Merchandisins! What is it? All activities that feature your product(s) at the point of purchase. It is the final step in ensuring that the consumer sees your product and is tempted to buy it. Good merchandising is about the impact your product has on the consumer, it is about using the product itself to stimulate the customer to buy, it is about reminding the consumer ofyour mass media campaigns at the actual point of purchase when he/she is faced with the buying decision. How imuortant is Merchandising ? Very ... very ... very important. In a different age of selling the salesman was doing a good job when he obtained the right order from their retailer, no longer. Now we must sell in strongly and sell out to the ultimate consurnerjust as strongly. Merchandising is the key to growing and developing sales volume within every distribution outlet. It is in the outlet that the buying decision is made so it makes sense to -feature and display your product(s) as strongly as you possibly can- Presentation is everything not only in our business but in almost every business imaginable, travel agents, restaurants, airlines, the list is almost endless. You muit make the product(s) talk to the consumer. Consumer behaviour in store The only way you can find out how consumers behave specifically in store is to watch them. That may sound very time consuining but it need not be, take a few moments to observe the way consumers enter the shop, watch the way they approach the cigarette display or travel around the shop You are a consumer, how would you enter, walk around, buy? It's a common sense business all we need to do is apply a little conunon sense to the opportunities which consumer behaviour afflords us. LP4 The reason for considering consumer behaviour is that if we know their habits in store we can position our Point of sale material in the most effective place and we can position our brands in the best position so as to maximise sales volume. CT% (-n ~ co . _Q BATCo document for Legal Services : Health Canada 19 October 1999 IMe Tobacco Product Distilay The siting of cigarettes and other tobacco products instore is usually fixed by the retailer and is generally, though not always, not the subject of negotiation. It also usually occupies a relatively small area of the total retail space. There is not a lot of space to work with so we must ensure we get our fair share of it. How much space on the fixture should we go for? The minimum space should be in fine with our overall market share, minimum. We must be realistic, if we demand a great deal more than our market share the chances of that space remaining in our control is minimal, we may even lose out in share ofspace terms quite badly if we demand too much. The retailer may not agree with our demands but certainly we will face a backlash from our competitors and this will probably create a space war. The most important factor in ensuring an effective display is to have your brands in stock. If you alloW the brand to run out or through poor stock management fail to ensure continuity of supply your display space will be cut down, albeit temporarily. The number of facings devoted to each brand is determined by marki't share and the display policy ruling at the time. The more facings you can devote to a brand the more effectively it will be portrayed to the consumer. It will be more visible on the shelf and have more chance of grabbing the attention of the consumer and of being purchased. The positioning of the brands on the home site display is of key importance. On a check out display the brand(s) should be positioned centrally with a price andfor brand indicator highlighting it. On a fixture the prevailing traffic flow should be taken into account and 200's cartons of our brands, for example, be placed first in line if possible. On a dispenser unit our brands should have an eye level position, be highlighted by price and/or brand indicator and have a full shelf to themselves. Brand families should be grouped together at all times to create a larger, more effective display of the name, B E N S 0 N & H E D G E S, for example. The use of in-store furniture highlights our brands to very good effect and allows us to dominate the home site. Dispensers should always be kept clean~ orderly and free from debris and clutter. L-4 CD E 01% ui CY% LA CD Co BATCo document for Legal Services : Health Canada 19 October 1999 MERCHANDISTNG GUIrDELINES Derinition of Merchandisine Featuring and displaying your product at the point of purchase in such a way that it stands out head and shoulders above the competition. Key Princivles of Merchandising ViSibili the brand should stand out, on the shelf, on the door, on the window and throughout the outlet. Impa through using the right display