Operations

OM – Profit Pools

Opportunity Mapping Profit Growth Corridors - Building a Strategic Profit Map.  

Priority :    0

Capability :    0

Statement

The System jointly constructs & evaluates market macro economic data & dynamics, synthesizing market realities and imperatives. Consumer, shopper, brand, package and omni-channel approach should be integrated to include B2C & B2B opportunities against System views. Documentation of selected portfolio growth corridors and profit pools are consolidated in strategic opportunity map.

Score

Low - Basic

Medium - Advanced

High - Expert

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High level category opportunities exist and focus on profit growth, as other measures such as trial or equity building are considered as part of the total System strategy.

Opportunity Map (focused on revenue growth) is a dynamic document which highlights portfolio growth corridors and singular innovator opportunities. Growth corridors and Innovator opportunities account for System Focus and their contribution to profitable system growth, while considering measures such as trial or equity brand building.

A formalized and dynamic process is used within an established routine to review it on a regular basis to identify future profit pools and revenue growth opportunities. The total beverage opportunity map is aligned and agreed upon.

Issues / Implications

Not all opportunities selected will focus on revenue growth, as other measures such as trial or equity building need to be considered as part of the total System strategy.

Evidence / Clarification

The Opportunity Map is a strategic document / process that highlights portfolio growth corridors and singular innovation opportunities for System focus and their contribution to profitable System growth.

Action It Leads To

Development of a formalized document identifying future opportunities in mid term (0-3 years) to long term (3-5 years) horizon.

KPI / Directions

Indicator: Category Growth Corridors. Directions: Opportunity Map.

Operations

OM – Innovation Pipeline

Opportunity Mapping Strategic Innovation Pipeline - Leveraging the Revenue Map as a System  

Priority :    0

Capability :    0

Statement

Opportunity Map is a core input into the formal and informal business planning and management routines to accelerate System business growth and innovation pipeline to be supported and grounded in shopper insights (shopper typologies / profiles etc. point-of-purchase behaviors & triggers etc.)

Score

Low - Basic

Medium - Advanced

High - Expert

.

Insights and opportunities are identified within the Opportunity Map to ensure ABP includes tactical mix and pricing initiatives to be leveraged.

The System leverages innovative and business disruptive opportunities identified within the Opportunity Map.

Opportunity Map leads to long-term Innovation Pipeline and is set as an essential part of ABP and LRP making 3-year bets.

Issues / Implications

Failure to leverage the insight and opportunities identified within the Opportunity Map will prevent RGM from being anything more than tactical mix and pricing initiatives.

Evidence / Clarification

The System leverages innovation, readiness and business disruptive opportunities identified within the Opportunity Map. Innovation opportunity sizing, pre-launch plans and post-launch evaluation

Action It Leads To

Utilization of the Opportunity Map / innovation as part of ABP.

KPI / Directions

Indicator: Consumer Growth Corridors. Directions: Opportunity Map.

Operations

OBPPC – Portfolio Architecture

Defining Segmented OBPPC Architecture  

Priority :    0

Capability :    0

Statement

From the full brand and package portfolio, the System articulates an occasion, brand, package and price architecture at a relevant channel/customer level. Integration of e-OBPPC with focus on B2C and B2B included that addresses consumer, shopper needs and occasions at points of purchase; whilst leveraging diversity in elasticity to optimize revenues.

Score

Low - Basic

Medium - Advanced

High - Expert

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Price strategy identifies potential areas to achieve revenue growth, reflects the difference in the value of each of the System’s, brands and addresses specific immediate and future consumption occasion needs.

This architecture is developed with exceptions against strategic imperatives for RGM and seeks to tailor the brand and package offer to meet different consumer and shopper needs according to consumer type, beverage needs, occasion, purchasing power & channel strategy.

OBPPC architecture process is considered the basis to articulate the foundations of RGM strategies.  Offers a balanced portfolio across channels, capitalizing on differences in elasticity to optimize revenue. Prevents leakage by differentiating brand/pack offerings and evaluating sustainable price differentials across channels. Digital OBPPC is used, embedded and operationalized by the broader community - Marketing, Commercial and Sales.

Issues / Implications

This step is critical to achieve sustainable, profitable revenue growth. Long-term view/perspective is set to build OBPPC architecture. Strategize on annual calendar/view and adjust as we approach each quarter taking into consideration macroeconomic context for each country.

