drives my
business

Define
Channel Role
and Prioritize

Allocate
Resources
and Deploy

Develop
Retailer Value
Proposition

Education
and
Activation

Indonesia Retail Segmentation Framework


Define what
drives my
business

Prioritize
Channel

Tailored

Allocate
Resources
and Deploy

Develop
Retailer Value
Proposition

Education
and
Activation

Out of Scope
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Project Approach
Project Approach:
2. In other words, this is not a rocket science. This is simply combining and

enhancing information from current segmentation and National Customer Survey


and make a full use of it for resource allocation and commercial initiatives

deployment

3
4
5
Enhanced
Segmentation

Enhanced
NCS

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Project Approach
Project Approach:
3. Use current Sales System & Tool (iSMS with Handheld) to collect data

Attributes are more relevant for restricted


markets

Requires heavy customization (time & cost) for


Indonesia

Future Development for IPAD (Field IQ)

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Project Approach
Project Approach:
4. Use OCs Trade Segmentation Tool & Brand Plan Deployment Tool to plot the

outlets to segmentation grids and to filter outlets for a particular commercial


initiative (zero cost and no customization is required)

Trade Segmentation Tool

Brand Plan Deployment Tool

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Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

18
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Indonesia New Retail Segmentation

Changing our commercial approach to optimize the allocation of


resources: Money, People and Time

What drives my business?

Do I have the resources to grow up the business?


Am I allocating my resources efficiently?

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B2B Framework

Adult smoker journey

Define what
drives my
business

Prioritize
Channel

Allocate
Resources and
deploy

Education and
Activation

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Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

a. Workshop 1
(i) Define What Drive My Business

(ii) Prioritize Channel


b. Field Survey
c. Workshop 2

(i) Strategic Resources Allocation


(ii) 3D Deployment Filter
6. Case Study
21
CONFIDENTIAL, for HMS PMID internal purposes only

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

a. Workshop 1
(i) Define What Drive My Business

(ii) Prioritize Channel


b. Field Survey
c. Workshop 2

(i) Strategic Resources Allocation


(ii) 3D Deployment Filter
6. Case Study
22
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Commercial Drivers
1. Commercial Drivers determined based on external environment such as market
dynamics, commercial issues/opprtunities and brand BPWATTS

Market Dynamics

Commercial
Issues & Opportunities

COMMERCIAL DRIVERS

Brand BPWATTS &


Strategies

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Commercial Drivers
1. Commercial Drivers determined based on external environment such as market
dynamics, commercial issues/opprtunities and brand BPWATTS

2. Based on the external environment, commercial drivers have many variation start
from fundamental drivers to market spesific drivers
MARKET SPECIFIC

FUNDAMENTAL

Handling

Availability

Product
Visibility

POS
Comm.

Consumer
Engagement

Pricing

Retailer
Advocacy

Speed To
Market

CA
Support

Consumer
Data

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Commercial Drivers
1. Commercial Drivers determined based on external environment such as market
dynamics, commercial issues/opprtunities and brand BPWATTS

2. Based on the external environment, commercial drivers have many variation start
from fundamental drivers to market spesific drivers
3. Based on all relevant factors in Indonesia, 5 commercial drivers and their
weighting already defined as follow :
Commercial Drivers

Definition

Weighting
Current

Future

Availability & Handling

Number of SKUs listed at touch point, SKUs to be


available at touch, eliminating OOS Incidence

30%

30%

Product Visibility

Ability to display packs (i.e. facings, planogram, etc.)


including product staging

25%

25%

Retailer Advocacy

Retailers capabilities to communicate product / brand


message to adult smoker

20%

25%

POS Communication

Ability to put POS material at optimum place

15%

5%

Consumer Engagement

Ability, willingness and opportunities to interact


directly with adult smokers for trial and adoption

10%

15%
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CONFIDENTIAL, for HMS PMID internal purposes only

Commercial Drivers
4. In order to elaborate and measure Commercial Drivers at touch point level,

attributes to translate the Commercial Drivers were identified as follow :


