Trade Marketing & Category Management Introduction

Agenda Trade Marketing Overview Conversion Breaking through Category Management Know the Shopper Organize the Beer section Displays look of success

Why Trade Marketing and Category Management? Overload Extends into POC Environments... The same issue exists in POC environments… the number of choices for shoppers have in retail and consumers have in the on-trade has increased to record levels Think about how many BRANDS, PACK SIZES, PROMOS, PRICE etc there are on your next shopping trip For example in a supermarket there can be more than 50,000 choices available Or think about how many options there are on some menus… In these environments the reality is there is far more capacity than there is demand…

Brand Marketing and Trade Marketing Radio “Above the Line” = Mental Availability Impact how consumers think and feel about our brands Print/OOH Sponsorships Digital TV Integrated 360° POCM/ Packaging “Below the Line” = Physical Availability 1) Impact how shoppers behave and interact with our brands in retail 2) Impact how consumers behave and interact with our brands while on-premise Shopper Marketing What we do… SOW for TM Team Difference btw Brand and Trade Price /Promo Value Adds Customer Specifics Sampling/Experiential

360° Activation Retail and On-Trade Trade Marketing Key Focus Areas Shopper/ Consumer Insights Brand Strategies Customer Strategy Working with the brand team we focus on ensuring the intersection of these three key areas in order to enable you to execute with excellence 360° Activation Retail and On-Trade

= Drive Conversion Our Trade Marketing Objective... “Conversion” is simple way of describing our “objective” of turning shoppers into buyers of our brands/products Said differently we focus on how to “Create Demand” for our products in POC’s Sounds simple enough to do… but there is a significant challenge we constantly face…

Increasing Conversion Is Our Biggest Opportunity… Example - in a major Quebec retailer study 79% of shoppers in the beer aisle do not purchase Main Aisle 100% Enter Store (1384) 99% Pass Beer Category (1370) 19% Enter Aisle (262) 9% Total Interact (128) 9% Where There Are Challenges, There Are Opportunities Connecting with consumers and shoppers and creating loyalty is as challenging as it has ever been for consumer products manufacturers and retailers. Consider the following profile of today’s consumers and shoppers: • 68 percent are brand switchers4 • Only 5 percent are loyal to one brand5 • 73 percent shop in five or more channels6 • Only 26 percent are loyal to an average retailer7 Study products (125) 5% Physical Interact (74) 4% Select (54)

Our Challenge = Breaking Through… Today’s consumers are more time starved than ever and overwhelmed by a barrage of constant messaging We are exposed to > 6000 messages a day But we filter out 99% of these messages... Today there is a so much choice and so many messages its literally beyond our cognitive ability to process it all So our challenge with all this noise is to break through with our brands and be part of the 1% that doesn’t get ignored...

How Shoppers Make Purchase Decisions... Rational Objective Logical Analytical Conscious Controlled 5% Of Decision Taking Is Conscious Emotional Intuitive Random Subjective Feelings-based Unconscious Uncontrolled 95% Of Decision Taking Is Unconscious So how do shoppers/consumers deal with all the complexity, excess capacity, and choices out there? They ignore most things they don’t need or are not looking for… They don’t take very long to make a purchase decision its usually done in a few seconds at most… Said differently.. We only notice what we care about We only care about what we need To clearly demonstrate how our minds work this way - I have a simple exercise for everyone to try

Accessibility is all about… “Making our products easy to find and easy to buy” Trade Marketing Key Initiatives Retail Brand Activation On Trade Tech Sales

Make our products easy to find and easy to buy through Our Key Ask of You… Make our products easy to find and easy to buy through Flawless Execution Retail Brand Activation On-Trade Tech Sales Powerplay Coolers Quality Shelf Out of Category Display Towers POC Segmentation Brand Assortment Rotating Tap Won Lost POCs Distribution Shelf Share Display Calls Per Day POCE Superbowl Budweiser Hockey Long Weekends Sampling

Increase Availability, Shelf Positioning & Visibility Maximize distribution Win Total Share of Store Maximize Distribution Project Powerplay Optimize Portfolio shelf positioning (in-section) Assortment/Space Allocation/Balanced Portfolio/Planogram/Shelf Share Win total share of Store (out of section) POD Coolers Cross-Category Racks Make our products easy to find and easy to buy through Flawless Execution

Category Management Main Missions - Support Key Account Managers - Analyse market trends and performance - Create and optimize planograms - Track new products launches Main Tools

Know the shopper to better guide him in store Shopper Decision Tree Shopper Missions Customiz edplanog rams

Organize the Beer Section 1) Assortment definition 2) # of facings 3) Space allocation Segment Pareto New skus DOS calculation Space Allocation (# facings) Traffic/Agreements Brand blocking Sequence of brands

Multiple, critical factors are key to driving display performance Displays Look of Success Multiple, critical factors are key to driving display performance Display Guidelines Location Pricing Shop - ability Quantity Themed POS Size Most Effective Display Volume Pricing In all instances, displaying price on displays will deliver incremental beer volume sales in the POC When a display features a price reduction, it is imperative that the price is visible! Displays associated with a price reduction have a higher lift and generally deliver about 6% greater performance than those without price reductions Location – in order of effectiveness, the following display locations best drive incremental sales: 1 - In-Seasonal / Promotional Description: Large out of category display where beer is displayed with other seasonal products sold in store (ex. Summer promo with Budweiser, BBQ tools, BBQ Sauces & Spices, etc… ) 2 - Lobby Description: Open floor space located at the front of the store upon entry 3 - Aisle Description: Displays that are located within a fixed aisle (best to be placed next to complementary product, ex. Chips) 4 - End Cap Description: Display located on the end of a fixed aisle Themed POS - Themed POS helps target the undecided shopper by reinforcing the Display theme Size - A display’s size tailors the Display to the targeted Shopper Segment & enhances Engagement, Appeal & Purchase Intent

Displays Insights Displays influence undecided shoppers and increase purchase intent Over 50% of incremental dollars spent on beer are sold on feature displays Displays provide an improved shopping experience for consumers Educate and Inform Price Increasing the # of different segments on display within in a POC will drive incremental sales for that POC Display shop-ability and merchandising communications enhance shopper engagement and purchase intent

Displays How will it help us win? Stores with higher display support perform better! Displays will deliver incremental beer volume sales in the POC Provide excellent brand visibility

Displays Look of Success Location In-Seasonal/Promotional Lobby Aisle End Cap Pricing Price must be visible Bucket Pricing Themed POS Targets the undecided shopper by reinforcing the promotional offer

Displays Look of Success Shop-ability Height of Display % of Accessible Cases ‘Un-finished Display’ Quantity Case minimums must be met Size Core brands - large displays High End brands - small/medium sized displays Flank larger pack sizes with smaller packs

It is your turn to “Shoot The Puck!!!” Development is owned by Employees, Supported by Managers, And enabled by the People Department. How are you going to apply what you learned today in trade? Make Labatt products easy to find and easy to buy EVERYDAY!