italian grocery overview & focus on incoop stores

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Page 1: Italian grocery overview & focus on inCOOP stores

Trade Marketingproject

Page 2: Italian grocery overview & focus on inCOOP stores

Italian grocery overview & focus on inCOOP stores

Page 3: Italian grocery overview & focus on inCOOP stores

Summary• Italian Grocery overall situation

• Retailer analysis

• Category analysis

• Shelf analysis

• Retailer marketing tools analysis

• New ideas for category improvements

Page 4: Italian grocery overview & focus on inCOOP stores
Page 5: Italian grocery overview & focus on inCOOP stores

Economic trend

• Strong italian crisis in 2012-2013

period.

• Collapse of growth economic tax.

• The depth and the lenght of the crisis have

shoked italian families lifestyles, making

citizens more and more poor and iniqual.

• The families’ salary evolution shows, in a few

years, a reduction of 10% in real terms.

• Today 3 millions of italians are in a situation

of poorness, that is a social phenomenon

that influence the possibility to have an

adequate diet.

Page 6: Italian grocery overview & focus on inCOOP stores

The worst postwar crisis obligate families to search savings in every need’s dimensions,

keeping unvaried only the indispensable purchases.

The receipt of this constant research for saving have been:

Today situation

1/2 Italians buy only the essential through promotions and offers

1/3 have simply reduced the quantity purchased

• Commercial

nomadism

• Promotions hunting

• Brand’s loyalty

reduction

• Private label

products

• First priceproducts

• Discount boom

• Cheaper product’s sectors

• Renounce to not essential

purchases

Afterthought of lifestyles

Stopping consumerism

excesses

Main driver in DPM:SAVINGS

Page 7: Italian grocery overview & focus on inCOOP stores

Innovation in customer’s purchasing

behavior

• Attention to wastefullness

• Just-in time purchase

• Information research on internet

Italians who goes to distributor websites to check promotions: 50%.

Success of Social Media pages about

• doing groceries

• private label

• savings opportunity using the

electronic flier

Consumer 2.0Innovation pulled by crisis

Page 8: Italian grocery overview & focus on inCOOP stores

Turnover 57 € Billion in 2012, with a negative trend (- 0,4%) compared to 2011.

Infra channel performances

Polarization of purchasing

behavior

Ready meals negative trend

Preparation of food at home

positive trend

Products with the greatest

growth trend:

Fresh packaged products

Meat

Cheese & salami

CPGConsumer Packaged Goods

Page 9: Italian grocery overview & focus on inCOOP stores

Coop has made ethics a cornerstone of his enterprise system: in

fact, since December 1998 was the first European company to have

obtained the SA 8000 Certification.

The brand include all consumer’s cooperatives associated

with Coop Italia.

Stores are mainly diffused in North and

Centre of Italy,

but increasing in South and Islands.

The

biggest

cooperati

ves

Page 10: Italian grocery overview & focus on inCOOP stores

Market leaderin the Italian wide

organized

distribution

13,1 B

16 Regions

56’900

7,7 mln

115

1’474

Coop ItaliaPerformance highlights

18,4 %

Page 11: Italian grocery overview & focus on inCOOP stores

Coop AdriaticaPerformance highlights

18 ipercoop

158

supermarket

s

Emilia-

Romagna

Marche

Veneto

Abruzzo

Page 12: Italian grocery overview & focus on inCOOP stores

High quality and premium price (especially InCoop and regional FiorFiore

Convenient store (time and location)

High focus on Private label (account for 30 % of all private label

sold in Italy)

Differences within private label (FiorFiore vs MonetaCheRide

Higher end, not many promotions if any

Main customers of InCoop are older/families, young professionals

More money to spend, no need for extra promotions

Often used to quick, last minute buys, people willing to spend that little bit more instead of going

all the way out of town for better deals

Page 13: Italian grocery overview & focus on inCOOP stores

• Smaller:

Up to 1000 sqm

Convenience Stores

InCoop

• Small with base products, a

reasonably wide assortment with

most essential goods available.

Very few specific, specialised

products

• Large amount of Private Label

products

• Quick shopping

inCoopStore Format

Concept stores

Tutto Coop Solo Food in Parma sells only Private

Label

Stai Bene Coop in Bologna focussed on benessere

Le delizie di Coop Centro Italia in Perugia focused on

Page 14: Italian grocery overview & focus on inCOOP stores

inCoopOrganisation and Store layout

Page 15: Italian grocery overview & focus on inCOOP stores

Division’s Scenario

Since 2000, the category has evolved into combining high quality standards and product

innovation with "convenience“.

Increase of ready sauces compared to the past: the same data shows us that even the

national brand offer remains stable, with at least 70% of the market share. Today this data

must deal with the constant growth of the store brand, which has approximately 20% of the

market share.

