Driving executional excellence by leveraging new technology Winning at the shelf Driving executional excellence by leveraging new technology Sharon Skurnac, Nielsen Alejandra González, Kimberly-Clark October 1, 2014

MANUFACTURERS VS. RETAILERS Both have different structures that are constantly interacting with each other to satisfy consumer needs MANUFACTURER RETAILER Top Management Business Units / KAM Regional Managers Sales Force Operations Top Management Purchasing Central Warehouse Store Managers

Top Management Target assignment and results follow up A WELL-OILED MACHINE Each function needs to execute the strategy effectively to realize growth KAM & Catman Negotiation x Marketing Operations Sales Force Business unit strategies Trade Marketing Drugstores Supers Conv. Stores Traditional Strategy by channel Self Service Convenience Traditional x Strategies & Negotiations execution

PLANNING Vs. EXECUTING Different meanings by function EXECUTION BUSINESS NEED SOLUTION FOCUS IMPACT DURATION Plan execution by designing optimal strategies ROI Impact Market / Portfolio Long 1 Year + Detect competitors’ performance and opportunity detection Improve execution by detecting opportunities Compliance Retailer / Category Medium 1 – 3 Months Determine inputs to the strategy from real execution gaps Measure execution with robust key performance indicators Store Check Store / Item Short 1 – 7 Days Strategies to correct common execution gaps Trade/Brand Marketing Catman & Trade Field Sales

INTRODUCING NIELSEN MIRROW Nielsen Mirrow supports executional insights across all functions Product A Product B Product C Product D Turning mobile photos into actionable store insights.

Capturing the WHOLE store with Mirrow An all-in-one recognition tool ✓ Photo recognition ✓ Manual scan ✓ Questionnaires COLLECTION METHODS ✓ Primary shelf ✓ Secondary shelf ✓ Macro exhibits ✓ Displays & end-caps ✓ Coolers STORE LOCATIONS ✓ Modern trade ✓ Traditional trade ✓ Specialty stores CHANNELS

THE mirrow picture – multiple perspectives One market reality with multiple perspectives… LEVERAGED FOR BY Execution follow-up tool Top Management Strategy insights, opportunity areas detection Business Units/ Trade Marketing Negotiation tool Key Account Managers / Category Managers Performance / incentives / improvement tool Regional Managers Negotiation and performance improvement tool Sales Force Operations

KIMBERLY-CLARK diapers CASE STUDY

Kimberly-clark opportunity Single source of the truth for execution CURRENT PROCESS Multiple data sources Store-level insights limited (manually collected) and often slow to gather Competitive intelligence often limited to hearsay Disparate spending pools for promotion communications and execution Functionality-contained analysis of execution OPPORTUNITY WITH MIRROW All data from Mirrow Fast and full view of 700 stores Photo evidence and competitors’ activity One measure of compliance across KC enterprise Common language and view through entire organization

Nielsen mirrow – kimberly-clark Flexible tool to provide in-store insights KC NEEDS EXECUTION OPERATIONS COMPETITOR MONITORING PRICE TRACKING CATMAN FOLLOW-UP Quick Response Detailed Information Situation Evidence High Scalability KIMBERLY-CLARK EXPECTATION FOR IN-STORE MONITORING: Successful execution process with Multinational and Local Retailers Continuous follow-up for executional activities Incentives for sales force Execution performance feedback

Executional guidelines Ensuring end-to-end measurement and response to executional activity EXECUTION OPERATIONS Shelf & Special Exhibitions strategy compliance Brand communication Offers & promotions activation COMPETITOR MONITORING Competitor activity follow-up Promotions and offers activation Special exhibitions PRICE TRACKING Price strategy compliance Competitor price monitoring CATMAN FOLLOW-UP Planogram compliance

KC diapers case study - EXECUTION SUMMARY TOTAL MARKET – RETAILER #1 SCORE TREND BY INDICATOR J F M A M J J A S O N D Average overall execution with wide swings across metrics TOTAL COMPLIANCE OPERATIONAL EXECUTION SHELF COMPLIANCE COMPETITIVE INTELLIGENCE

Operational execution – scorecard TOTAL MARKET – COMPLIANCE BY KPI Retailer 1 not delivering on assortment, space or promotions TARGET RETAILER #1 RETAILER #2 PRODUCT AVAILABILITY 12 items avg by store 10 items 13 items NUMBER OF FACINGS BRAND 1 25 facings avg by store 26 facings LINEAR METERS BRAND 1 35 mts avg by store 32 mts 35 mts SPECIAL EXHIBITIONS 4 exhibits. Avg by store 2 exh. 4 exh. POP MATERIAL 80% stores 85% 82% PROMOTIONAL ITEM 90% 89% ACTION BY FUNCTION Sales, Key Account Managers: Negotiation compliance with Retailer Operations: Executional gap closure at store level Marketing / Trade: Strategy compliance, New item review Score by Retailer Total Market Score Retailer #1 Retailer #2 Operational Execution

