3. Driving profitability by
creating and capturing value
for the Coca-Cola System.
An Introduction
to OBPPC
Architecture
Occasion Brand Package
Price Channel
4. 7OBPPC – Occasion Brand Package Price Channel Architecture
Metrics
The Shelf-Savvy Tools Series is intended
to provide you with information about
the different ways we create value at retail
for all the stake-holders in our System.
Each book explores a different topic in
depth, and provides you with resources
and tools to help you put the content
into action.
Use these books as a reference, as a
repository for global best practices, and
as a refresher.
Differentiating
Brand / Pack
Strategy
Commercializing with
Customers
Activating for
Retail Impact
Prioritizing Shopper
Opportunities
Picture of
Success
Shelf-Savvy
Tools Series
5. 9OBPPC – Occasion Brand Package Price Channel Architecture
All shoppers are different. They have
different values and different preferences,
which lead to different price elasticities.
We can create value by recognizing the
differences in purchase occasions, and by
offering a unique assortment of brands,
packages and price points for each channel
they are served by.
We design OBPPC architectures to create
value by considering three core principles:
Define distinct package roles
Each package plays a distinct role in driving Incidence,
Transactions, or the Amount of a transaction. By defining
roles for each package, we can build a proposition to
grow our holistic business.
Capture unique shopper needs
Shoppers have different motivations at each occasion
and channel. We can capture the value of each occasion
by defining the package roles to best serve each unique
shopper need.
Differentiate across channels
Each of our customers serve different shoppers with a
unique retail experience. We can help them to be more
effective by differentiating our OBPPC offering across
channels and customers.
An Introduction
to OBPPC
Architecture:
Overview
7. What 13
OBPPC is a critical
element of shelf-savvy
marketing.
For each Occasion,
it defines the optimal
Brands, in the
appropriate Packages,
at the right Prices, in
the target Channels.
OBPPC – Occasion Brand Package Price Channel Architecture
9. OBPPC enables us to
move the demand curve
and sell more products
at higher prices through
segmentation and
differentiation.
Why
price/L
volume
Before
After
17OBPPC – Occasion Brand Package Price Channel Architecture
OBPPC Impact on Demand Curves
10. 19OBPPC – Occasion Brand Package Price Channel ArchitectureWhy
OBPPC captures value
by considering consumer,
shopper and customer
motivations.
It provides different packages, at different
prices, for different segments to the extent
that it can be executed by our System.
11. Limited
assortment
and price
point variance
Unique needs
only met for
some shoppers
Some consumers
paid less $/L
than they were
willing to
Why
Good OBPPC drives
both volume and
value by aligning
offerings with
shopper needs.
21OBPPC – Occasion Brand Package Price Channel Architecture
Before
OBPPC
ShelfVolumePrice/L
Differentiated
assortment,
with segmented
price points
Needs of
all key
shoppers
are met,
incidence up
The price
requirement
of all
shoppers
is met
After
OBPPC
Shoppers drive
volume
by making
purchases.
We optimize
value through
segmentation,
driving price/L.
12. Good OBPPC offers
both short and
long term benefits.
23OBPPC – Occasion Brand Package Price Channel Architecture
Short term
Eliminates short
term price
fluctuations by
increasing pack/
price diversity
Reduces risk of
commoditization
Reduces reliance
on few packs
Long term
Builds a long term
franchise by
capturing unique
needs for
multiple shoppers
Addresses customer
pricing differentiation
needs
Reduces channel
leakage by providing
specific Pack/Price
architecture by
channel
Why
13. Good OBPPC
consistently delivers
strong results.
25OBPPC – Occasion Brand Package Price Channel Architecture
Profitability
Volume share
Revenue share
Revenue /
uc growth
Number of
transactions
Source: Selected data from over 25 internal case studies 2003-2008, AC Nielsen
Why
14. Good OBPPC is
strategically planned
for the short and
long term.
27OBPPC – Occasion Brand Package Price Channel Architecture
Short term
Meets today’s
execution
capability
Reflects today’s
retail reality
and shopper
landscape
Focuses on
quick wins with
existing packages
plus price point
changes
Why
Long term
Plans for enhanced
execution capability
Anticipates tomorrow’s
retail reality and
landscape
Plans innovation for
tomorrow’s packages
including consid-
erations of capital,
Route to Market,
and staged price
increases
15. How do we
develop a
good OBPPC
strategy?
3
29OBPPC – Occasion Brand Package Price Channel Architecture
16. 31OBPPC – Occasion Brand Package Price Channel Architecturehow
OBPPC planning is an
integral element in DNA:
The Coca-Cola Way
of Marketing.
The goal of marketing at TCCC is to combine art
and science to build Brand Love and BrandValue.
From a marketing perspective, OBPPC starts with
the occasion. From a commercial perspective, it
starts with the channel or customer.
We use elements from Brand and Portfolio
Plans to tailor the OBPPC to accomplish both
our marketing and commercial objectives.