Commercial
Drivers

Relevance

Low
Capability : 1

Mid
Capability : 2

High
Capability : 3

20%

0-10 SKU

11-25 SKU

> 25 SKU

5%

less than 60% of


SKU available

60 - 80% of
SKU available

more than 80% of


SKU available

5%

less than 60% of


SKU available

60 - 80% of
SKU available

more than 80% of


SKU available

Cigarette Display Location

10%

Hidden

Far from
Selling Point

At Selling
Point

Product Display

10%

No Display

Sleeping Pack

Front Pack Facing

Space for Facing

5%

Small (<20 pack


facing)

Medium (20-40 pack


facing)

Large (>40 pack facing)

Active Communication

20%

passive

active

influencer

Visual impact

7.5%

Less

Moderate

Vocal Point

5%

TPOSM / POC
only

TPOSM & TTD

Full Package

2.5%

No

Willingness

5%

No

Yes

Initiative

Open Space

3%

0 - 5 m2

6 - 25 m2

>25 m2

Consumer Habit

2%

Come & Go

Weighting

Attributes
Number of SKU Handling

Availability &
Handling

Product
Visibility

Retailer
Advocacy

POS
Communication

30%

25%

20%

15%

OOS Incidence major brand


(HMS & Competitor) based on
survey - pack selling
OOS Incidence HMS major brand
based on KSI - pack selling in t
he last 3 months

Space for POS Comm

Owner Compliance of Execution

Consumer
Engagement

10%

Yes

Hang Out

26

CONFIDENTIAL, for HMS PMID internal purposes only

Commercial Drivers
4. In order to elaborate and measure Commercial Drivers at touch point level,

attributes to translate the Commercial Drivers were identified as follow :


5. To support Commercial Initiatives Deployment, it needs to collect additional
attributes by considering 3D parameter (consumer profile, retailer profile and
touch point profile) as listed below :

Consumer
Profile

Age
Occupation
Open / Close Neigborhood
Consumer Decision Making

Regular / Iregular Consumer


Consumer Reach
Peak Hours
Peak Days

Retailer
Profile

Buying Frequency to Upline


Distance to Upline (Time)
Upline Name

Payment Method to Upline


Retailer Smoking Status
Personal Interest

Touch Point
Profile

Industry Volume
Location vs Surrounding
Opening Hours
Building Type (Permanent / Non)
Building Status (Owned / Rent)

POS Indoor / Outdoor Regulation


Registered by Cigarette Company
Store Width
% Business to End Consumer
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Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

a. Workshop 1
(i) Define What Drive My Business

(ii) Prioritize Channel


b. Field Survey
c. Workshop 2

(i) Strategic Resources Allocation


(ii) 3D Deployment Filter
6. Case Study
28
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Prioritize Channel
After Commercial Drivers have defined, it needs to assessing the capabilities of each
channel to support brands by following 3 analyses :
1. Channel GETS Analysis
2. Competition Gap Analysis
3. Channel Profitability Analysis

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Prioritize Channel
After Commercial Drivers have defined, it needs to assessing the capabilities of each
channel to support brands by following 3 analyses :
1. Channel GETS Analysis Current Condition
Commercial Drivers

Channel
Capabilities

Market
Relevance

Scale of 1 to 3

RRO

STAR

IMO

CVS

SPM/
HPM

HOP

Availability & Handling

30%

2.5

2.5

Product Visibility

25%

2.5

Retailer Advocacy

20%

2.5

1.5

POS Communication

15%

1.5

1.5

2.5

Consumer Engagement

10%

2.5

2.08

1.68

2.38

2.88

1.55

1.60

Channel Gets Index

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Prioritize Channel
After Commercial Drivers have defined, it needs to assessing the capabilities of each
channel to support brands by following 3 analyses :
1. Channel GETS Analysis Future Condition
Commercial Drivers