material in the right place the consumer sees only our brand. It is not a question of quantity, it is a question of quality. Impact is created on the shelf by making the brand appear to be larger than it really is this is achieved through increasing the facings and positioning the brand in the best place on the shelf CLARITY One message per brand, doWt confuse the consumer with m2xed messages. The message is communicated via the display material employed, from price indicators to open and close signs and they must be of the same generation, no old ones. CLEAN Everything about your brand should be clean and "sparkling", consumers do not want to buy dust. Keep everything as clean as possible, ensure the packs are in good condition and the POS is not tom or damaged. 0 FULL FACE The pack looks much better when displayed full face, no side profiles thank you, 20 packs and 200 cartons should always be displayed full face DOWNATION L4 The end result of your merchandising work should be the domination of the outlet, - b domination like Coca Cola dominates, the consumer should be left in no doubt what C7% sells around here, Benson & Hedges. Vl 0% CA CID No BATCo document for Legal Services : Health Canada 19 October 1999 outside, inside and home site should scream about your brand. IDENTIFYING THE KEY OUTLETS Key outlets should fulfil some of the following criteria; 1. Have a prominent position in the locality, at cross-roads, beside bus stations, close to local meeting points etc. Have a location wWch is passed by a lot of people and where displays can be seen. 2. Have a lot of in store traffic. Outlets which are busy and used by a wide cross section of potential buyers. 3. Outlets which sell a lot of cigarettes 4. Outlets which are open longer hours than the norm 5. Outlets where people consume our products, bars, restaurants, cafes, night clubs hotels etc 6. Outlets where opinion leaders shop. 7. Outlets where tourists may shop HOW TO FIND THESE KEY OMETS Clearly local knowledge is invaluable in this and a list of outlets having some of the above characteristics should be obtained from the local sales manager or distributor. However, in order to make sure you don't miss any key outlets the best way to double check what you have received from others and find other key outlets is to block check the area This is done by using-brusing7a map and turning left at every road until you have covered a designated area. Record each outlet you find and see if it fulfils the criteria we have used to define key outlets. Do this throughout your area until you have covered every road, lane, shopping mail etc. The great advantage of this system is that in addition to finding key outlets you wiH have a map showing EVERY outlet in the village, town, Island. You should enter each of the outlets because you may get a totally false picture from the outside. Introducing yourself may be advisable, * Im from Benson Hedges and Im doing a survey of the area to ensure that we are giving you the best C:) possible service we can..." CP. U4 ---0 2 BATCo document for Legal Services : Health Canada 19 October 1999 The success of this pack change exercise depends on finding the key display locations, discussing the merchandising requirements with the retailer and dressing the outlet to the standard required. MERCHANDISING BY OUTLET TYPE Outlet tyj& 1. Wholesalers, Distributors 2. Cash and Carry 3. Grocery, Organised and Independent 4. Convenience, Organised and Independent 5. General Stores. 6. Tobacconists 7. HORECA S. Duty free, airport, seaport, downtown etc Wholesalers/Distributors Where we have an exclusive Distributor the opportunity exists to really show off Benson & Hedges in the best way possible. Where allowed, in tenns of restrictions, an exterior display should be created by using large scale material. This should be the best display in town. Wholesalers will probably not be exclusive but the opportunity to merchandise should not be ignored, both exterrially and internally. In addition display material should be given to the wholesWer for him to distribute to the remilers he services. Cash and Carry This type of outlet provides an ideal opportunity to b1form and persuade the retailer at the point where they purchase stock for their shop and, if present in the market~ provides an ideal merchandising opportunity. L.4 Again POS should be made available when Benson & Hedges is purchased, indeed C> POS could be attached to the carton/case and ofrered as a free gift. C1% U-1 CP BATCo document for Legal Services : Health Canada 19 October 1999 Grocery This outlet type is probably the most numerous of all the different types of outlet you will come across in the Caribbean. There is a plethora of different types of grocery outlet, supermarkets to