Shopper Marketing - February 2018 - 13

FEATURE | ZERO-BASED BUDGETING 13

FEBRUARY 2018 SHOPPER MARKETING

" ZBB empowers shopper marketers to extract maximum profitability from
their programs. It creates transparency into the programs and tactics that
are delivering the greatest return at the customer and channel level. It
catalyzes broader collaboration between internal and external teams."
James Cioban, Cierant Corp.

using? What elements are proving to be increasingly effective? Which are no longer performing as before? And with
that info, how do I think about allocating dollars to drive
results going forward?
CIOBAN: ZBB empowers shopper marketers to extract
maximum profitability from their programs. It creates
transparency into the programs and tactics that are delivering the greatest return at the customer and channel
level. It catalyzes broader collaboration between internal
and external teams.
ED JOHNSON: ZBB puts a rigorous focus on shareholder
value and return on investment. There's a reduction in
complacency and reversion to historical plans. It drives a
culture of ownership over results and shareholder value
at all levels.

Q

Does it help, or hinder, creativity?
CHAMBERS: It should foster creativity in developing the best programs to drive the most volume, or name
your priority - and provide the organization with the right
short- and long-term plan.
ANTHONY: It challenges creativity for the sake of creativity. Let's be creative, but with purpose. Let's kill off activity
that wins awards, but keep the stuff that drives the business forward.
CIOBAN: Zero-based budgeting doesn't stifle creativity. It
directs it.

and value of converting shoppers along the path to purchase should attract greater dollars, drawing from other
marketing buckets that might no longer be as strong or
effective growth drivers.
ANTHONY: It isn't clear in all of these companies exactly
how much shopper marketing is impacted. That will depend on the structure. A lot of shopper activity is buried
in trade spend, which in many companies still isn't under
a ZBB protocol, though it should be.

Q

Why isn't shopper marketing included in
ZBB?
ANTHONY: It's a separate pot and is defended by sales
people as 'we have to spend it because the customers demand it' - which is a weak excuse. ZBB doesn't say cut
spend, but rather think more carefully and plan better to
get a better return.

value and what will get their attention? When you design
a display, are you sourcing it strategically or does every
brand manager have a preference?

Q

Who in the retail space is getting it right -
rethinking investment spend to drive new
ways to capture growth?
FITZMAURICE: One example is what P&G has been talking about for the past few years. Marc Pritchard, P&G's
chief brand officer, is pushing the industry for transparency, and P&G is trying to determine what level of precision
spend drives the greatest return. Walmart is also making
very different spend decisions as it balances store reinvention with dot-com spending and the like.

Q

How frequently does ZBB occur - is it an
annual process?
JOHNSON: Increasingly, the commercial planning process
is happening more and more frequently, and ZBB can be
used in that process. We believe the frequency of planning
cycles may continue to increase over time and may lead to
an always-on planning capability and even the emergence
of "programmatic" platforms for pricing, trade, shopper
and in-store digital campaigns - in the same way that it
has for digital marketing.

Q

What does it take for ZBB to succeed?
ANTHONY: It has to be handled by people who understand the strategy - the commercial leaders - and set up in
conjunction with finance. If managed as a finance process, it

" [ZBB] has to be handled by people who understand the strategy -
the commercial leaders - and set up in conjunction with finance. If
managed as a finance process, it is likely to reduce costs but not build
brands and business as it will become very short term."

Q

Typically, how are shopper marketingrelated functions impacted?
CIOBAN: There is better alignment of brand funding with
top-performing channels, tactics and customers. Shopper
marketers are able to replace ineffective year-over-year funding models with an active budgeting approach that adopts to
real-time changes in performance and opportunity.
FITZMAURICE: It should be a positive for shopper overall.
As CMOs and marketing VPs plan the business to maximize spend to capture growth, the increasing importance

Mike Anthony, Engage

Q

What are some areas you have clients think
about?
HAWKE: When we work with clients on display, advertising, merchandising - we look at everything in the value
chain. Start at the creative design process and whether
the display is designed to value. How are they printed,
distributed, handled? What are customers really going to

" Be as transparent as possible with commercial teams, channel partners
and retailers and involve them in the decision-making process to
help gain buy-in. They are often skeptical of ZBB because of the effort
required and the impact it can have on their businesses.
Ed Johnson, Deloitte Consulting