Channel
Capabilities

Market
Relevance

Scale of 1 to 3

RRO

STAR

IMO

CVS

SPM/
HPM

HOP

Availability & Handling

30%

2.5

2.5

Product Visibility

25%

2.5

1.5

Retailer Advocacy

25%

2.5

2.5

POS Communication

5%

1.5

2.5

Consumer Engagement

15%

2.5

2.5

2.5

2.43

2.03

2.70

2.93

1.00

1.60

Channel Gets Index

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Prioritize Channel
After Commercial Drivers have defined, it needs to assessing the capabilities of each
channel to support brands by following 3 analyses :
1. Channel GETS Analysis
2. Competition Gap Analysis Channel RRO

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CONFIDENTIAL, for HMS PMID internal purposes only

Prioritize Channel
After Commercial Drivers have defined, it needs to assessing the capabilities of each
channel to support brands by following 3 analyses :
1. Channel GETS Analysis
2. Competition Gap Analysis
3. Channel Profitability Analysis Channel STAR
18,000

Sales Volume (mio sticks)


Total Customer
Net Profit (USD / 000 Sticks)
% Net Profit to Gross Revenue

16,000
14,000

249
49,569
16.4
24%

12,000

8,000

In 000 USD

12,351

10,000

16,932

6,000

493

4,000

15

2,000

3,938
4,073

Gross Revenue Operation-Related


Spendings

Trade-Related
Spending

DME & Trade


Expense

Net Profit

33

CONFIDENTIAL, for HMS PMID internal purposes only

Prioritize Channel
After Commercial Drivers have defined, it needs to assessing the capabilities of each
channel to support brands by following 3 analyses :
1. Channel GETS Analysis
2. Competition Gap Analysis
3. Channel Profitability Analysis Summary
Net Profit (USD / 000 Sticks)

16.4

18.4

19.2

18.7

IMO

CVC

SPM/HYP

10.2

RRO

SRC

STAR

HOP

(9.1)

(19.4)
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CONFIDENTIAL, for HMS PMID internal purposes only

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

a. Workshop 1
(i) Define What Drive My Business

(ii) Prioritize Channel


b. Field Survey
c. Workshop 2

(i) Strategic Resources Allocation


(ii) 3D Deployment Filter
6. Case Study
35
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Field Survey

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Channel Fact Sheet


By putting this (GETS Index, Competition Gap and Channel Profitability Analysis)
together combined with other elements for all channels, we compile the channel
fact sheets which become key document that is shared for strategic decisions
across the commercial organization to secure the necessary alignment and focus.

37
CONFIDENTIAL, for HMS PMID internal purposes only

Channel Fact Sheet


By putting this (GETS Index, Competition Gap and Channel Profitability Analysis)
together combined with other elements for all channels, we compile the channel
fact sheets which become key document that is shared for strategic decisions
across the commercial organization to secure the necessary alignment and focus.

38
CONFIDENTIAL, for HMS PMID internal purposes only

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

a. Workshop 1
(i) Define What Drive My Business

(ii) Prioritize Channel


b. Field Survey
c. Workshop 2

(i) Strategic Resources Allocation


(ii) 3D Deployment Filter
6. Case Study
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Workshop 2 Objective

Supporting Tools

Channel Segmentation and


Strategic Resources Allocation
Trade Segmentation
Tools

Deploying 3-D Filtering


Brand Plan Deployment
Tools
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What are the differences ?

Trade Segmentation Tools

Call Cycle
Sales Force Allocation
Outlet Replacement
Time Spent Allocation
POSM Re allocation
Brand Focus Availability Each Cluster
etc
Strategic Resources Allocation
Top Level Perspective
Non Related to Brand

Brand Plan Deployment Tools

Stick Selling
Stock Management
Visibility
DST Deployment
Mobile Entertainment
Small Event
etc
Commercial Initiatives
Budget Spending
Touch Point Granularity
Brand Related
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CONFIDENTIAL, for HMS PMID internal purposes only

What are the differences ?

