Preparation of Presentation Please adapt the presentation prior to starting the seminar:

1. Remarks for Trainers • Preparation of Presentation • Please adapt the presentation prior to starting the seminar: • - Change left logo in the header • - Change date and trainer’s name/institution in the footer • Make these changes by clicking on ‘view’ – ‘master’ – slide master’ • Choose some of the tools at the end to open the workshop and free the mind of participants in between by shifting the slide to the position you would like to have it • General Remarks • To use this presentation for training • Please view slides by clicking ‘ view’ • Click ‘slide show’ • Press ‘page down’ to move through slides • Press ‘esc’ to stop at any time • To access support materials for trainer click ‘view’ and then click ‘by notes’ • There are trainer notes to help you to deliver the program

2. KLAS Retail Division „Marketing and Promotion“

3. A. INTRODUCTION

4. A. INTRODUCTION Contents A. INTRODUCTION B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS C. HOW MARKETING WORKS D. GETTING THE 4Ps RIGHT E. UNDERSTANDING THE MARKET F. MARKETING STRATEGIES G. IMPLEMENTING STRATEGIES H. PROMOTION I. MONITORING J. WORKSHOP FINAL

5. A. INTRODUCTION Timetable Saturday, 23. April 2005 09:30 Workshop Opening / Workshop 11:00 Tea Break 11:15 Workshop 12:30 Lunch 13:30 Workshop 14:30 Tea Break 14:45 Workshop 15:45 Summary of the day 16:00 End of day Sunday, 24. April 2005 09:30 Workshop 11:00 Tea Break 11:15 Workshop 12:30 Lunch 13:30 Workshop 14:30 Tea Break 14:45 Workshop 15:45 Evaluation 16:00 End of day

6. A. INTRODUCTION Training objectives • Throughout this day of training there will be • Theory • Exercises • Tools to take away • The intention of this training is to help you: • Understand how Marketing works for you and KLAS as a whole • Understand how Marketing can assist Stakeholders incl. you to achieve • business objectives • Understand the fundamentals of Marketing, including how to: • Understand the market climate • Develop a Marketing strategy • Develop and implement your Marketing strategy, including conducting • promotional and advertising activities • Monitor the effectiveness of your Marketing activities

7. A. INTRODUCTION Training needs analysis

8. A. INTRODUCTION Training targets, participation • Let us ask ourselves why we are here and where we want to go? • What is marketing and promotion all about? • What is a good marketing and promotion? • How can you use the tools of marketing and promotion in your daily • work? • What can you – as a part of the KLAS-family - do to market KLAS as a • whole and your shop? Let us make up a mind map about “marketing KLAS”

9. Advert. Advert Pricing A. INTRODUCTION Training targets - Let us make up a mind map about “marketing KLAS” Marketing Marketing Marketing

10. A. INTRODUCTION Problems faced by distributors, retailers and outlet shop holders Product not Suited to Market Limited Store Branding Irrational Store Location Lack of Advertising Capabilities Disorganised Implementation Poor Market Analytical Capability Insufficient Market Knowledge Imprecise Customer Information Limited Marketing Techniques Lack of Promotions Activities No Planning of Marketing Strategy Brand Conflict with Large Company Let us discuss which of the problems you have… Inefficient Marketing Communication Process Let us find a way to solve these !

11. B. MARKETING BENEFITS, DRIVERS, EXPECTATIONS

12. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS The business environment in the KLAS family • In this section, you will cover: • The benefits of Marketing activities to all Stakeholders (distributors and KLAS as • a whole) • How the nature of relationship impacts upon ability to conduct marketing • activities • How the environment leads to stakeholders having expectations of each other • How these expectations require stakeholders interacting to undertake certain • actions and work with each other

13. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Interdependencies between the company and retailers Depending on your relationship with KLAS, a range of Marketing activities may be applicable. Your business KLAS Large Interaction Close Relationship Your business KLAS Medium Interaction Medium Relationship Your business KLAS Small Interaction Distant Relationship

14. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Assessment of interdependencies between your business and KLAS Try to assess your relation to KLAS and the interdependencies • Relationship Criteria • Number of Large Companies you have relationships with • Number of other Distributors the Large Business has relationships with • Market in which you operate • Investment motive of KLAS • Technology & market position of KLAS • Existing agreements Quality of Relationship Your business

15. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Influence of interdependencies on marketing What are the tasks for the stakeholder depending on the interdependency

16. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Joint marketing – the only way How can the KLAS-family, your business and KLAS achieve positive results? To increase profit & market share and develop their brand, both Stakeholders are reliant on either party getting something ‘right’ and expect something from the others.

17. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Meeting expectations Benefits • Increased profit • Increased market share • Brand development KLAS Expectations Effective sales of existing and/or new products Better sales of products than the competition Sell products in manner that reinforces brand & pricing strategy Win-win situations • Distributor Expectations • Production of existing & new products that map to customer demand better than competitors • Win-win Expectations Action Required • Distributor Actions • Product - provide KLAS with input on customer buying habits • Price - liaise • Promotion - liaise with KLAS to conduct market research • Promotion - assess store locations and maximise customer interest • Promotion - develop and implement jointly a marketing strategy • Placement - liaise to ensure brand compliance & develop joint branding approach KLAS Actions Product - ensure existing & new products map to customer demand

18. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Interaction of benefits, expectations and action • Marketing benefits, Stakeholder expectations, and action required are interdependent: • Benefits give rise to Stakeholder expectations. • In order to realise potential benefits from Marketing, Stakeholders must successfully meet each others expectations • Stakeholder expectations give rise to action required. • In order to meet Stakeholder expectations, there are certain actions each Stakeholder must perform Benefits Expectations Action Required If either, or both, Stakeholders fail to deliver on the actions expected of them, marketing benefits will fail to be realised. First step of their counterpart is therefore to understand the expectations of the other counterpart.

19. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS KLAS / Distributor expectations If either, or both, Stakeholders fail to deliver on the actions expected of them, marketing benefits will fail to be realised … let us look at our matrix Benefits Expectations Action Required Distributor

20. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Marketing provides Win-Win outcomes for Stakeholders • What is Win-win? • Arrangement from which all parties benefit • Why is it important that no parties ‘lose’ ? • Fail to achieve full potential • Why is this important in the KLAS / distributor? • Marketing benefits interdependently realised • Rely on close co-operation to maximise outcomes / benefits • Linkages a cause of close relationships • The closer the relationship, the more partnership required

21. B. MARKETING DRIVERS, BENEFITS, EXPECTATIONS Case Study: A typical win-win situation! The maximum an individual team can get is 30 points, if the other gets nil. The maximum aggregate score of both groups is 40, if both play red each time.

22. C. HOW MARKETING WORKS

23. C. HOW MARKETING WORKS How Marketing works • In this section, you will cover: • What Marketing is and what it does • Why Marketing is important in your business environment • What areas of Marketing a distributor may influence • What activities a distributor must undertake to attract customers via marketing • How to undertake these activities

24. C. HOW MARKETING WORKS How marketing works • Marketing will • Create, • Increase, • Satisfy, and • Sustain customer demand • It will tell you: • Which customers to target • When to target them • How to go about targeting them • What products to target them for • How to get them interested in what you are offering • …but let us start in the past…

25. C. HOW MARKETING WORKS What exactly is demand? NEEDS PRODUCTS WISHES DEMAND MARKETS

26. Large quantity, small price Highest quality Make buyers buy Meet demand C. HOW MARKETING WORKS Small history on Marketing Aims / Targets Basic Idea Production orientation Customers will buy what is available everywhere and at low cost Product orientation Customers will buy the best, highest quality only Sales orientation Customers won‘t buy enough on their own. Producers and distributors will have a aggressively sell the products Marketing orientation Producers and distributors will have to find out the wishes of the customers and adapt products to these wishes

27. C. HOW MARKETING WORKS Marketing systems and their targets Maximum customer satisfaction Maximum consume Maximum offer Maximum living standard What is your and KLAS’ target ? Do they fit?