Focusing just on service is no longer enough: in the future, quality and innovation will be

very important as positioning in the gastronomic area.

Since 2007 the value has increased by an average of 4%

per year

The category trend which is shifting towards pesto and

white sauces at the expense of tomato-based sauces has

been stable in recent years.

Even if today the consumer has a larger range of choice

in terms of ready made dishes, the idea of a plate of

pasta still seems to represent one of the best solutions

for Italian people.

Page 16: Italian grocery overview & focus on inCOOP stores

Confidence in the brand is key factor.

The desire for a different flavor can push the

impulse purchase

Consumers Profile

Penetration of the families is estimated to be 55%

57% of the volumes are purchased in the North of Italy. South

it is still very low

Life styles

Saving

timePurchase Value

and Areas

149 Northwest

140 Northeast

85 Centre and

Sardinia

46 South and Sicily

Target

Penetration

Choice’sparameters

Page 17: Italian grocery overview & focus on inCOOP stores

In order to drive down the price of staple

foods

and develop its group identity

Coop Private Label

Students

Housewif

es

Workers

Jarred pasta saucetarget

Perceived Quality

Security

Ethic

Ecologic

Economic

Brand products needs to meet some requirements and fulfil

the following values

Why?

Page 18: Italian grocery overview & focus on inCOOP stores

As we can see from the comments, the costumer feels secure and trusty of the Coop brand,and can use the product of other specifications.

Positive web feedbacks

Page 19: Italian grocery overview & focus on inCOOP stores

The time is a very important variable for the worker cluster, they want to eat a good first meal in less time possible

Positive web feedbacks

Page 20: Italian grocery overview & focus on inCOOP stores

Coop soucesCategory segmentation

Segmantation

Targeting

Expectations

Need & Use

Food

Workers

Cooking

Save time

Conservedgoods

Students

Recipes

Goodquality

Condimentsand saucesfor pasta

People not ableto cook a home

made sauce

Condiments

Affordableprice

Pre cookedsauces high conservation

Middle classpeople and

looking for a quick meal

Page 21: Italian grocery overview & focus on inCOOP stores

Coop souces – Decision Making Tree

USE• Cooking• Condiment

1

2

4

3

5

7

6

9

8

10

TYPE OF SAUCE• Fresh• Ready to eat

PRICE < €2,50• Yes• No

PACKAGING FORMAT• Tetra Pack / Jar confection• Small/ Medium/ Large

TASTE• Light• Heavy

VEGETARIAN• Yes• No

MEAT• Yes• No

PROMOTION• Yes• No

RAW MATERIALS ORIGIN• Region A• Region B

PRODUCT PROCESSES• Industrial• Handcraft

Page 22: Italian grocery overview & focus on inCOOP stores

A growing trend:Fior Fiore

Premium qualitative standard

Higher price than average

Superior idea of quality than the top

leaders products

PrivateLabel

Products

Availablein everyRetailCOOP

+ 280products

Fior Fiore +15%

Customers interested more in quality!

Organic products +20%

Origin

Traceabil

ity Social

Media

A main target customer for Fior Fiore

products are the foodies that are mostly

young and increasing, and they interested in

high quality food, but their goal is always the

families.

Overall idea of the

quality

Page 23: Italian grocery overview & focus on inCOOP stores

The Barilla bolognese sauce - second in

market share with 4,8% - is the most

distribted with 92% of retailers in Italy.

Its average price per unit (with no promo) is

2€.

Tomato saucesCategory overview

MS: 34,3 %

Awd:

74,3%

8 on 10 firsts brands

Granragu Star -

26%Mutti

+345%

AVERAGE PRICE of branded tamato sauces varies from

€1.77(with promo) and €1.99,

lower of a 10% of prices found inside Incoop.The registered RANGE of all branded

sauces is from €0,92 to €4

The average PROMOTIONALINTENSITYof branded tomato sauces is 31,4%, with

a range between 6,3% and 66%,

far from the very low promotion leverage found inside InCoop.

The price of the sauce

inside inCoop is 10% more

of that mean (2,20€).

Page 24: Italian grocery overview & focus on inCOOP stores

Shelf analysis

Consumer goal

orientation

Brand familiarity

Retail shelf displayShelf

segmentation

Category

segmentation

on the shelf

Ready madesoups

Ready madesauces

Cous cousMaccaroni salad

Rice salad

Rice

Brands

Brands packaging

Size

Type of sauce

Price

Page 25: Italian grocery overview & focus on inCOOP stores

Product assortement

Product Label products

Tetra Pack

• Sugo al basilico• Ragù di carne alla

bolognese• Alle olive• All’arrabbiata• Pomodoro e ricotta

Vendor : Columbus Srl

Jar

• Sugo VongoleVendor: Le Bontà Srl.