Trade Segmentation Tools

Call Cycle
Sales Force Allocation
Outlet Replacement
Time Spent Allocation
POSM Re allocation
Brand Focus Availability Each Cluster
etc
Strategic Resources Allocation
Top Level Perspective
Non Related to Brand
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Example : POS Plotting and Segment Creation

Industry
Volume

DEFEND

INVEST

C2

C1
EXPLORE

OPTIMIZE

C4
*MINIMIZE INVESTMENT

C3

C5
POS
Gets Index
Potential

1.0

1.4

1.8

2.2

2.6

3.0

* Below Break Even Point and low Get Potential


CONFIDENTIAL, for HMS PMID internal purposes only

Score Card from Segmentation Tool

CONFIDENTIAL, for HMS PMID internal purposes only

Channel RRO

Y axis determined refers to current NCC approach :

Industry Volume

Bottom threshold : use threshold of class 4 (150 ppw) which is considered as less activity
cluster
Top threshold : use class 1 threshold = 750 ppw

2.1

2.5

invest

explore
defend

750
explore

150

GETS Index

minimize
X Axis
Commercial Drivers
Availability and Handling
Product Visibility
Retail Advocacy
POS Communication
Consumer Engagement

Value of Threshold

1st threshold

2nd threshold

Wtd

Capability

GETS

Capability

GETS

30%
25%
20%
15%
10%

3
3
1
1
1

0.9
0.75
0.2
0.15
0.1

3
3
3
1
1

0.9
0.75
0.6
0.15
0.1

100%

2.1

2.5

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CONFIDENTIAL, for HMS PMID internal purposes only

Trade Segmentation Score Card (RJKI)

Score Cards

Segment Facts

INVEST

EXPLORE

DEFEND

MINIMIZE

# POS

1,085

4,703

27,661

310

Avg. Volume/Store
(Pack/Week)

1,844

1,460

723

124

Avg. Gets Index


Potential

2.6

2.4

1.9

1.8

Industry Volume
(mio stick/month)

152

521

1,517

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKI)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Call Cycle (weekly)

78%

69%

55%

36%

PPOSM Investment

63%

36%

11%

10%

Planogram
Compliance

98%

98%

98%

94%

Availability
(Core Brand)

100%

100%

100%

100%

Availability
(Pot Brand)

100%

99%

96%

88%

OOS
(Core Brand)

0.0%

0.0%

0.0%

1.0%

OOS
(Pot Brand)

2%

3%

7%

17%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKI)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Visibility
Core Brand

95%

84%

72%

67%

Visibility
Pot Brand

87%

68%

45%

38%

SOM

61%

60%

59%

60%

Trade Program

Shop Sign
Stand Alone

30%

12%

2%

2%

TTD
Stand Alone

37%

26%

9%

9%

SRC

24%

8%

1%

1%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKI)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

HMS
Carry Product

61%

33%

9%

10%

DJR
Carry Product

7%

6%

2%

1%

BAT
Carry Product

7%

6%

5%

6%

GG
Carry Product

4%

4%

3%

3%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

Regional Outer Jakarta

CONFIDENTIAL, for HMS PMID internal purposes only

Trade Segmentation Score Card (RJKO)

Score Cards

Segment Facts

INVEST

EXPLORE

DEFEND

MINIMIZE

# POS

1,812

6,316

26,046

580

Avg. Volume/Store
(Pack/Week)

2,018

1,591

762

120

Avg. Gets Index


Potential

2.6

2.4

2.0

1.9

Industry Volume
(mio stick/month)

277

762

1,506

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKO)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Call Cycle (weekly)

81%

66%

38%

33%

PPOSM Investment

68%

38%

11%

8%

Planogram
Compliance

99%

99%

99%

100%

Availability
(Core Brand)

100%

100%

100%

100%

Availability
(Pot Brand)

99%

98%

94%

89%

OOS
(Core Brand)

0.0%

0.0%

0.0%

1.0%

OOS
(Pot Brand)

3%

5%

11%

17%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKO)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Visibility
Core Brand

