"Earnings are strong, sales are another story"...or so said The Wall Street Journal recently. As they reported, "a record number of US companies beat earnings expectations in the third quarter, but a big portion of their profits came from cost-cutting, disappointing investors who were hoping for boosts in revenue."

Translation? In this economic environment offering scant promise of overall category growth, coupled with retailers' stated objectives to trim brand/product offerings, companies (and brands) should brace themselves for an all out market share land grab in pursuit of elusive revenue gains. Certainly developing a precise understanding of Demand is invaluable in fueling significant top-line growth – whether it be through refining brand communications to better align with target consumer demand, or optimizing your product offering and pricing to fully address their needs – but when you are actively locked in a battle for market share, few things are more valuable than your front line employees. They are the people on the ground who ensure your brand is "RIGHT AT RETAIL" to capture the big wins. Truth be told, the big wins that move market share, revenue and profits in the right direction, are usually realized through an unwavering, persistent focus on the details, including the retail shelf.

While our work with clients begins by developing demand-driven strategies, one area of implementation we often assist clients with is managing the ongoing, in-retail execution of these strategies (this work often includes their distribution partners as well). Our experiences in this regard have spanned industries as divergent as consumer food products to consumer durables, from creative crafting to financial services, from working with the retailers themselves, to the manufacturers, to nearly every entity along the value chain.

To illustrate, let's consider a nearly $300 million CPG brand, purchased by one of the nation's leading food and beverage companies. At the time of purchase, the brand had no clear brand positioning, or even target consumer understanding, but yet was expected to meet very significant growth targets over the next two years. The management team engaged The Cambridge Group to develop their growth strategy and to help implement it, to ensure that the company would achieve their aggressive growth and profitability goals. The team developed the Demand LandscapeTM which identified the core motivational segments in the category, as well as the priority targets for the brand. In addition, the team leveraged our Consumer Demand AnalysisTM approach to quantify the growth opportunity and the means to attain it. Finally, the team worked with their distribution partner to ensure optimal execution at retail. At a high level, the team recognized that long-term growth for the brand hinged on three distinct strategies: Sharpening the brand's positioning from a general health message to a very compelling and specific heart healthy message Growing consumption among current core users Driving trial and adoption among prospect segments To achieve these goals, the team realized that it needed to ensure that the brand was "Right at Retail", including: Refining Point of Sale (POS) materials to communicate key benefits (including heart healthy) in a manner most motivating to target consumers, and best able to drive trial Growing distribution outlets to fuel sales among core users and prospects Addressing out-of-stocks to ensure product availability for core users and prospects Optimizing promotional effectiveness to maximize returns and increase penetration with prospects Optimize POS materials: The biggest challenge facing the team was the POS environment. First, they had to convince retailers that their brand would have much greater success if it moved from the "health" aisle and was placed right next to the mainstream product it was a healthy alternative for. Placement significantly raised awareness for our client's brand, but that in and of itself was not enough. The team also had to optimize POS communications to be most motivating to target consumers – addressing key benefits (including heart healthy) in order to drive consideration. Finally, the team created targeted sampling programs by offering trial sizes for consumers to take home and taste. Invariably, when these prospective users took the product home to try, they became repeat, and often core users. Grow distribution outlets: The team also recognized that increasing distribution outlets was critical to meeting its revenue target. It was clear that expanding product distribution to warehouse and discount channels was critical to reach brand prospects, but it was also apparent that there were other incremental retail stores that should be prioritized given their relative financial worth. As the team came to realize, the top 10-20% of store fronts drove nearly 70% of profits...getting it right at those specific stores would provide disproportionate reward for the effort. Not surprisingly, Nielsen data proved invaluable in the identification of these top retail stores with disproportionate share of category revenue (and oftentimes profit). Truly, a straight-forward analysis, but one that quickly ensures that front line employees know how to prioritize retail outlets with the highest likelihood to provide return. Address out-of-stocks: As the team came to realize (leveraging both Nielsen and internal data), of the nearly 200,000 grocery facings the brand maintained, on average they were experiencing nearly 20% out-of-stock rates. Clearly this was a concern...if the product wasn't there, it couldn't be sold. The brand undertook a facing expansion program, through which their distribution networks were incented to expand facings. Specifically, an incentive was provided for each new facing obtained...the facing could be for the existing product, or any of the new flavor and/or package offerings the brand had launched to fuel growth. With the incentive plan in place, the team carefully monitored their progress through Nielsen and internal data. After less than four months, facings were up nearly 60%, and the out-of-stock rate was hovering around 5%. Grocery revenues, for example, accelerated 15%. Optimize promotional effectiveness: Finally, the team recognized that the cost of promotions per incremental case sold was 15%, and generally was resulting in a ~31% lift. Working with Nielsen and distributor partner data, the team was able to conduct a full scale analysis to optimize sales, volume and profit and align with retailers' strategies for the category. Leveraging the robust data available, the team was able to finely tune the best promotional depth, duration and frequency (calendar timing) to maximize returns. Ultimately, the promotional cost per incremental case was reduced by 25%, while the lift simultaneously was increased to nearly 61%, resulting in a net savings to the trade of nearly $6 million dollars.

The overall result of these collective efforts? The brand realized a 2X revenue growth in 24 months, the market share grew from 55% to 70%, and trial increased by nearly 30% over a three month period. Sizeable "big wins" realized by addressing the micro-level details. In a market environment sorely lacking in revenue and market share gains, perhaps it is time to investigate the unique capabilities and insights the collective efforts of The Cambridge Group and The Nielsen Company can provide. If you are interested in learning more about how The Cambridge Group can work with your management team to ensure you 'get it right at retail', please contact us at 312-425-3600, or visit us at www.thecambridgegroup.com.