holes in the wall, chains to cabins. The grocery category is also characterised by the large number of products stocked, therefore there is a lot of competition for space, both on the shelf and for display material. There are key positions which you must dominate. The door/entry, the till, the 20s and 200s display poinL Convenience This type of outlet is very important in the distribution chain. As these outlets are open for longer hours they maintain availability of our products when the usual place of purchase is closed. They are ideal places in which to brand switch, if Benson & Hedges is well displayed the consumer may well be tempted to try them out as a change to their regular brand. HORECA (Hotels, restaurants, cafes etc) Impulse purchase tends to characterise purchasing patternswithin this outlet type. They do not carry a wide range of cigarettes usually only the top three best sellers. There is however enormous scope for display ie, umbrellas, beer mats, swizzle sticks, ash trays, menu holders etc. This could be termed general awarciess merchandising, different in emphasis to retail merchandising but just as important- MERCHANDISING STANDARDS Exclusive Distributors The Distributoes premises should be the best displayed 'retail" outlet in town. The ordy tobacco product he handles is ours and therefore there is no competition to worry about. Standard NB, a1l material must feature Benson & Hedges Window and point of entry display, either Ooster's and/or window surround, point of entry must have an open/close sign. Internally, Svc stock should be on display, a selection of retail display material must be on show, creatively displayed. C> Examples of in-stom furniture should be on display, filled with E. stock in the correct position. 4CY% Ln 4 BATCo document for Legal Services : Health Canada 19 October 1999 Material should be available for retailers to take away with them, a record should be kept so a check can be made later in the week or day. Plus your own contribution to creativity Wholesalers If the wholesaler has salesmen brief them, motivate them and encourage them to merchandise your products, it makes extremely good sense! Standard Almdow display, posters and(or window surround Open/close sign on point of entry Product display close to the point of payment or the establisbed home site. Full face with price indicators showing cost and rerail prices, brand families grouped together. Material available for retailers to pick up if and when they visit the wholesalers premises. Cash and Carry Standard Fascia board and/or window display Open/close sign at point of entry Product display in line or above market share, full face, brand &milies grouped together, price indicators showing cost and retail prices. Display material available for retailers to use in their shops. Grocery There are several different types of Grocery outlet, supermarkets, self service, courster service are the obvious ones. All of the different types of grocery outlet must adh=-e to the key merchandising principles but clearly there will be differences in approach. Standards / Supermarkets C) A bold poster on the window positioned to be seen by the C7% majority of shoppers .~.r U1 . 0% Open/close sign at point of entry ILA I NO L4 5 BATCo document for Legal Services : Health Canada 19 October 1999 A bold poster beside the shopping baskets Reminder posters on the way to the cigarette fixture, usually sited at the check-out. The cigarette display must be, full face, highlighted by arrows and/or brand indicator, at eye level and have at least 2 facings. 200s should be displayed in the same way even if they are positioned on top of the shelves. There must be a small poster and/or sticker at the point of purchase. Standard/ Self service/Counter service Window poster Open/close sign on point of entry BAT dispenser with our brands on eye level shelf and the shelf above, full face with priceJbrand indicators 200s display with brand indicators and full face HORECA Any display of stock should be at eye level and featured with price/brand indicators. There is a great opporturdty to exploit Ben ' son & Hedges brand name within hotels, restaurants, bars and clubs. It is difficult to set standards but the following guidelines apply-, Benson & Hedges ashtrays should be placed in all the leading HORECA outlets. Umbrellas should be placed in cafe sites in busy pedestrian/trafficarea . A small sticker should be sited on all tills informing the consumers that Benson & Hedges is in stock. LM CD (7% ui %M .J>b 6 BATCo document for Legal Services : Health Canada 19 October 1999 HM IMPORTANT IS MMOWDlSING? Merchandising plays IL highly important role in all outlets, Kiosks, Sbops, aad Supermarkets. To understand the importance Of Merchandising we must