91%

82%

68%

83%

Visibility
Pot Brand

86%

70%

50%

60%

SOM

57%

56%

56%

58%

Trade Program

86%

72%

49%

24%

Shop Sign
Stand Alone

26%

9%

3%

1%

TTD
Stand Alone

40%

26%

7%

4%

SRC

17%

5%

1%

0%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKO)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

HMS
Carry Product

57%

30%

8%

4%

DJR
Carry Product

13%

9%

4%

2%

BAT
Carry Product

7%

7%

5%

2%

GG
Carry Product

9%

7%

4%

5%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

Area Retail Jakarta Barat

CONFIDENTIAL, for HMS PMID internal purposes only

Trade Segmentation Score Card (Jakarta Barat)

Score Cards

Segment Facts

INVEST

EXPLORE

DEFEND

MINIMIZE

# POS

191

891

5,403

145

Avg. Volume/Store
(Pack/Week)

1,897

1,405

718

123

Avg. Gets Index


Potential

2.6

2.4

1.9

1.9

Industry Volume
(mio stick/month)

27

95

294

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKO)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Call Cycle (weekly)

85%

66%

41%

30%

PPOSM Investment

60%

37%

10%

9%

Planogram
Compliance

98%

96%

97%

91%

Availability
(Core Brand)

100%

100%

100%

100%

Availability
(Pot Brand)

100%

99%

97%

93%

OOS
(Core Brand)

0.0%

0.0%

0.0%

1.0%

OOS
(Pot Brand)

2%

4%

8%

13%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKO)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Visibility
Core Brand

94%

81%

64%

68%

Visibility
Pot Brand

87%

68%

41%

42%

SOM

57%

56%

57%

59%

Trade Program

Shop Sign
Stand Alone

29%

14%

3%

2%

TTD
Stand Alone

38%

28%

8%

8%

SRC

23%

8%

1%

1%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (RJKO)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

HMS
Carry Product

60%

36%

9%

9%

DJR
Carry Product

6%

5%

2%

1%

BAT
Carry Product

6%

5%

3%

2%

GG
Carry Product

6%

7%

5%

1%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

Area Retail Bogor

CONFIDENTIAL, for HMS PMID internal purposes only

Trade Segmentation Score Card (Bogor)

Score Cards

Segment Facts

INVEST

EXPLORE

DEFEND

MINIMIZE

# POS

533

1,697

4,918

64

Avg. Volume/Store
(Pack/Week)

2,021

1,581

797

121

Avg. Gets Index


Potential

2.6

2.4

1.9

1.9

Industry Volume
(mio stick/month)

82

204

297

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (Bogor)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Call Cycle (weekly)

86%

64%

33%

8%

PPOSM Investment

60%

29%

8%

5%

Planogram
Compliance

100%

99%

99%

-%

Availability
(Core Brand)

100%

100%

100%

100%

Availability
(Pot Brand)

100%

99%

97%

95%

OOS
(Core Brand)

0.0%

0.0%

0.0%

1.0%

OOS
(Pot Brand)

2%

5%

10%

13%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (Bogor)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

Visibility
Core Brand

92%

82%

68%

80%

Visibility
Pot Brand

88%

69%

45%

44%

SOM

60%

60%

59%

65%

Trade Program

89

76

61

31

Shop Sign
Stand Alone

29%

10%

2%

2%

TTD
Stand Alone

100%

100%

100%

100%

SRC

16%

4%

1%

0%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization (Bogor)

Directions / Initiative
INVEST

EXPLORE

DEFEND

MINIMIZE

PM Strategic
Decision

Current

HMS
Carry Product

61%

29%

7%

0%

DJR
Carry Product

6%

7%

3%

0%

BAT
Carry Product

10%

6%

4%

5%

GG
Carry Product

13%

10%

5%

5%

Future

Current

Future

Current

Future

Current

Future

CONFIDENTIAL, for HMS PMID internal purposes only

Channel STAR

Industry Volume

Channel STAR has same approach and threshold with RRO

2.1

2.5
invest

explore
750
defend

explore

150

minimize
GETS Index

X Axis
Commercial Drivers
Availability and Handling
Product Visibility
Retail Advocacy
POS Communication
Consumer Engagement

