Retail Marketing and Branding A Definitive Guide to Maximizing ROI

Dr. Jesko Perrey Director, Düsseldorf Jesko Perrey is the global leader of the CLM (Customer Lifecycle Management) service line and a core member of the leadership team of the EMEA Consumer Goods & Retail Practice at McKinsey. His focus is on brand management, marketing ROI, segmentation, and CLM across different industries. Jesko is the author of many articles and essays in leading journals and compendiums, particularly on marketing-related subjects such as branding, marketing ROI, segmentation, and CLM, and coauthor of the book Power Brands. He holds an MBA and a PhD from the University of Münster.

Dr. Dennis Spillecke Principal, Cologne Dennis Spillecke is a core member of the EMEA Consumer Goods & Retail Practice, as well as of the EMEA Marketing & Sales Practice at McKinsey. Dennis leads the global service line on marketing ROI and branding. In recent years, Dennis’ work has focused primarily on the areas of digital marketing, marketing ROI, and branding. Dennis holds a PhD from the Otto Beisheim School of Management (WHU) in Vallendar.

Introduction to the Second Edition xiii

Second Edition Acknowledgments xv

Introduction to the First Edition xvii

First Edition Acknowledgments xxi

Commonly Used Acronyms xxiii

Part I Building Superior Retail Brands 1

1 Principles of Successful Brand Management: Art, Science, Craft 3

Art, science, craft 5

Creativity and consistency 6

Strengths and weaknesses 8

Touch point orchestration 9

2 Segmentation 21

Relevance in retail 22

Top management attention 23

Consumer needs 26

Strategic segmentation 30

Implementation 32

3 A Guide to Excellence in Retail Brand Management 37

The brand diamond 37

The brand purchase funnel 42

BrandMatics 45

The brand promise 50

Brand delivery 52

4 Developing and Refi ning Retail Formats 63

Basic types of format development 64

The four-step process 66

Implementation support 74

5 Store Brand Portfolio Management 77

Multiple formats and brands 78

BrandMatics Advanced 80

The brand space map 81

Impact estimation 84

6 Private Label Branding 89

PL growth 90

Four generations of PL 95

PL strategy 100

SKU selection 102

Capabilities 103

Part II Optimizing Marketing ROI 105

7 How to Spend It: Fact-based Media Mix Optimization 107

Media landscape transformation 108

Equal footing 110

Three approaches 112

8 Budget Sizing: The Million-dollar Question 117

Systematic approach 117

Transparency 119

Outside-in benchmarking 121

Inside-out budgeting 123

Effi ciency modeling 125

Budget level estimate 126

9 Budget Prioritization 129

Decision mode 129

Investment units 131

Full transparency 134

Prioritization criteria 136

Avoiding automation 140

10 Reach–Cost–Quality 147

Vehicle optimization 148

Apples and apples 149

Universal scores 157

11 Marketing Mix Modeling 161

How to spend it 161

Impact comparison 163

Applications 165

Multi-lever transparency 166

What to watch out for 168

12 The Digital Retail (R)evolution 179

End-to-end digitalization 181

Channel convergence 183

Localization 186

Social media 188

Content management 191

Brick-and-mortar 192

13 POS Marketing 197

The most powerful vehicle 197

Lack of leverage 199

Systematic management 200

Tangible and intangible elements 203

The human factor 211

14 Leafl ets and Local Print Advertising:

How to Achieve Local Media Excellence 217

The true point of sale 217

A complex challenge 219

Fine-tuning 222

Product selection 223

Geo-marketing 225

15 Fact-based Promotion Management 231

Balance pricing and promotions 232

KPIs for optimization 235

Supplier negotiations 239

Margin improvement 241

16 Excellence in Classical Media 247

A key element 248

Creativity and content fi t 252

Testing and learning 255

Message delivery 257

Creative partners 261

17 Digital Marketing Excellence 269

Value proposition 270

Digital strategy 272

Search engine marketing 276

Display advertising 280

Social media integration 282

Digital marketing organization 287

18 Maximizing Customer Value with Data-driven CLM 297

Full value 298

Deep understanding 302

Predictive modeling 305

Keeping track 308

Capability building 310

Applications 316

19 Smart Sourcing 325

Sizeable savings 326

Effi ciency levers 329

Effi ciency optimization 332

Best practice 337

Deep dive 340

Part III Ten Perspectives on Retail Marketing 347

20 Ten Perspectives on Retail Marketing 349

Contributors 351

Index 365

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