understand the Marketing Cycle. MARKETING WRKET POL I CY MANUFACTURE RESEARCH ADVERTISING CONSUMER DISTRIBUTOR MERCHANDISING. As we can see from the above diagram the two factors that bring the products name and qualities to the consumer are advertising and merchandising, with merchandising at the all Important point of purchase, to not only remind people of the products availability but to also entice LIN people to buy. If merchandising is recioved from the marketing chain all, C:) the other factors would become irrevalant, because without that all important link between the customer and the distributor the product Is C7% unlikely to sell. Qn 0% CA NO (-n BATCo document for Legal Services : Health Canada 19 October 1999 ln.*S TALK ABOUT MERCHANDISING MUT IS MERCHANDISING? To general terms, merchandising is the vital link between the distributor and the custcmer. Merchandising brings the product to the cust rs attention at the time of purchase, and can remind the custaner of the advertising he/she may have seen elsewhere. This vital link can only be controlled by you the salesman. If you are to make the best of your merchandising you must apply the 'Six Rights' of merchandising which are:- 1. The Right Goods 4. At the Right Price 2. In the Right Place 5. In the Right Quantity 3. At the Right Time 6. Of the Right C~uality 1. The Right Goods: Those that the customer will buy in such quantities as to yield Your C=Tany maximum turnover and profit. 2. In the Right Place: Positioned in good selling sites within the Zu__tlet, and on shelf to ensure maximum brand awareness. 3. At the Right Time: When there is maximum selling opportunity. i.e. during a pranotion or advertising campaign. 4. At the Right Price: Ideally a better price than your campetitors, certainly a price that offers your custorDers; value for money. 5. In the Right Quantity* To ensure your products can be seen, and to also ensure sufficient storks available to cover sales out. Brpty shelves will result In reduced sales. a. Of the Right Quali!Z: Value for money will alwa7s be linked to quality. Goods of the right quality will always ensure repeat sales. L?4 Ul 0% LP4 %-0 0% i BATCo document for Legal Services : Health Canada 19 October 1999 IIHAT ARE THE PRINCIPIM OF MERCHANDISING? Having gained an understanding of what merchandising is and its importance we now need to consider the principles we should apply to achieve good merchandising. These principles of merchaadising fall under four main headings:- I. Position 3. Pricing 2. impact 4. Availability 0 1. Position: The siting of your products and display material must be positioned so they can be seen easily by the customer. 2. Ispact: Displays of stock should be grouped together to create maximum impact. i.e. similar coloured packs displayed together will create a bold eye catching display. 3. Pricing: Ensure all displays of stock are price marked, particularly vben your product his a price advantage over others. When promoting products by price cutting, ensure the amount of money being saved is -clearly displayed. Value for money must be seen. This can also be cammLmicated on Posters and other display material. 4. Availability: Can the customer see the Brand? Can the customer or shop keeper ea ily reach or serve the Brand? Many impulse sales are lost when stock is not available or cannot easily be seen or reached. 0 U04 C> E CY% I~0 __4 BATCo document for Legal Services : Health Canada 19 October 1999 IXT'S LOOK AT THE CtZ?MER People come in varying shapes and sizes, they have different attitudes, opinions, and needs, in short there is no typical or average customer. Our aim, vhen merchandising, is to communicate a simple message to all types of customer - that Is to buy your products. To do this successfully we need to understand how our customer receives~ Information. We all have five senses through which we learn. These are sight, hearing, taste, touch and smell. 01 SIGHT 8 5 7o I BATCo document for Legal Services : Health Canada 19 October 1999 Shops: Studying the approach to a shop will help you to decide where Big-tto place your window or door display material or putting a display in the window Itself. Once Inside the shop a study of which way people travel from the point of entry to the point of purchase, will help us to decide where we can best place further display material. For instance, it would be no good placing a poster in a position where people would only see it on their way out, after they bad purchased their goods. It is =ch more effective to place them either on the way to the counter itself , or around the counter. & Ln C N) BATCo document for Legal Services : Health Canada 19 October 1999 Also a study of the approach to the counter will. help you to decide which is the beat shelf position for your Products to be displayed behind the counter. 