Value of Threshold

1st threshold

2nd threshold

Wtd

Capability

GETS

Capability

GETS

30%
25%
20%
15%
10%

3
3
1
1
1

0.9
0.75
0.2
0.15
0.1

3
3
3
1
1

0.9
0.75
0.6
0.15
0.1

100%

2.1

2.5
65
CONFIDENTIAL, for HMS PMID internal purposes only

Channel STAR

Score Cards

Segment Facts

INVEST

EXPLORE

DEFEND

MINIMIZE

# POS

130

1,419

28,064

7,116

Avg. Volume/Store

1,426

800

346

109

Avg. Gets Index


Potential

2.6

2.4

1.9

1.7

PM Strategic
Decision

Current

Future

Current

Future

Current

Future

Current

Future

Call Cycle (weekly)

0.5

*****

0.6

*****

0.6

***

0.7

PPOSM Investment

***

**

66
CONFIDENTIAL, for HMS PMID internal purposes only

Channel Convenience

Y axis determined based on :

Bottom threshold : same approach to RRO/STAR (150 ppw)


Top threshold : average selling out account Indomaret (represent national spread of CVS)
= 666 ppw
2.6

defend

invest

666
optimize

150

minimize investment

X Axis
Commercial Drivers
Availability and Handling
Product Visibility
Retail Advocacy
POS Communication
Consumer Engagement
Value of Threshold

explore

Wtd
30%
25%
20%
15%
10%
100%

Threshold
3
3
1
3
3

0.90
0.75
0.20
0.45
0.30
2.60

Retailer Advocacy considered to be dynamic variabel


due to vary type of retailer advocacy degree of each
touch point which is very important to develop our
brand
67
CONFIDENTIAL, for HMS PMID internal purposes only

Channel Spm/Hpm

Y axis determined based on :

Bottom threshold : same approach to Convenience (150 ppw)


Top threshold : average Industry/outlet based on Nielsen survey = 618 ppw
Industry Volume

2.4

defend

invest

618

optimize

150

minimize investment

explore
GETS Index

X Axis
Commercial Drivers
Availability and Handling
Product Visibility
Retail Advocacy
POS Communication
Consumer Engagement
Value of Threshold

Wtd
30%
25%
20%
15%
10%
100%

Threshold
3
3
1
3
1

0.90
0.75
0.20
0.45
0.10
2.40

Basic commercial drivers needed to Spm/Hpm is


Availability & Handling
Product Visibility
Consumer Engagement
68
CONFIDENTIAL, for HMS PMID internal purposes only

Trade Segmentation Tools Application


Call Cycle

Sales Force Allocation

1x1

1x1

1x2

RRO

RRO

RRO & STAR


1x1

1x2

RRO
STAR

PPOSM Investment

Outlet Replacement

2nd Priority
Cover

1st Priority

Cover

3rd Priority

Cover

2nd Priority

Cover
Replace

No PPOSM Investment

69
CONFIDENTIAL, for HMS PMID internal purposes only

Trade Segmentation Tools Application


Time Spent Allocation

Brand Focus Availability

Miin 13 brands

Very Intensive

All Brands

More Intensive

Core and Potential Brands

Maintain
More Intensive
Less Priority

Min 13 brands
Core Brands

YOU

DO

Have
Any
Idea

?
70
CONFIDENTIAL, for HMS PMID internal purposes only

What are the differences ?