PATRICK
FITZMAURICE
formerly managing
director, professional
development,
Path to Purchase
Institute

KYLE HAWKE
associate principal,
McKinsey & Co.

is likely to reduce costs but not build brands and business as
it will become very short term. Create an integrated strategy,
agree to clear KPIs to achieve that (financial and non-financial), and then run ZBB against this. The important thing is
to create the balanced scorecard of KPIs first.
CHAMBERS: Solid capability training and core understanding of success metrics will set the team up for success and
foster a collaboration that drives focus on strategic priorities.
JOHNSON: Be as transparent as possible with commercial
teams, channel partners and retailers and involve them in
the decision-making process to help gain buy-in. They are
often skeptical of ZBB because of the effort required and
the impact it can have on their businesses.
HAWKE: A two-way street between marketers and executives. Marketers must be able to prove to executives that
their campaigns have high ROI in order to maintain or
grow their investments. Executives must demonstrate to
marketers that ZBB is about aligning resources to fuel
growth rather than just cutting for the sake of near-term
SM
margin expansion.

ED JOHNSON
principal, pricing
& profitability
management,
Deloitte Consulting



Table of Contents for the Digital Edition of Shopper Marketing - February 2018

Contents
Shopper Marketing - February 2018 - Intro
Shopper Marketing - February 2018 - 1
Shopper Marketing - February 2018 - 2
Shopper Marketing - February 2018 - Contents
Shopper Marketing - February 2018 - 4
Shopper Marketing - February 2018 - 5
Shopper Marketing - February 2018 - 6
Shopper Marketing - February 2018 - 7
Shopper Marketing - February 2018 - 8
Shopper Marketing - February 2018 - 9
Shopper Marketing - February 2018 - 10
Shopper Marketing - February 2018 - 11
Shopper Marketing - February 2018 - 12
Shopper Marketing - February 2018 - 13
Shopper Marketing - February 2018 - 14
Shopper Marketing - February 2018 - 15
Shopper Marketing - February 2018 - 16
Shopper Marketing - February 2018 - 17
Shopper Marketing - February 2018 - 18
Shopper Marketing - February 2018 - 19
Shopper Marketing - February 2018 - 20
Shopper Marketing - February 2018 - 21
Shopper Marketing - February 2018 - 22
Shopper Marketing - February 2018 - 23
Shopper Marketing - February 2018 - 24
Shopper Marketing - February 2018 - 25
Shopper Marketing - February 2018 - 26
Shopper Marketing - February 2018 - 27
Shopper Marketing - February 2018 - 28
Shopper Marketing - February 2018 - 29
Shopper Marketing - February 2018 - 30
Shopper Marketing - February 2018 - 31
Shopper Marketing - February 2018 - 32
Shopper Marketing - February 2018 - 33
Shopper Marketing - February 2018 - 34
Shopper Marketing - February 2018 - 35
Shopper Marketing - February 2018 - 36
Shopper Marketing - February 2018 - 37
Shopper Marketing - February 2018 - 38
Shopper Marketing - February 2018 - 39
Shopper Marketing - February 2018 - 40
Shopper Marketing - February 2018 - 41
Shopper Marketing - February 2018 - 42
Shopper Marketing - February 2018 - 43
Shopper Marketing - February 2018 - 44
Shopper Marketing - February 2018 - 45
Shopper Marketing - February 2018 - 46
Shopper Marketing - February 2018 - 47
Shopper Marketing - February 2018 - 48
Shopper Marketing - February 2018 - 49
Shopper Marketing - February 2018 - 50
Shopper Marketing - February 2018 - 51
Shopper Marketing - February 2018 - 52
Shopper Marketing - February 2018 - 53
Shopper Marketing - February 2018 - 54
Shopper Marketing - February 2018 - 55
Shopper Marketing - February 2018 - 56
Shopper Marketing - February 2018 - 57
Shopper Marketing - February 2018 - 58
Shopper Marketing - February 2018 - 59
Shopper Marketing - February 2018 - 60
Shopper Marketing - February 2018 - 61
Shopper Marketing - February 2018 - 62
Shopper Marketing - February 2018 - 63
Shopper Marketing - February 2018 - 64
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