Winning the On-Shelf War

Graphic Packaging International

Winning the On-Shelf War

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Any reproduction or distribution to any 3rd party is strictly prohibited.

What are consumers not telling you about your brand?

What is the “value” of on-shelf differentiation?

What are consumers looking for on-shelf and
how will they find you?

How can emerging technologies create differentiation?

Any reproduction or distribution to any 3rd party is strictly prohibited. 2


What are Consumers Not Telling You?


Where is my Brand?
Is It Worth the Price? Why is this Section so Disorganized?
I’m Confused
Is There a Better Alternative?
I Think the Store Brand
is Just as Good.
Why is this Better than the Others?


Consumer Segments
Baby Boomers
Born 1946 – 1964 (’45–’65)
78 million adults*
Age 41 – 59 in 2005
Matures
Born 1945 and earlier
50 million adults*
Age 60+ in 2005

“Seniors”
Millennials
Born after 1978 (’80–‘00; ’81–’95;
’82+)
113 million individuals*
“Gen 13” Age 27 and under in 2005

Includes Babies, Young children,
Tweens, Teens, Young adults

Generation X “Net Generation”
“Echo Boomers”
Born 1965 – 1977 (’65–’80)
(N-Gen) “Generation Y”
53 million adults* Born ’77–’02 (’78–’89, ’78–’95)
71 million individuals
Age 28 – 40 in 2005
“Generation 14”
“Bridgers”
“Generation D”

* Population estimates based on data from the U.S. Census Bureau in The Statistical Abstract of the U.S., 2004-2005


Consumer Trends that Affect Purchase Behavior
1. Comfort
Looking for Familiar and Safe
Experiences from the Past
2. Consumers Shift from Accumulation
to Protection
More value focused
Warehouse club growth
Growth Private Brands
3. Convenience
Ease of package use and
time constraints
4. Health and Wellness
Aging global population
5. Shelf Impact Leading to Impulse Sales



Branding and Differentiation
Package Innovations that Respond to Consumer Needs
New Design Innovations
Before After Yogurt in a tube Value Created
• Supports 38% price premium over standard
Yogurt cup
• A convenience snack, GoGurt serves far
more eating occasions

Commodity, Differentiated, • Large mouth “chug” is a huge hit with users
large bottle
single serve • Milk wins new shelf space in C-stores
C-
bottle “to-go"

New 2X6 “Fridge-Vendor”
Standard
• 25% jump in 12-pack sales, 10% in can sales
12-
3X4
multipack
• Fits better on a fridge shelf – cans stay cold

7


Branding and Differentiation
Package Innovations that Respond to Consumer Needs
New Technical Innovations
Before After Value Created
Screw-cap
Traditional, • Shelf-
Shelf-life increased by 10-20%
10-
spout
gable-top • Easy to open for kids & senior citizens
cartons

Loose Salad-in-a-bag
• Supports higher price point
produce
• Improved branding
• Greater Convenience

In-store butchers
Centralized
meat- • Cuts labor costs, frees shelf space
packaging • Single-
Single-serve portions
facilities

8


Platform Innovations that Respond to Consumer Needs
Winning at Microwave Strength Barrier New Age Beverage
Retail Dispensing
Shelf impact Convenience Durability/Tear Res. Freshness Increased Sales
Impulse Buy Brand Exposure
Trends

On the go! Stacking Strength Extended Shelf Life
Brand Recognition Ease of use Source Reduction/Cost Sustainability Convenience
Retail Marketing Time Saving Reduction/Sustainability Sustainable Option
Healthy Eating Retail Marketing


Call In Number: 1 (866) 528-2256
Winning the
Participant Code: On-Shelf War
458-7536

Brand Blur
Consumer Purchasing Trends
Accidental Purchases
1. 70% of consumers have purchased the wrong product in the past year
2. 60% have trouble differentiating products on shelf due to packaging

Source: MediaPost News, October 28, 2009



Brand Blur
Consumer Purchasing Trends
Consumers Trading to Store Brands (McKinsey Study, Dec, 2009)
1. 18% of consumers admit to trading to lower-priced brands in the last two years
2. 46% of consumers said that these products performed better than expected
3. 34% of consumers said they no longer preferred higher-priced products
4. 41% of consumers said that while they preferred the premium brand,
it was “not worth the money.”

Store Brand Value growing in the U.S. (in the last year) (2009 Ipsos MORI Study)
1. 7 out of 10 shoppers believe that Private Label Products are as good, if not better
than the National Brands
2. 40% consider themselves “frequent” store brand shoppers
3. 50% of all consumers say that their basket contains 25% or more of store
branded products.