Operational execution – scorecard STORE #1 – COMPLIANCE BY KPI TARGET STORE #1 PRODUCT AVAILABILITY 12 items 10 items NUMBER OF FACINGS BRAND 1 25 facings 26 facings LINEAR METERS BRAND 1 35 mts 32 mts SPECIAL EXHIBITIONS 4 exhibits 2 exhibits POP MATERIAL Presence PROMOTIONAL ITEM Operational Execution Store #1 Score Photo evidence of gaps to close by store

Store to-do list – operational execution Retailer #1 STORE #1 STORE #2 Correct OOS for Huggies Supreme Increase 7 facing units for Huggies Implement an island or end shelf in the store Increase +8 facings for KleenBebe Implement an island or end shelf for Huggies in the entrance STORE #3 Correct OOS for Huggies and KleenBebe Implement a special exhibition for KleenBebe in the entrance Top 3 items to correct by store focuses field reps and drives largest impact on outcomes

Competitive intelligence – scorecard TOTAL MARKET – COMPLIANCE BY KPI Competitive positioning impacted for price in Retailer 2 and promotions in Retailer 1 TARGET RETAILER #1 RETAILER #2 PRICE COMPLIANCE 15 items less than 5% variance to target 15 items 6 items SHARE OF FACINGS 25% KC 28% 30% ADJACENCIES IN SHELF Brand segment OK SHARE OF EXHIBITIONS 30% in checkouts 15% 30.% OF POP 40% in shelf 40% ACTIONS BY FUNCTION Sales, Key Account Managers: Retailer negotiation – get what was paid for Operations: Visibility on competitive focus by store Marketing / Trade: Opportunity and risk assessment Score by Retailer Operational Execution Total Market Score Retailer #1 Retailer #2

Competitive intelligence – scorecard STORE #1 – COMPLIANCE BY KPI TARGET STORE #1 PRICE COMPLIANCE 15 items less than 5% variance to target 10 items SHARE OF FACINGS 25% KC 28% ADJACENCIES IN SHELF Brand segment OK SHARE OF EXHIBITIONS 30% in checkouts 15% SHARE OF POP 40% in shelf 20% Competitors picture Competitors picture Competitors picture Competitors picture Store #1 Score Significant gaps in price and promotion in Store 1 need to be closed. Operational Execution

Shelf execution – what does the perfect shelf look like? Recommended shelf driven by business portfolio strategy, shopper research, retailer negotiations

Shelf execution scorecard TOTAL MARKET – COMPLIANCE BY KPI TARGET RETAILER #1 RETAILER #2 BRAND SEQUENCE 80% of stores with less than 10% of variance of sequence, according price strategy 80% 87% STAGE SEQUENCE 80% of stores with less than 30% of variance of small sizes at top, large sizes at bottom 14% BRAND STRATEGY 80% of stores with less than 30% of variance of All the stages for each brand 0% 12% Combined executional performance not meeting objectives in market Score by Retailer Operational Execution – 50% Total Market Score Retailer 1 – 33% Retailer 2 – 66%

Operational execution – scorecard Store #1 Score = 33% RETAILER 1 STORE 2 COMPLIANCE BY KPI   <10% of variance for sequence according price strategy <30% of variance of small sizes at top, large sizes at bottom <30% of variance of all the stages for each brand TARGET 15 items less than 5% variance to target 25% KC Brand segment STORE #1 6.91 % 44.4% 77.78% COMPLIANCE Incidents Huggies Space Reduced Unexpected Big-Size Formats Vertical Stages Implementation PLANOGRAM REALOGRAM 1 2 3 ACTION BY FUNCTION: Catman: Key stores follow-up, negotiation and strategy feedback/ Operations: Execution at store level and reaction/ KAM: Negotiation

Common shelf gaps across both retailers Impact to shopper perception of category due to shelf conditions Price & Brand Disorder Horizontal Stages Implementation New Big Size Formats Size Disorder

Assortment Compliance Retailer % Items Not Authorized But In Store % Items Authorized And In Store But Not In Store Retailer 1   Store 1 29.3% 24.1% 46.6% Store 2 36.9% 27.7% 35.5% Store 3 43.1% 30.9% 26.0% Store 4 28.8% 33.6% 37.6% Store 5 28.7% 26.6% 44.8% Store 6 26.9% 34.3% 38.8% Retailer 2 9.0% 79.1% 11.9% 9.9% 74.6% 15.5% 13.5% 67.6% 18.9% 4.8% 69.8% 25.4% 8.2% 71.4% 20.4% 10.4% 74.0% 15.6% Store 7 11.3% 75.3% 13.4% Store 8 9.5% 67.4% 23.2% Attempts to influence shopper behavior compromised due to lack of assortment compliance

Retailer 1 summary Planned strategy is not being followed by the retailer. Evaluate need to reopen negotiations, adjust internal plans, etc. Assortment in store not as planned. Evaluate retailer negotiations, pricing strategy, portfolio strategy. New Large-Size formats missing from stores. Increase focus on promotions and distribution. Close gap on size blocking within retailer.

Retailer 2 summary Overall good implementation of the strategy – getting what has been agreed and paid for. Good assortment compliance. Evaluate opportunity to test new products with this retailer. Tight focus on closing OOS in specific stores.