Boosting Business Through Marketing

Lauri Peltola

“Responsibility combined with a strong identity and appealing brands will be an increasingly central requirement in every business line”

Recap of Kesko StrategyProcess

“Kesko will have to continue its responsibility work and strengthen its corporate identity and core brands”

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2.5

2.0

1.5

1.0

0.5

0.0

Start 2007 2008 2009 2010 2011 2012 2013 2014 2015

BV/EV > 30%Top 10 BV/EVAAA BrandsAAA Brands (US Only)S&P 500

Long Term Value Growth of Highly Branded Companies and the S&P Average

3

%

Unified Brand Identity

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Change the content marketing

• Shift focus from the tactical price&productcommunication to the long term strategicmarketing to grow the preference and the market share

• Increase the share of targeted marketing based on customer data

• Renewal started with K-Markets in 5/2016

• More extensive renewal of the grocery trademarketing is being set up

New K brand and identity for consumers

• Beginning with K-market/SLK conversion 5/2016

• Plussa renewal 10/2016

• Other grocery trade chains 2017

• K-rauta Q1/2017

• Cross marketing possibilities being investigated with the car trade

Measurement and efficiency

• Measurement of the marketing efficiency (ROMI)

Target Is to Unify All K-chains Brand Core and Marketing Communication

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Strategic Spearhead Projects of K-Group Marketing

Strategic objective Target level

Fundamental renewal of the grocery trademarketing

+1.0% growth of the market share by increasing the preference by+2.8%

K-rauta – brand and identity renewal Preference growth of +2-4% depending on the present situation of different markets.

VW brand preference comeback Return of Volkswagen to #1 in the brand preference and level of >30

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K-brand Value in EurosValue according to Brand Finance was €886m in 3/2016

Growth from previous year 42%

The fourth most valuable brand in Finland after Nokia, Kone and IF

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Promise:

FOR SHOPPING TO BE FUN

Value driven processes:CUSTOMER AND QUALITY IN

EVERYTHING WE DO

Objective 2019:

THE MASTER OF INSPIRATIONAL CUSTOMER EXPERIENCE

K makes everyday life easier and inspires customers to reach the dreams. We predict customers’ needs and serve the customer exclusively throughout life. We make our

best to make shopping fun.

Goals:

Growth of market share through the brand preference

One KINSPIRATION RESPONSIBLEPERSONAL

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“Half of our marketing spend is wasted, we just don’t know which half.”

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Three Ways to Improve ROMI

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Metrics• Based on strategic objectives

ROMI• How to improve sales with the same

marketing investment

Campaign analytics• What is the desired impact• Which products & personal offers lead

to the best result

1

2

3

Execute campaign

Learn from the past

performance

Optimise future plans

Starting Point is Different for Each Chain

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Source: K-Digital Short-term impact of marketing

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Percent of sales volume explained by source (%) 100

80

60

21

85

15

88

12

89

11

90

10

92

8

94

6

0 Base sales

Incremental sales due to marketing

36

64

60

4061

39

63

37

68

32

69

3140

30

71

29

74

26

78

22

7970

SupermarketROMI

There Is Room for Improvment in the Current Marketing Investment

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6%19%

22%

33%9%

16%

8%

3%

19%

4%20%

20%16%

6%

Total Invested Value Contributed

Thursday Leaflet Offer

Wednesday Leaflet Offer

Monday Leaflet Offer

Postinen

Newspaper

TV

Adform Display

Marketing activities investment vs. value contribution

Source: K-Digital

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