Brand Blur
The Evolution of Store Brands
Budget Cheap Genuine Category
Alternative “Me-Too” Competitor Partner

Private Label is Private Label imitates Private Label becomes a Together, the manufacturer
store’s value brand the brand leaders in valid branded offer in its and retailer take a holistic
an attempt to own right, often inhabiting category management
generate a “rub off” a position of strength where approach based on deep
effect by association. manufacturer is weak or shopper insights, with total
the market is fragmented. category growth in mind.



Brand Blur
The Evolution of Store Brands

“Many store brands are moving away from
the copycats to their own brand
identification, and shoppers are now aware
enough of store brand quality
that they don’t have to rely on copycat
(packaging) for accidental sales.” Brian Rafferty, Brand Union



Brand Blur
Private Label as Competitor




What are consumers looking for on-shelf
and how will they find you?




Creating Value On-Shelf




Packaging as a Critical Component of
the Integrated Marketing Mix

On-Shelf Differentiation
Creating Trust
Establishes “Value” (Clarity and Brand Promise)

Engaging the Consumer in “Real-time” with the Package
to Grow Equity
Tying together the Digital Experience and the Package Experience
Creates a “New” Brand Experience



Printing Enhancements to Gain On-Shelf Differentiation



Shape as a Differentiator



New Printing Technologies Become Accessible
Holographic Coatings (Cast and Cure)
Metallic Effects (in-line Cold Foil application)

No Coating Cast and Cure



New Tools That Create Brand Value



Engaging the Consumer
in “Real-time” with the Package
to Grow Equity.

Tying together the Digital Experience
and the Package Experience Creates a
“New” Brand Experience



Integrated Mobile Marketing Facts
200+ Million Americans carry mobile phones
– over half the country’s population.
Cell phones are used by over 3.1 billion people globally.

40% of Major Brands have deployed text messaging (SMS) campaigns.
18% of Major Brands have deployed multimedia messaging (MMS) campaigns.

The Mobile Marketing and Advertising market will be valued
at over $5 billion by 2012.

In August 2007, nearly 40 million US Consumers received SMS advertisements,
and 12 percent responded to them.



Mobile Marketing Trends for 2010
1. Text message marketing goes mainstream
2. Texting will be offered by local media
3. Retailers will move beyond mobile marketing to enhance the overall
shopping experience.
4. Smartphone applications will create new ways to engage customers.
5. Optimized mobile web sites become affordable and customized.



Augmented Reality
Picks up where Virtual Reality
leaves off, but without the bulky
glasses. At the outset, this
technology looks like it will fall
into the category of
entertainment and information
to produce things like three-
dimensional maps, store
locators, travel guides, etc.



Interactive Codes and Two-Dimensional Barcodes
These are all about consumer interaction and giving consumers
more opportunities to interact with brands. Participation in
Loyalty Programs, Instant redeemable couponing, etc. are all
part of the mix.


Key Take-Aways



Key Take Aways

“If people feel a strong emotional
connection with a brand, they will remain
loyal. But, squeezed by economic
uncertainty, that emotional connection
gets tested, strained even. To maintain –
and strengthen – this connection through
a recession, companies must remain
dedicated to building their brand.” Warren Baxter



Stick to Your Long-Term Goals.

1. Deviating from your brand strategy by
running “urgency” campaigns designed
to create quick sales may help short-term
cash flow, but loyal customers may view
it as cheapening your offer to the market.



Maintain or Increase Your Marketing Budget.

2. When the market goes quiet, successful
Brands typically increase their presence
with strong branding activities.



Be Authentic. Don’t Dilute Your Brand.

3. Focus your company’s efforts on
maintaining or increasing its brand presence
in an authentic manner that is consistent
with its promise to the consumer. If your
brand is about luxury and exclusivity,
offering low-end products to attract more
buyers will only decrease consumers’
perceived value of your brand.


Think Beyond Advertising.

4. Branding covers all of the touch points
between your business and your
customer, from your direct mail to
packaging to website to office and retail
environment. Every touch point is part of
your brand – Consider how changes in
your company’s activities and structure
may affect your customers.


Deliver on Your Brand Promise.

5. A recession is an emotional time –
consumers need reassurance that they
are making the right choices. If your
marketing activities create mistrust by
under-delivering on their expectations of
your brand, consumers may switch to a
safer alternative.



Key Take-Aways

“At times like this, people are more
particular about where they spend their
money. A company’s brand is its promise,
as assurance of the best choice – any lack
of authenticity or failure to deliver on that
promise diminishes the brand and has
direct financial implications” World Advertising Research Center



Thank You


Winning the On-Shelf War

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