Brand Plan Deployment Tools

Stick Selling
Stock Management
Visibility
DST Deployment
Mobile Entertainment
Small Event
etc
Commercial Initiatives
Budget Spending
Touch Point Granularity
Brand Related
71
CONFIDENTIAL, for HMS PMID internal purposes only

Brand Plan Deployment Tool

Targeted 3-dimensionally Initiatives

Analysis & Assessment work

Consumer
Profile

Retailer
Profile

Touch Point
Profile
# targeted touch point

CONFIDENTIAL, for HMS PMID internal purposes only

Commercial Initiatives Jakarta Zone

STRATEGY BPWATTS

Commercial Initiative Brief


Despite continued strong volume growth A Mild is facing increased competition challenging its
leadership of innovation and quality in the key, fast growing SKM LTLN segment, resulting in
slowing SOS growth

Strengthen emotional link with existing smokers through increased LAMP/HOP platform
Reinvigorate product perception for LA-29 smokers with product enhancement
Leverage MLD12 as alternative choice for smoker LTLN in segment middle price

Target Consumer

Source Brands

Male LA-29
Brotherhood
SES A,B

BAM Focus
Awareness
Trial
Purchase
Penetrate
Smoker

Objective
Increase SoM MLD16 0.3

DRIVERS

Availability
&
Handling

Product
Visibility

Retail
Advocacy

POS
Communication

Consumer
Engagement

CONFIDENTIAL, for HMS PMID internal purposes only

Commercial Initiatives Jakarta Zone

CONFIDENTIAL, for HMS PMID internal purposes only

3D Filtering Multi Brand Single Initiatives


Initiatives : Stick Selling
3D Deployment

A Mild

U Mild

Consumer Profi

Consumer decision making (Smoker)

Consumer decision making (Smoker)

Retailer Profile

Retailer Smoking Status (Smoker)

Retailer Smoking Status (Smoker)

Active Communication (Influencer &


Active)

Active Communication (Influencer &


Active)

%Business to end consumer (>80%)

%Business to end consumer (>80%)

Brand Over Index Competitor (DJ


Super, FIM, Clas Mild, Dunhill Mild)

Brand Over Index Competitor (Pro Mild,


Clas Mild)

Touch Point Profile

75
CONFIDENTIAL, for HMS PMID internal purposes only

76
CONFIDENTIAL, for HMS PMID internal purposes only

77
CONFIDENTIAL, for HMS PMID internal purposes only

3D Filtering Single Brand Multi Initiatives


Brand : A Mild
3D Deployment
Consumer Profile

Stick Selling
Consumer decision making (Smoker)

DST
Peak Days (Friday Sunday)
Peak Hour ( > 18.00)

Consumer decision making (Smoker)


Retailer Profile

Retailer Smoking Status (Smoker)

Willingness to Consumer Engagement


(Initiatives, Yes)

Active Communication (Influencer &


Active)
Touch Point Profile

%Business to end consumer (>80%)

%Business to end consumer (>80%)

Brand Over Index Competitor (DJ


Super, FIM, Clas Mild, Dunhill Mild)

Brand Over Index Competitor (DJ


Super, FIM, Clas Mild, Dunhill Mild)

78
CONFIDENTIAL, for HMS PMID internal purposes only

79
CONFIDENTIAL, for HMS PMID internal purposes only

80
CONFIDENTIAL, for HMS PMID internal purposes only

Flow of Thinking
Top Down Budget

Zone

Region

Area

Budget allocation for 500 touch points

Bottom Up

Prioritization

Targeted 650 touch points

Targeted touch point


Prioritization
CONFIDENTIAL, for HMS PMID internal purposes only

Tools Governance

Trade Segmentation
Tools

Brand Plan Deployment


Tools

HQ Channel Retail
HQ Zone
HSO Analyst
Regional Analyst
HQ Trade Marketing
HQ Consumer Engagement

HQ Channel Retail
HQ Zone
HSO Analyst
HQ Trade Marketing
HQ Consumer Engagement
Regional Analyst (Sales & Marketing)
Area Analyst (Sales & Marketing)
Area Supervisor (Sales & Marketing)
82
CONFIDENTIAL, for HMS PMID internal purposes only