0 ' El 13 ~Mrmarkets: Supermarkets are subject to all the same approach rules as shops. bowever, Traffic Flow inside supermarkets is of vital importance, simply because people are left to make their own buying decisions, unlike in a shop where the shopkeeper can advise on, or suggest products. This means that we must ensure people see our products. A careful study of the Traffic Flow within a supermarket should reveal the best place to site our products, which should be first in the line of Traffic Flow. The diagram over the page shows a typical floor layout plan for a Supermarket. This shows that the entrance area and length of the first Gondola Is the of the store to attract 100% of the store traffic. Approximately shop the perimeter of the store, IC% vi.32 go around the first Gondola, and approximately 5C% around the second, leaving the centre of the supermarket the least shopped. This of course Is a theoretical case, and is subject to the positionirg of demand lines. In real life the only way to decide the true Traffic Flow is by observing what actua]JLY happens in the supermarket itself. L4 CD 0% Ul CD LM BATCo document for Legal Services : Health Canada 19 October 1999 FLOW IN A SELF SERVICE SHOP 0070 CHECK OUT 1 10% ar " dw dw LESS THM 50,1110 OUIT + LESS T14AN I . - 600% 1 CHECX 10% 0 Lrf W 4w IWO% OUT 0 --71 1 Iq I L.014 Un (D .4h. -4- BATCo document for Legal Services : Health Canada 19 October 1999 MERCHANDISING AND DISPLAY $HELP STOCK BARS/COUNTER SERVICE AND HOLE 11 THE WALL OUTLETS Ensure all stock to displayed in full view of the customer, not placed under the counter. -. =jr-; Display packets face-on, not end-on. FF~ x Display stock on the eye-level shelves. Display stock at the point of purchase. Make sure stock Is not hidden behind the owner/shop assistant. - L*j Vertically block cigarettes together to create visual impact. cr% Ln -CAP C:) Ln I BATCo document for Legal Services : Health Canada 19 October 1999 Always display 10's next to 20's. 1-7n71- Make sure there are no gaps face-up the stock on the shelves, an necessary. Group 555's, B+H and, where stocked, J?3 together. Allocate facings in line with sales levels of each brand. SHELF STOCK - SUPERMARKET AND OTHER SELP-SERVICE OUTL_7T3 Check the traffic. flow around the outlet. If customer traffic flow Is past the gondola. place BAT brands f1rat In that flow. /EEIM- If customer traffic flow is head-on to 0.1 the gondola, then place BAT brands in C) front of that flow. E-4 0N BATCo document for Legal Services : Health Canada 19 October 1999 Vertically block the brands for visual Impact. Make sure customers can see and reach the brands. _j USE OF IN-SHOP FURNITURE locate BAT-supplied units In popular outlets where an opportunity exists for a good site. Ideally place the unit, by the point-cf-purebase, at eye-level or in a position which to in full view of the customer. The Kessler Boutique merchandiser should be used in good quality outlets. When stocking the Kessler Boutique merchandiser, the minimum requirement is for the top shelves to be reserved for BAT brands. If It is possible to use all of the I mlllte~lr r space for BAT brandew then the -a *:!ocking" method of display should be u d. In particular, where a large competitor unit Is already In place, then the BAT unit should be used as an additional location for BAT brands only, CN C) 14 BATCo document for Legal Services : Health Canada 19 October 1999 When using the Barbados-style dispenser, ensure that BAT brands are blocked together with at least 4 columns being used. Always make sure inserts are changed regularly to ensure pictures are clean and In good condition. If there is a special drive on a particular brand - _V 3__~_]M 555's or B+H, Insert appropriate dispenser card. Which ever BAT unit is used always make sure that competitor material has not been placed on It. )Pj 52. 4.- Where large competitor units are already In place and it Is not possible to effectively site a BAT unit, assess L4 the situation on the competitor unit C) for the best position and presentation. ME At least, block BAT brands together on the eye level shelves. (_n 0% co -4- BATCo document for Legal Services : Health Canada 19 October 1999 USE OF DISPLAY MATERIAL Place posters in line of main customer flow into shop. gum look for uncluttered locations to gain maximum visual impact for the poster. Place posters at eye-level. czo P In-shop, position posters In main traffic flow from point of entry to point of purchaae or place in uncluttered position near point-of-purchase lift I it - W I or place'material above eye-level if it ARS, can be seen at a distance. 0% kil (7% CD -5- %D BATCo document for Legal Services : Health Canada 19 October 1999