1. ECR-RUS Forum
June, 2nd-4th, 2010
Customer & Shopper Focus
as the Basis of Cooperation
Aya Tonoyan Kirill Ionov
Category Management Head of Space management
Ferrero-Russia etro Cash&Carry

2. Ferrero Group
Ferrero is a family owned company, based on the
overarching principle of achieving and maintaining
consumer satisfaction:
The Consumer is our king!
F.P.Fulci, Ferrero International
Vice President
Alba, Italy, 1942
Success Story Based on the Principles:
q Loyalty to the company values and principles at all times
q Identifying and anticipating Consumer s taste
q Constant Research and Innovation
q Always ensuring freshness of our products in the stores

3. Ferrero:
Quality & Innovation Leader in Confectionery
Best Innovative Ferrero Products in Russia:
q Confectioner #4 worldwide
q 38 countries
q 18 factories; 22 000 employees
q Annual Turnover: > EUR 7 bln
q Ferrero the World s Most
Reputable Company in 2009 -
Reputation Institute, NY
Ferrero - # 4 on Confectionery market in Russia Bringing Up-to-Date Technologies to Russia:
Up- to-
Russian Confectionery Market, Value shares, 2009*
United Dirol Cadbury
Confectioners 3% Others
13% 25%
Kraft 14%
Mars
Nestle 14% 18% (incl Wrigley)
14% Ferrero
Source: AC Nielsen, MAT DJ 2010 Factory in Vladimir - EUR 200 mln investment
* Incl. Packed Pralines, Chocolate Eggs, Bars, Tablets, Paste, Chilled Snacks, Refresh drops, Flour-based confec.(Ferrero segments)

4. Ferrero:
Shopper Orientation & Category Management
In Western Europe
q Acknowledged Category Management Expert in Western Europe
q Category Management projects with major European retailers
In Russia
q Professional Shopper Research & Actionable Insights with leading research
leading
agencies:
Pralines
Impulse confectionery
Chilled snacks
Chocolate Paste
q Focus on Shopper/Consumer oriented Cooperation with Retailers

5. Metro Cash & Carry
Mission:
METRO Cash & Carry is the
leading international
player in self-service
wholesale: customer-
focused, international and
innovative
METRO Cash & Carry, Russia
Operates 52 outlets in 36 regions.
Sales turnover in 2009 EUR 2,6 bln
Over 12 000 employees
Cooperating with over 5000 suppliers

6. Metro Cash & Carry.
Leader in Modern Trade Technologies
The range of METRO Cash & Carry
services all serve the goal of
anticipating what professionals need:
Øfrom recently introduced delivery services
Øto modern Trader Shop concept planning
Øto up-to-date customer promotion services
via METRO Mail
Customers success is the engine of our effort

7. Metro Cash & Carry:
Shopper as Focus of Today
Operational Excellence inseparably linked
with Customer Excellence
The work of the Space Management
Department is one of the bright examples of
interrelationships of different processes
on the path to Excellence
Customers success is the engine of our effort

8. Metro Cash & Carry:
Cooperation with Manufacturers
Introduction of Category Management in a business
tends to alter the relationship between
retailer and supplier:
the relationship moves to one of collaboration
exchange of information and data
joint business building

9. Pralines Shopper Research
A. Qualitative B. Quantitative C. Quantitative
exploratory stage: quantification of major In-store shopping behavior
revealing major patterns in shopping
patterns in shopping behavior
In-store verification of
behavior In-home interviews, category purchase details
- Focus-group discussions Moscow, Spb, R-on-Don by channel (N=1600)
(6)
(N=450) -Decision tree within each channel
- In-Store Observations -Shopping missions (purpose/ need)
- Details of shopping situation
- Category structure/ consumer understanding of
February 2009 the category - Shoppers behaviour in case if chosen product is
out of stock
- Shopping patterns (overall and relating to
category purchase) - Choice drivers
- Consumer typology (attitudes) - Shopper profiles by channel
- Store choice drivers - Basic feedback on POS and promo activities
(briefly)
- Key Retail Accounts profiles
- Store and channels evaluation (briefly)
End March-April 2009
-Basic feedback on POS and promo activities
-POS/promo concept ranking Moscow S-Petersburg Rostov-on-Don
Stores Interviews Stores Interviews Stores Interviews
End March-April 2009 Hypermarkets 4 200 4 200 2 100
100
Supermarkets 4 200 - 2
Discounters 4 200 4 200 4 200
Food-stores 4 100 - 4 100
*Covered both Boxes & Parcels Pralines
Total sample
700 400 500
9

10. Pralines Shopper Research Findings
Ø Majority of Choice Decisions
Taken in-Store:
41% planned purchase at general level
(pralines as category)
Ø Purchasing by Repertoir of
favourite brands:
Purchased in the last 3 months - >5
brands
Ø Most Popular:
- Raffaello box 150 g & impulse pack
- Korkunov box 200g *
- 3 parcels (all United Confectioners)
*Korkunov in 2009 had bigger volume share vs.
Raffaello
Source: IPSOS, Pralines Shopper Research, February & April 2009