Evidence / Clarification

This architecture is developed against strategic imperatives for RGM and seeks to: –    Tailor the brand and package offer to meet different consumer and shopper / Shopper needs according to consumer type, beverage needs, occasion and purchasing power. –    Reflect the difference in the value of each of the System’s brands –    Address specific immediate and future consumption occasion needs –    Offer a balanced portfolio across channels, capitalizing on differences in elasticity to optimize revenue –    Prevent leakage by differentiating brand/pack offerings and evaluating sustainable price differentials across channels

Action It Leads To

Development of process to articulate the OBPPC in line with RGM strategies.

KPI / Directions

Indicator: Pack Roles Architecture (Entry / Frequency / Premium). Directions: PvP (Price Volume Profit) / Rules-Of-Engagement Tool.

Operations

OBPPC – Competitive Pressure

OBPPC - Competitor Pricing Pressure  

Priority :    0

Capability :    0

Statement

There is a dynamic responsive process in place to respond in a structured way to customer or competitor driven pricing actions that could destroy the consistency of the pricing strategy and the potential for value creation across the market. eg AI based systems / competitive Rules-of-Engagement.

Score

Low - Basic

Medium - Advanced

High - Expert

.

Guidelines around customer pricing have been developed in accordance with the local framework and are in place, and are understood by both customers and the System (which is reactive to market pricing activities).

Clear guidelines around customer pricing have been developed in accordance with the local framework and the tactical guidelines to competitor activity (Rules-of-Engagement) are implemented by the System.

Rules of engagement scenarios are pre-defined to fast react vs potential future competitor moves. Pricing and margin tracking by channel and customer are dynamically monitored and used as foundations to ABP.

Issues / Implications

The System needs to ensure it is taking a leadership role in the level of returns across the whole value chain. Financials to establish thresholds for pricing.

Evidence / Clarification

Specifically, clear guidelines around customer pricing that have been developed in accordance with the local legal framework are in place and understood by both customers and the System. Clear guidelines around responding in a local and tactical way to competitor promotional activity (Rules-of-Engagement) have been developed and are implemented by the System.

Action It Leads To

The competitive pricing should have Rules-Of-Engagement to anticipate competitor price increases. This anticipation can then be used to develop rate / mix strategies for ABP. Pricing and margin tracking by customer.

KPI / Directions

Indicator: OBPPC direct / cross-elasticity. Directions: PvP (Price Volume Profit) / Rules-Of-Engagement tool.

Operations

Digital – Price Planning

Digital Pricing Development and Digital Portfolio TPO (online vs. offline)  

Priority :    0

Capability :    0

Statement

Interpreting digital competitive systems, strategy & pricing - The System optimizes long term revenues by setting elasticity-based pricing strategy for digital / e-commerce platforms - Pureplay, FSA, QSR, B&M.com, B2B based on the value of Coca-Cola and other brands to the consumer & country’s macroeconomic context; whilst recognizing the impact of competitor pricing on shopper choice. Price planning considers consumer price indexes (CPI), personal consumer expenditure (PCE) and market dynamics vs. competition.

Score

Low - Basic

Medium - Advanced

High - Expert

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Targeted pricing is set to avoid potential revenue loss per sale, sales versus competitors and cost to the System. Digital price & pack planning is tactical cost plus pricing and historical precedent for planning.

The System has identified brands/packs (Leader / Challenger / Explorer framework) targeted to compete with digital alternative offerings. Elasticity based pricing analysis and action planning are set to be coherent across channels / customers.

Digital price development, digital portfolio (TPO online vs offline) and coherency across channels are set in line with competitive moves. Optimization and sensitivity analysis are used to develop and validate strategic digital price by Occasion, Brand, Pack, Channel decisions. The analysis includes the price movements / differences build up and its effect on the total price for the total revenue plan.

Issues / Implications

Poor digital price planning and targeted pricing will cost the System lost potential revenue per sale, or sales versus competitors. Potential partnerships with complimentary product manufacturers to offer a more incentivized and enticing basket assortment (ie. snacks).

Evidence / Clarification

The System has identified the brands/packs targeted to compete in digital arena with alternative offerings and determined the admissible price gaps by occasion, channel and time of year. Sensitivity analysis is used to validate digital pricing decisions. Key issue in digital is product differentiation vs competition. Price movement for each time of the year as a postmortem to define related prices impacts in future.

Action It Leads To

Digital pricing analysis and action planning based on elasticities to connect with brand equity and possibility for “smart pricing” or price increases with/above inflation. What brands need support to build equity. What packages could be optimized to achieve price/L increases. Understanding how mix supports price increases.

KPI / Directions

Indicator: OBPPC Direct / Cross-Elasticities. Directions: Price Volume Profit / Rules-Of Engagement Tool.