Kesko CMD, EVP Lauri Peltola's presentation

1. Boosting Business
Through Marketing
Lauri Peltola

2. “Responsibility combined with a strong
identity and appealing brands will be an
increasingly central requirement in every
business line”
Recap of Kesko Strategy
Process
“Kesko will have to continue its responsibility work and
strengthen its corporate identity and core brands”
2

3. 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/EV
AAA Brands
AAA Brands (US Only)
S&P 500
Long Term Value Growth of Highly Branded Companies and
the S&P Average
3
%

4. Unified Brand Identity
4

5. Change the content marketing
• Shift focus from the tactical price&product
communication to the long term strategic
marketing 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 trade
marketing 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
5

6. Strategic Spearhead Projects of K-Group Marketing
Strategic objective Target level
Fundamental renewal of the grocery trade
marketing
+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
6

7. K-brand Value in Euros
Value 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
7

8. 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 K
INSPIRATION RESPONSIBLEPERSONAL
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9. “Half of our
marketing spend is
wasted, we just don’t
know which half.”
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10. Three Ways to Improve ROMI
10
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

11. Starting Point is Different for Each Chain
11
Source: K-Digital
Short-term impact of marketing
20
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
40
61
39
63
37
68
32
69
31
40
30
71
29
74
26
78
22
79
70

12. Supermarket
ROMI

13. There Is Room for Improvment in the Current Marketing
Investment
13
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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