• Pesto Rosso sicilianoVendor: linea Fiorfiore

Competitors (Jar)

Sapori del Borgo

Condimento pasta sarde

Barilla

AmatricianaOlive

Ragù bolognese Arrabbiata

Basilico Pesto Siciliana

Genovese

Tigullio

Pesto genovese 190g Pesto genovese senza aglio

Saclà

PestoContadina

De Cecco

Ragù Bolognese

Page 26: Italian grocery overview & focus on inCOOP stores

Negotiation Power:Retailer vs Regional/ National/ International Brands

Page 27: Italian grocery overview & focus on inCOOP stores

Basilico Basilico /

1,06 € - 100 1,81 € - 171 /

Ragù Bolognese Ragù Bolognese Ragù Bolognese

1,47 € - 100 2,20 € - 150 2,70€ - 184

Arrabbiata Arrabbiata /

1,06 € - 100 1,81 € - 171 /

Olive Olive /

1,35 € - 100 1,98 € - 147 /

CoopTetra pack 390g

Barilla Glass400g

DeCecco Glass400g

Coop Glass FiorFiore line 180g Barilla Glass 190g

Pesto alla siciliana Pesto alla siciliana

3,90€ - 100 2,21€ - 57

Price range

Page 28: Italian grocery overview & focus on inCOOP stores

Private Label Analysis

Values of COOP private label products

• Convenience

• High quality

• Safety

• Ethicality

• Sustainability

Page 29: Italian grocery overview & focus on inCOOP stores

• The basket “ready”of private

lable product is increaingly taking

a greater portion of the market.

• Particularly the consumpion of

ready made souces, with a coop

brand, in the last year, appears

to be increased by more than

7%.

• Excellence

• High quality

• Passion

• Selection of the best raw

material

• High machining quality

• Revival of tradition in a

modern key interpretation

Very good quality/

price ratio

Coop Private Label

sauces, in Tetrapack

• huge assortment ( six

proposals)

• cheap price

• target : price seeker

“Fiorfiore” line products

• medium range of assorment

( 4 proposals)

• high price

• target : wealthy people who

are looking for the highest

quality

pesto genovese

Sugo alla norma

ragù carne chianina

pesto rosso siciliano

4

varieti

es

Private Label AnalysisSuccess Key Factors

Avoid

CANNIBALIZATION

using different

positioning

Page 30: Italian grocery overview & focus on inCOOP stores

Space Location

Loose visibility

Loose the push to purchase created by pasta

the impulse purchase

Comparing two different retailers InCoop

in Bologna we can confirm that

• Relatively standardized assortement

• Similar display

• Similar shelf allocation

Near to the pasta shelf

Near to the pureed

tomatoes shelf

or

Souces category located in the middle of the store, before entering in aarea dedited to fresh food, meats and cheese counted, yogurt and dairyproducts.

Mostly located in front of the “pureed tomatoes” shelfOn the right of the pasta’s shelf

Page 31: Italian grocery overview & focus on inCOOP stores

Traditional media

• Coop, as a very structured and complex retailer, has a differenciated

promotion strategy based on the territory, with different fliers on single

areas. inCoop presents different flyers on single stores.

• Special events are rarely set on inCoop stores, maybe because of their

corner structure. Something special during inaugurations. Coop in general

instead use to promote a lot events, in general focus on habits and

informations. (‘Mi illumino di meno’, environment lectures, ‘L’educazione al

consumo consapevole’, ecc…)

• Loyalty card ‘socio coop’ is often used to guarantee extra discounts in-store,

rewards after the collection of a fixed amount of expence and also discounts

in other places like cinemas or libraries.

• Coop magazines (InCoop, NuovoConsumo, CoopInforma, CON) are

delivered for free to coop associates, with focus on editorials about the

cooperative, sostainibility of products, events, purchaise suggestions and

advices.

Page 32: Italian grocery overview & focus on inCOOP stores

Promotions

• InCoop, as convenient store, normally uses less the promotion leverage to attract

clients.

• InCoop, considering the ‘not wide’ assortment, can hardly promote a massive

discount selection.

• Sauces are promoted more in other Coop channels like IperCoop and Coop, but still

you can find some occasional promotions also inside InCoop (ex: ‘Passata di

pomodoro Cirio’, 30% discount)

• SocioCoop card is often used to garantee to affiliates of the cooperative some

exclusive discount, also in the category. (Sughi ricchi Barilla, 30% disc.)