Agenda
1. Case for Change
2. Project Objective & Deliverables

3. Project Scope
4. Project Approach
5. Indonesia New Retail Segmentation

6. Case Study

83
CONFIDENTIAL, for HMS PMID internal purposes only

Filtering outlet program


SRC & Klub Juara

CONFIDENTIAL, for HMS PMID internal purposes only

New Retail Segmentation Utilization

Area Retail Jakarta Selatan


3D Deployment

Consumer Profile

Area Retail Depok

SRC A MILD

3D Deployment

Age (18 35)


Occupation (Karyawan/Wiraswasta/
Profesional & Mahasiswa)
Regular consumer

KLUB JUARA DSS COMBI

Consumer Profile

Touch Point Profile

Retailer Profile

SRC

# Outlet

% Business to end consumer (> 80%)


Space for POS Communication (Full
Package)
Visual Impact (Vocal Point)
Building Type (Permanent)
Building Status (Owned)
Owner Compliance of Execution (Yes)
Owner Communication to consumer
(Active)
Owner willingness of Consumer
Engagement (Yes & Initiative)
Total Volume >350 ppw

Current
SRC
86

Result
Filtering
60

# SRC match Filtering

13

CC

858

Touch Point Profile

Retailer Profile

Klub Juara
# Outlet
# Klub Juara match
Filtering
CC

Age (25-35, > 35)


Occupation
(Buruh/Nelayan/Petani/Sopir &
Karyawan/Wiraswasta
Regular consumer
% Business to end consumer (>
80%)
Space for POS Communication
(TTD & Full Package)
Visual Impact (Vocal Point)
Building Type (Permanent)
Area Surounding, Perumahan,
Industry, Terminal
Owner Compliance of Execution
(Yes)
Outlet good communication
Selling Out GG Fim & Dj Super 12
Over Index (som > 23%)

Current
Klub Juara
100

Result
Filtering
184
9
545

CONFIDENTIAL, for HMS PMID internal purposes only

New Trade Segmentation Utilization


List Outlet SRC A Mild (Filtering NRS match with Panel Outlet) Area Jakarta Selatan

List Outlet Klub Juara (Filtering NRS match with Panel Outlet) Area Jakarta Selatan)

CONFIDENTIAL, for HMS PMID internal purposes only

Top 10 upline ws beserta jumlah


total downline masing2 ws

CONFIDENTIAL, for HMS PMID internal purposes only

Top Ten WS Downline

Jakarta Barat
No

Code

# downline

1
2
3
4
5
6
7
8
9
10

BOG0003729
BOG0000235
BOG0002491
BOG0008031
BOG0002057
BOG0005738
BOG0001497
BOG0000494
BOG0006662
BOG0005645

205
142
135
110
108
104
93
92
84
79

No

Code

# downline

1
2
3
4
5
6
7
8
9
10

JK30011577
jk30003417
JK30000579
JK30001313
JK30002767
JK30000904
jk30006153
JK30003379
JK30006608
JK30011482

167
164
146
144
141
121
121
97
97
89

WS Name

Cluster

SUBUR JAYA PS. ANYAR


SINAR INTAN
SEKAR WANGI
1001
JAGO 3
LESTARI MAKMUR
YUDI
SUKASARI II
ESKA
DEDE

ROYALCROWN
GRANDE
GRANDE
PREMIERE
GRANDE
GRANDE
GRANDE
GRANDE
GRANDE
GRANDE

WS Name

Cluster

TOKO ERY
TOKO CUNG
TOKO AMOY
TOKO BUYUNG
TOKO BARU
UD. TRI WIJAYA
PD. JAYA MAKMUR
TOKO SURYA ABADI
TOKO KENCANA
TOKO ILHAM

EXECUTIVE
GRANDE
EXECUTIVE
GRANDE
GRANDE
GRANDE
EXECUTIVE
GRANDE
GRANDE
EXECUTIVE

Bogor

CONFIDENTIAL, for HMS PMID internal purposes only

Thank You

89
CONFIDENTIAL, for HMS PMID internal purposes only