Opportunity Identification
Prioritize channels, categories,
and occasions via Profit Mapping
OBPPC Architecture
Defined category and channel architecture
according to occasions
In-Outlet Picture of Success
Customized with marketing elements
and Customer sell in story
17. 33OBPPC – Occasion Brand Package Price Channel Architecture 33OBPPC – Occasion Brand Package Price Channel Architecture
Away from
Home Meals
Channel
On The Go
At Home
Leisure
Grocery Convenience HORECA
$XX
billion
opportunity
Occasion
OBPPC commercializes
the priority opportunities
in store.
how
OBPPC work
starts with the
highest leverage
opportunity.
18. 35OBPPC – Occasion Brand Package Price Channel Architecturehow
Good OBPPC
incorporates three
key principles.
Differentiate
across channels
(& customers)
Capture unique
shopper needs
(within a channel
or customer)
OBPPC
Architecture
Segmented by pack role, consumption
occasions, and socioeconomic level
Segmented by pack role, consumption
occasions, and socioeconomic level
Define distinct
package roles
1 2 3
19. 37OBPPC – Occasion Brand Package Price Channel Architecturehow
Differentiate
across channels
Capture unique
shopper needs
Define distinct
package roles
1 2 3
First principle:
OBPPC defines
distinct package
roles.
OBPPC Architecture
(by category and channel)
(within a channel
or customer)
(& customers)
20. 39OBPPC – Occasion Brand Package Price Channel Architecture 39OBPPC – Occasion Brand Package Price Channel Architecturehow
Entry Frequency Upsize Upscale
Entry price point Frequent
usage size
Value Convenience
Incidence
Recruit new category
consumers or
competitive users
Transactions
Drive frequency among
existing consumers
Amount
Increase purchase
amount
Amount
Optimize value
on less elastic
purchases
1.0L (PET)
$0.99
$0.99/L
Value Index 106
1.5L(RefPet)
$1.40
$0.93/L
Value Index 100
2.5L (RefPet)
$1.99
$0.80/L
Value Index 86
2x 0.75L (PET)
$2.25
$1.50
Value Index 161
ObjectiveRoleExample
Core
Differentiator
Define package roles
consistent with PITA
objectives.
21. Entry Frequency Upsize Upscale
how 41OBPPC – Occasion Brand Package Price Channel Architecture
Strategic Package Roles
Customer Objectives*
Incidence
Number
Of Trips
Size Of
Purchase
Retail
Price/L
* Customer objectives translate into PITA formula
Package roles can
then be linked to
customer objectives.
22. 43OBPPC – Occasion Brand Package Price Channel Architecture 43OBPPC – Occasion Brand Package Price Channel Architecturehow
Second
principle:
OBPPC should
capture unique
shopper and
consumer needs
within a channel
or customer.
OBPPC Architecture
(by category and channel)
Define distinct
package roles
1 2 3
Differentiate
across channels
Capture unique
shopper needs
(within a channel
or customer)
(& customers)
23. 45OBPPC – Occasion Brand Package Price Channel Architecturehow 45OBPPC – Occasion Brand Package Price Channel Architecture
“We want Coke,
but at the best
price to meet my
family’s needs.”
She buys primarily
for: Home Meals
She buys primarily
for: Home Meals
She shops primarily at: Mass
A pack she might buy:
4x2L (PET)
$9.50
$1.20/L
A pack she might buy:
1.25L (PET)
$1.75
$1.40/L
OBPPC meets shopper
need and optimizes
profitability
She shops primarily at: Drug Stores
“We want Coke,
but I’m time
pressed – I’ll
pick it up when
I can.”
Consider two mothers
shopping for the same
occasion:
Susana Mary
DRUGCO pharmacy
Higher Price
Elasticity
Lower Price
Elasticity
24. 47OBPPC – Occasion Brand Package Price Channel Architecture
“I want a Coke,
but I have a daily
budget that I need
to stick to.”
He buys primarily
for: On the Go
She shops primarily at: Traditional He shops primarily at: Traditional
A pack she might buy:
1.25L (RGB)
$1.70
$1.36/L
A pack he might buy:
0.5L (PET)
$0.99
$1.98/L
“I want a Coke,
and I want it now
for the commute
home.”
Corner Mart Corner Mart
how
And two workers
shopping the same
channel:
47OBPPC – Occasion Brand Package Price Channel Architecture
Lina Robert
Higher Price
Elasticity
She buys primarily
for: Home Meals
Lower Price
Elasticity
OBPPC meets shopper
need and optimizes
profitability
25. how 49OBPPC – Occasion Brand Package Price Channel Architecture
OBPPC meets shopper
needs and optimizes
profitability by occasion.
On
the go
SUPERMARKETS IN COUNTRY A
At home
meals
0.33L
(can)
$0.43
$1.30/L
0.5L
(PET)
$0.86
$1.72/L
1.5L
(PET)
$1.55
$1.03/L
2x1.5L
(PET)
$2.94
$0.98/L
4x0.5L
(PET)
$2.98
$1.49/L
Meets
Susana’s needs:
Value
Meets Mary’s
needs:
Convenience
Could meet
Robert’s needs:
Convenience
Example: Sparkling Soft
Drink Category
Entry Frequency Upsize Upscale
26. how 51OBPPC – Occasion Brand Package Price Channel Architecture
Entry Frequency Upsize
SUPERMARKETS
IN COUNTRY B
At home meals
OBPPC reflects
the elasticities
of different
income groups.