28. B. HOW MARKETING WORKS The 4Ps of Marketing Marketing Mix Channels Sites Stock Logistics Quality Extras Styling Branding Packaging Sizes Service Warranties Distribution (place) Product Market List price Terms of payment Price reductions Financing Personal sales Public Relations Advertising Price Promotion

29. C. HOW MARKETING WORKS What Marketing does • Marketing focuses on the 4Ps: • Product • Price • Promotion • Placement • Marketing will help you get the 4Ps ‘right’ • Once you have the 4Ps ‘right’ and you will create, increase, satisfy, and sustain customer demand. • …..which creates Stakeholder value

30. C. HOW MARKETING WORKS What can you do and what cannot be done • Tasks: • Think of your own work and try to give examples where one to three of the 4P seem to be right. • What solution can you think of to get them right? • Example: A Distributor selling sliced bread from their supermarket for €10 a loaf will not, despite the correct product, place and promotion, maximise sales due to having the wrong price • In general: Which of the 4Ps can you as distributors change?

31. D. GETTING THE 4Ps RIGHT

32. Task 5 Monitor Success D. GETTING THE 4Ps RIGHT The steps towards successful Marketing There are 4 to 5 tasks to complete to get your 4Ps ‘right’ • Task 1: Understand you market climate • Task 2: Develop a Marketing strategy • Task 3: Implement your Marketing strategy • Task 4: Marketing promotions • Task 5: Monitor the success of your Marketing efforts Task 2 Develop Marketing Strategy Task 3 Implement Marketing Strategy Task 4 Marketing Promotions Task 1 Market Climate

33. E. UNDERSTANDING THE MARKET

34. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET Aims of market research There are several aims of market research depending on if you are a producer, wholesaler, exporter, distributor… identification of new markets for new products new product development identification of new markets for existing products evaluation of market size for existing products planning promotion strategies planning market penetration strategies evaluation of potential competitors identification of shop locations evaluation market prices for special products Which are of importance to you as distributor? – and why?

35. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET Distributor’s steps toward understanding the market • Three steps to understanding the market / marketing climate: • Step 1: Plan market research • determine goal • plan data collection incl. data sources • collect data on the marketing environment • Step 2: Analyse market data/research

36. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 1: Plan market research • What do your want to learn about the market? • marketing environment • market size • customers’ wishes, preferences • price levels • market segmentation and market segments • possibilities of market penetration • Where do you get the necessary market data from? • internal data • external data • primary data • secondary data • Collection of data on the marketing environment

37. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 1: Plan market research - Data Sources • Internal secondary data • Internal data are data existing within KLAS and your retail shop and are the cheapest and easiest way to collect data on sales, prices, products performance etc. Sources are e.g. : • accounting record • sales records • management information system • External secondary data • External data are data existing already outside KLAS and outside your retail shop. Examples are: • demographical data • media: newspapers, the internet etc. • trade statistics

38. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 1: Plan market research - Data Sources • Primary data • Primary data are data that do not exist and that have to be collected. The can be collected by the KLAS-family as a whole or by single retail outlets. Primary data can include: • customer preferences / wishes regarding products and services • achievable prices • quality • possible sales quantities • Primary data can be collected by questioning existing customers or potential customers, by market observation or by test. • Let us concentrate on questioning customers and potential customers

39. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 1: Plan market research - Data Collection • Questioning existing and potential customers is based on questionnaires. The information can be collected by: • telephone (randomly call people in your area) • mail (sent questionnaire to randomly selected people in your area) • personal interviews (randomly interview people in your are on the street) • personal interview of shop visitors • written questionnaire to be handed to shop visitors • In addition observing customers in n your retail outlet and in competitors shops can give valuable hints! • What are the strengths and weaknesses of each of the ways of questioning?

40. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 1: Plan market research - Data Collection • Some important hints on questionnaires: • always remember market segmentation (also ask for age, gender, income…) • never start with personal questions (“how much do you earn a month?”) • remember that people intent to flee to the middle (always use an even number of possible answers to get a tendency • always keep in mind the aim of your market research • try to verify answers with similar questions at the end of the questionnaire • remember that open answers give people the chance to give their ideas but are hard to evaluate afterwards

41. Strengths Challenges & Issues • List all challenges and issues that exist with the current climate and methods of Marketing. • E.g. are people very cynical about advertising? • List the climate’s strengths as it relates to Marketing. • E.g. are people ready to switch products due to celebrity endorsement? Opportunities External Influences • List opportunities to improve the Marketing process. What market and opportunities exist? • E.g. is there little current guerrilla Marketing? • List external influences that have an impact on Marketing in general. • E.g. are consumers easily influenced by buying habits of another near-by country? Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 2:Analyse market data - Market Climate Matrix The market climate matrix shows the overall climate within the market

42. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 2:Analyse market data The market growth share matrix (Boston Consulting Group)

43. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Step 2:Analyse market data • The market analysis will show: • on which products to concentrate • how to calculate prices • how much to order and possibly sell • who your target groups are • target groups whishes and expectation • market penetration/(promotion needs and possibilities • The market analysis and understanding the market climate is the basis for the • development of a market strategy • Share information with KLAS to decide who will be responsible for certain • actions looking a the expectations and possible benefits

44. Task 1 Market Climate Task 5 Task 2 Task 4 Task 3 E. UNDERSTANDING THE MARKET • Case Study: Market estimation “Use of pampers in Switzerland” • How may papers are used daily in Switzerland? • Basis: 7 Million Citizens in Switzerland • Estimation: Children on average wear pampers for two years • Basis: Average live expectancy in Switzerland: 75 years • Calculation • Number of children wearing papers in Switzerland: 2/75 = 2,7 % = 190 000 • Estimation Daily use per child: 5-7 pampers (ask mothers) • Result: = 0,9 – 1,3 Mio • Reality : 1,15 – 1,25 Mio

45. F. MARKETING STRATEGIES

46. Task 2 Develop Marketing Strategy Task 1 Task 4 Task 3 Task 5 F. MARKETING STRATEGIES How to develop a marketing strategy • Marketing strategy tells you where you want to get to • Goals will impact expectations of KLAS • Need to share with KLAS • What is your goal? • Is this goal achievable? Check with KLAS • How you are going to achieve this goal? • …..so what goes into a Marketing Strategy?

47. Task 2 Develop Marketing Strategy Task 1 Task 4 Task 3 Task 5 F. MARKETING STRATEGIES Excurse: What is a target ? • Targets have to be defined including the fact that: • they have to be achievable • they have to be measurable • they have to be defined in terms of time • “I want to become rich” … is not a target: • OK, it might be achievable • it is not measurable as “rich” is not defined • it is not defined in terms of time – do you want to be rich in ten years or two days? • If targets are not properly defined they cannot be monitored and do • not lead anywhere!

48. Marketing Strategy • Product • Targeting • Positioning • Attributes Price - Product Pricing Promotion Place - Distribution Task 2 Develop Marketing Strategy Task 1 Task 4 Task 3 Task 5 F. MARKETING STRATEGIES What goes into your Marketing strategy?

49. Task 2 Develop Marketing Strategy Task 1 Task 4 Task 3 Task 5 F. MARKETING STRATEGIES How to develop a Marketing strategy • Product - Targeting • Divide the market into segments • Identifying the people you want to direct your marketing efforts towards • First issue to consider in marketing strategy • This ‘target group’ must coincide with the target group KLAS and the overall • KLAS concept

50. Task 2 Develop Marketing Strategy Task 1 Task 4 Task 3 Task 5 F. MARKETING STRATEGIES How to develop a Marketing strategy • Product - Attributes • Forms the basis of the positioning strategy • Represents attributes and benefits of the product • Product - Positioning • Message to target group • Captures message to imprint in minds of customers and • prospects • Describes product and how different from competition • Positioning statement tells customers why they should buy your product. • Sums up the product Brand