11. Category Shopper Findings
IN-STORE
INTERVIEWS
q Primary purchase occasion
Ø To go with tea
(parcels and boxes ~ 100 RUR)
41%
q Festive occasions are still very
strong
Ø Guest & Parties (boxes) -19%
Ø Gifting (boxes) -17%
36%
Source: IPSOS, Pralines Shopper Research, February & April 2009, in-store interviews: 1600, Moscow, St. Petersburg, Rostov-on-Don

12. Category Shopper Findings
Ø Decision drivers: (%) Total IN-STORE
INTERVIEWS
I have already bought these 62
BRAND pralines and I like them
known product (62%), Specifics of taste and formula 45
favourite taste (45%) 33
Acceptable price
manufacturer/brand (27%)
Producer company 27
PRICE Good value for money 18
is also high at 33%. Producer country 12
Brand 11
Beautiful pack 9
I wanted to taste novelty 5
Another person asked me 4
Different tastes in one pack 4
Source: IPSOS, Pralines Shopper Research, February & April 2009

13. Category Shopper Findings
Ø Shoppers welcome in Pralines:
- wide choice
- clear shelf structure
- with navigation POSM
Ø Most Attractive promos:
- price-promos
- increased pack size
Ø Attractive Pralines presentation:
- Teatralisations
- Branded shelves, stands, dispensers
Source: IPSOS, Pralines Shopper Research, February & April 2009

14. Shopping Missions in the Channel
IN-HOME
For Several Specific product Grab & Smthng to Parties & Special INTERVIEWS
Stock up Days Top up for today Go indulge occasions For a kid
Metro 6.19 -1.90 -3.29 -3.44 -3.35 -0.44 5.78 0.18
Hypermarket 14.87 -1.33 -7.41 -8.38 -8.66 -0.86 11.89 -1.25
/ : Positive/ Negative fit between Mission and Channel
58% of Metro Customers are SCO (services, companies, offices & private demand) ;
11% - HORECA;
31% - Traders**
Knowledge of Shoppers Missions helps to Optimize
Store Main Missions in C&C and Hypermarkets:
s Assortment, Layout and Promotions Programmes
Stock-up & For Several Days;
Parties & Special Occasions;
Something to Indulge is present but not the strongest
Assortment:
Assortment
Popular brands
Big boxes for the Festive table and for Gifting
Medium and small packs for tea-drinking and to indulge oneself
Layout: should reflect package design & size;
Promotions:
Good deal purchase for frequent missions;
Striking promo-actions for seasonal occasions
14
Source: Ipsos Pralines Shopper Research; **Internal Metro Data

15. Categories Location
based on Shopper Missions
MORE IMPULSE PURCHASE
Pastry & Patisserie
Biscuits-Waffles-Ginger bread c asion «TEA DRINKING»
Traffic Flow
Biscuits-Waffles-Ginger bread
Chocolate Tablets & Bars
Parcels-Marshmallow-Fruit jellies
Pralines in Boxes MORE PLANNED PURCHASE
ccasion
«Gifting-Guests-Parties»
Tea & Coffee

16. Category Decision Tree
Category Layout Structured by brands:
1. Brand is a Clear Price indicator for many, hence, display separately
medium and premium brands.
2. Within planogram of each brand a clear structure of SKUs by
weight/size
3. Parcels & Boxes to be laid out in different aisles.
Source: IPSOS, Pralines Shopper Research, February & April 2009

17. Visual Anchor of the Category
Visual
anchor through the strongest
brand in the category
q Raffaello as the Boxes Anchor
Brings shoppers in the aisle
Helps to orientate
Traffic Flow
*Raffaello = 100% brand awareness, >17%* market share
Brand of the Year in Pralines in 2009
Source: Nielsen Retail Audit, National Urban, Sept-March 2010

18. Shopper Based Concept Accounting for:
q Occasions & Missions
q Shopper Decision factors
(Decision tree)
q Brand as recipe and price tier
q Visual Anchor

19. Shopper Based Layout
Visual Anchor
Visual Anchor
Traffic Flow

20. Planograms Based on:
Sales in RUR
Sales in MetroUnits
Total Income
Shelf Stock coverage
Professional assortment
Own Brands

21. New Concept Implementation Results
Department manager: It s excellent
I asked: Why?
Department manager: Now I know where to put each
item and suddenly customers see the products much
better

22. New Concept Implementation Results
Store staff knows exactly where and how many facing to
put of each item
No more guts feeling but planning
Increasing Department manager s productivity:
- saving up to 20% of time, previously spent on
shelf-wars with suppliers
Planogram effect in Turnover Growth + 3% in this
category (implementation case in SPb)*
* Source: Metro Internal data, 1 month past implementation in SPb excluding seasonality

23. Key Learnings
q Include in the project Market or Shopper
based Targets for Shelf Share/Inventory
Optimization
q Plan a compact ad-hoc shopper research
for more accurate assessment of project
results
q Navigation brings emotions and clear
structure in shopping

24. Next Steps
q Study more Market & Shopper potential
information
q Update and Follow-up for planograms
effectiveness
q Consider navigation materials for easy
and pleasant shopping

25. Thank you
«Ferrero-Russia» Space management « etro Cash&Carry»
aya.tonoyan@ferrero.com Kirill.Ionov@metro-cc.ru