In this example, the same packs are sold
at different prices in different neighborhoods.
High Income
Neighborhood
Mid Income
Neighborhood
Low Income
Neighborhood
1.25L
(RGB)
$1.19
$0.95/L
1.25L
(RGB)
$1.09
$0.87/L
1.5L
(PET)
$2.09
$1.39/L
1.5L
(PET)
$1.99
$1.32/L
1.5L
(PET)
$1.99
$1.32/L
2.00L
(PET)
$2.69
$1.35/L
2.00L
(PET)
$2.59
$1.30/L
2.00L
(PET)
$2.39
$1.20/L
Meets Lina’s
needs:
Daily Budget
Example: Sparkling Soft Drink Category
27. 53OBPPC – Occasion Brand Package Price Channel Architecturehow
Third principle:
OBPPC
differentiates
acrosschannels
and customers.
OBPPC Architecture
(by category and channel)
Define distinct
package roles
1 2 3
Define distinct
package roles
Differentiate
across channels
Capture unique
shopper needs
(within a channel
or customer)
( customers)
28. how 55OBPPC – Occasion Brand Package Price Channel Architecture
Different channels will
have different package
offerings for the
same occasion.
Primary consumption
Occasions
At Home Meals
On the Go
At Home Meals
At Home Leisure
Shopper behavior
in this channel
Daily trips
Higher rate of impulse buys
Lower price points
Weekly stock-up trips
Lower rate of impulse buys
Higher elasticity
Channel
Differentiator
Convenience
Proximity
Price
Assortment Breadth and Depth
OBPPC Strategy Frequency size packs
RGB for lower price point
Upsize packs in addition to entry size packs
Large PET to drive down price/L
TraditionalTrade Grocery
29. how 57OBPPC – Occasion Brand Package Price Channel Architecture
Primary Consumption
Occasions
At Home Meals
At Work Meals
At Home Meals
At Home Leisure
Shopper Behavior
in this Customer
Smaller household
Daily trips
Lower price sensitivity
Larger household
2 trips/week
Higher price sensitivity
Customer
Differentiator
Breadth of assortment
Convenience
Large footprint
Compact assortment
Proximity to neighborhood
Small footprint
OBPPC Strategy Over-index in single serve
Focus on frequency and convenience pack role
Over-index in multi serve and multipacks
Focus on frequency and upsize pack role
“Customer A” “Customer B”
Different customers will
have different package
offerings for the
same occasion.
30. 59OBPPC – Occasion Brand Package Price Channel Architecturehow
HOW do
these three
OBPPC
principles
come
together?
59OBPPC – Occasion Brand Package Price Channel Architecture
31. 61OBPPC – Occasion Brand Package Price Channel Architecturehow
A holistic OBPPC
model incorporates
multiple channels,
occasions and
shopper segments.
A
OCCASION
1
Immediate
Consumption
Future
Consumption
OCCASION
3
OCCASION
2
OCCASION
2
A
A
A
B
B
B
B
_0.33l can @ $ 0.49
_chilled
_3 SKU traffic driver
CHANNEL: Supermarkets
Occasions can be
further segmented by:
_Shopping missions
_Customer clusters
_Socio economic level
_Region/Location
Business Objective
Entry Frequency Upsize Upscale
For each segment,
we will define:
_Pack size, type
_Price point
_Number of items
_Placement
_Equipment
_Customer objectives
BRAND:
32. 63OBPPC – Occasion Brand Package Price Channel Architecturehow
Individual OBPPCs
are integrated into
one portfolio OBPPC
for each channel.
Individual Category Obppc
Example: Traditional Channel
Integrated Portfolio Obppc
Example: Traditional Channel
e.g. MyCoke e.g. Flavors e.g.Water
ENTRY FREQUENCY UPSIZE UPSCALE
On the go
snacks
Water
Flavor
Cola
Water
Flavor
Cola
33. 65OBPPC – Occasion Brand Package Price Channel Architecturehow
The complexity of an
OBPPC is dependent
on the capability to
segment and execute.
Convenience
On the go
Convenience
Snacks
Traditional
On the go, Snacks
Hypers
On the go, Snacks
Hypers
On the go, Snacks
Supers
On the go, Snacks
Convenience
On the go, Snacks
Traditional
On the go, Snacks
Supers
On the go, Snacks
Convenience
On the go, Snacks
Traditional
On the go, Snacks
Hypers
On the go, Snacks
Supers
On the go, Snacks
Convenience
On the go, Snacks
Water / Flavor / Cola
Brand level
COMPLEXITY: ILLUSTRATIVE EXAMPLE
Channel level Region level Total market
Region One Region two