• Incremental discount are sometimes used to push bigger voulmes of sales inside

inCoop, trying to simulate a double-channel strategy. (‘Più ne compri più li sconti’,

inCoop Firenze)

• Coop gives the chance to select a limited number of product where you can apply

discounts, building a customized promotion offer. (30% of discount on 2 products)

Page 33: Italian grocery overview & focus on inCOOP stores

Advertising

• Coop Tv and outdoor ADV push strongly on environmental respect and try

to position the Coop brand as a premium one in term of quality. Both

emotional and informational spots are often used with well known

testimonials.

• On Youtube channel spots about tradition and family values are present to

communicate an identity of the brand related to the territory and to add

value to new categories of bio category of private lable.

• The payoff ‘La Coop sei tu’ used in spots try to enfisize the association

structure of this retailer, very close to their customers… However this

solution has created a communication crisis few months ago, with workers

who builded a counter-spot to complain about their low salaries.

• Flyers are often used for promotions, focusing on products instead of brand

image.

Page 34: Italian grocery overview & focus on inCOOP stores

New Media

• Coop website is used mainly for institutional communication, events and

new product lines promotion (like club 4/10). However an e-commerce

website has been added, but only for non-food product.

• Blog like ‘La cucina di casa Coop’ shares recipies divided by categories that

can be rated by customers.

• Coop uses Facebook managing different pages for their sub-structures

(coop Adriatica) or areas (coop Lombardia) or particoular categories

(Fiorfiore PL) with suggestion, recepes and products.

• Twitter on the other hand is used on more institutional way, with official

Coop Italia page, also here with different kind con contents (reports, events,

promotions, announcments, ecc…).

• Youtube, as previously seen, is widley used to communicate the brand

identity of coop. To be linked to the respect of territory and people

strenghten the idea of the cooperative.

• On mobile side coop is really active, with different applications: Coop

Supercard, Coop@home, Coop Hello Family.

Page 35: Italian grocery overview & focus on inCOOP stores

Foodies, people who want to be creative with their food

and who recognise quality.

People with some money to spend:

• Among older people, who can also interact

with the “gastronomy guy”.

• Young professionals, something nice and

quick.

Category improvementProposal

• Move sauces to the gastronomy area and rotate.

– Include a small description of the product, and

provide alternatives of use and recipes for the

customer through the gastronomy employee.

• Mainly FiorFiore because it is related to the brand image

of coop.

Target(

s)

..

more!

Proposal

Introduce to InCoop store a wider assortment of regional sauces with private

lable FiorFiore, strenghtening the actual Coop branding strategy with a more

accurate communication and positioning plan of this high-end/premium price

PL.

Page 36: Italian grocery overview & focus on inCOOP stores

Give to local producers or enterprises who find hard to

position their products the chance to sell their sauces

with Private Label brand.

Category improvementProducts & Services

New

Products

Services

Gastronomy Employee can

• Give information on products

• Provide feedback

• Provide suggestions for usage (ie. Other than

pasta)

• Recipe next to the shelf.

Unique sauces strongly linked and tradition to a particular region.

Already using what the brand is trying but expanding the range of

different regional delicacies..

Explore a wider range of sauces flavours to understand if some market segment has not completely

reached his maturity and fulfil it with new products.

Page 37: Italian grocery overview & focus on inCOOP stores

Could eventually put some other FiorFiore products on the shelf, if it is related to the

product and/or recipe we are suggesting.

Push a particular sauce related to the region in which it is being sold.

Interchange recipes with the extra FiorFiore products once every two weeks.

We can therefore differentiate small shelves by region.

Would be good if synced across Italy on FB for information, but can still be divided by

Category improvementSocial Media

Social media campaign about Fiorfiore products exists, but the shelf

positioning can be improved.

This would make it again more engaging for the customer.

Social Media

Page 38: Italian grocery overview & focus on inCOOP stores

Add feature to already existing apps or create new app which informs

you which sauce is available at your nearest InCoop though geo-

localisation.

If Geo-localisation is off:

– When installing app, you can put in your area of residence and

when there is a new offer it sends the new sauce and the page of

recipe suggestions to the person.

The offers can also be accessed through Facebook.

Category improvementNew Media Development

Page 39: Italian grocery overview & focus on inCOOP stores

Get people to post pictures of how they used

the sauces on Pinterest, promoting the contest

via Facebook FiorFiore page and reward

winners with Coop coupons.

Regional Challange: have different sauces in

different areas and then make a challenge

between the two.

Whoever wins gets the sauce on the

Category improvementNew Media Development

Buying the product + having the app, 10%

discount

Rating sauce after purchase, another 10% off

the next time.

A QR code can be used on the jar to scan it

immediately with the app and guarantee an

immediate and time-saving rating procedure.

– Can be applied to any particular label with a

premium price.

Page 40: Italian grocery overview & focus on inCOOP stores