When the overall portfolio of one of the world’s largest biscuit and cookie manufacturers began to decline in Brazil, Middlegame used established scientific processes and marketing insights driven by CIA® proprietary software to create a turn-around story with strategically revised trade promotions.
1 Situation Review
Examining all Ingredients in the Mix
An international cookies and crackers manufacturer was experiencing significant volume declines in the biscuits and cookies category in Brazil – sales were down 4.7%. By comparison, the client’s competitors were experiencing declines of 2.2%. While all distribution channels were experiencing severe decline, supermarkets, in particular, showed sales declining 3.4%, which represented the majority (64%) of the overall decline. More detailed analysis revealed that these supermarket declines were driven by losses of 3.0MM kilos in the client’s leading cookie brand, which was marketed primarily to children. In fact, its sister brands had actually made volume gains, which meant this cookie brand represented a startling 170% of the drop in supermarket sales. On a more comprehensive scale, the cookie brand’s loss in grocery stores represented 107% of the overall decline across channels.
2 Opportunity Assessment
Feeling the Crunch of Competition
Careful examination demonstrated that a change in supermarket secondary locations, on-deal conditions, and subsequent forward stock levels across competing brands correlated directly with the significant decline in the client’s cookie brand’s performance. The cookie brand had historically been underrepresented in all of these areas, but the data now confirmed that the brand was suffering disproportionate losses in both promotional opportunities and prominent product placement.
3 Scenario Definition
Fresh Strategic Insights Guide Competitive Marketing Decisions
Based on the data, Middlegame and the client agreed that the increased competition for the children’s cookie brand would require secondary locations and on-deal merchandising. Middlegame proposed several scenarios where the client’s portfolio would remain neutral in total trade support, but marketing resources would be allocated in proportion to the historical SKU volume for the cookie brand.
4 Expectation Analysis
Developing a Savory Solution
The reallocation of marketing support for the cookie brand in Brazilian grocery stores was expected to generate more than 10.1% in volume for the client’s entire biscuits and cookies portfolio. Middlegame used its proprietary CIA® software to accurately predict that such a change would impact the overall volume decline across all channels, resulting in a transition from -4.7% decline to a potential +8.5% increase.
5 Client Actions
The Sweet Taste of Success
The Middlegame analytics and insights enabled strategic client conversations across all disciplines for a holistic solution. The client was able to obtain hurdle rate approval from finance and joint efforts with the sales force assisted the client in applying operational constraints to the marketing strategy moving forward. The client was also able to realign its trade support budget with confidence to protect the brand in the future.