GREG THAIN BT RH has been Chairman / CEO of AA marketing, trade marketing, DI N SECOND L internet, consultancy, PR E & EDITION and research companies, in the UK and Y emerging markets. Over the last 20 years he has owned or managed businesses in Russia, India, China, Turkey, Hungary, Romania, Greece, Ukraine, Sweden and Kazakhstan, Completely revised and updated, Store Wars brings right up to date the S STORE WARS • Completely updated and revised, with new working for many of the leading international struggle between manufacturers and retailers for control of MINDSPACE data, examples and case studies. FMCG and retail businesses. Currently adjunct T and SHELFSPACE in developed markets, emerging markets and the internet. professor of marketing and e-commerce • International, e-grocer and private label O at the International Monaco University This is a must-read book if you work in retail, FMCG, marketing or sections added. (IUM), and Chairman of the Storewars consumer goods. THE WORLDWIDE BATTLE FOR MINDSPACE AND SHELFSPACE, ONLINE AND IN-STORE • Retailers grow in power and expand marketing business. He lives between Monaco R Consumer marketing and consumer purchases, drive our modern world. The worldwide. and Moscow. world market is quickly dividing between a few mega-manufacturers that E • Manufacturers merge and takeover each market worldwide and international retailers who are striving to catch-up AHOLD ALBERTSONS ALDI AMAZON ANHEUSER-BUSCH AUCHAN other in a desperate attempt to compete. and dominate. BAT CARREFOUR COCA-COLA COLGATE COSTCO DANONE DIAGEO W • E-retailing is growing quickly to 30% of total Marketing for FMCG manufacturers and retailers is coalescing. Every FMCG EBAY GENERAL MILLS HENKEL JOHNSON & JOHNSON KELLOGG’S JOHN BRADLEY sales. manufacturer must now understand retailers, their business and marketing KODAK KRAFT FOODS KROGER L’OREAL LECLERC LIDL MAGNIT held international marketing A positions in Cadbury for 24 strategies, their strengths and limitations. Marketing for retailers involves, for MARS METRO NESTLE NOKIA PEPSICO PHILIP MORRIS P&G RECKITT • Fully updated and revised by Greg Thain years before becoming a consultant and their mushrooming and complex Private Label ranges, adopting the portfolio BENCKISER SEARS TESCO WAL-MART X5 RETAIL GROUP 7-ELEVEN * and John Bradley, based on the original R writer. His first book, Cadbury’s Purple Reign, management and branding techniques of their suppliers. Never has it been book by Judith Corstjens and Marcel was published in 2008 and John is a regular more important for each to walk in the other’s shoes. S Corstjens published in 1995. The views commentator on the FMCG world in his expressed in the current edition are solely adopted home country of Canada and the those of Greg Thain and John Bradley. USA. John is currently working on his next book, again jointly with Greg, on the world’s leading consumer marketing companies; provisionally entitled, The Mega-Consumer SECOND EDITION Companies, scheduled to be published April 2013. * All brand names and product names used on the cover of or inside this book are trade names, trademarks or registered trademarks of their respective owners. GREG THAIN & JOHN BRADLEY * All brand names and product names used on the cover of or inside this  book are trade names, trademarks or registered trademarks of their respec- tive owners. STORE WARS STORE WARS THE WORLDWIDE BATTLE FOR MINDSPACE AND SHELFSPACE, ONLINE AND IN-STORE SECOND EDITION GREG THAIN AND JOHN BRADLEY A John Wiley & Sons, Ltd., Publication This edition first published 2012 © 2012 John Wiley & Sons Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com. The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought. Library of Congress Cataloging-in-Publication Data Thain, Greg, 1954– Store wars : the Worldwide Battle for Mindspace and Shelfspace, Online and In-store / Greg Thain and John Bradley. p. cm. Includes index. ISBN 978-1-118-37406-1 (cloth) 1. Retail trade. 2. Marketing. 3. Consumer goods. I. Bradley, John, 1957– II. Title. HF5429.T37 2012 381.'1–dc23 2012018039 A catalogue record for this book is available from the British Library. ISBN 978-1-118-37406-1 (hbk) ISBN 978-1-118-37424-5 (ebk) ISBN 978-1-118-37480-1 (ebk) ISBN 978-1-118-37481-8 (ebk) Set in 11/15.5 pt FF Scala by Toppan Best-set Premedia Limited Printed in Great Britain by TJ International Ltd, Padstow, Cornwall, UK TABLE OF CONTENTS Acknowledgements  vii Introduction  ix CHAPTER 1    Shifting of power in the value chain  1 CHAPTER 2    Differences between manufacturers and retailers  23 CHAPTER 3    The fragility of a marketing orientation  37 CHAPTER 4    Retailers and the marketing concept  53 CHAPTER 5    The battlefield for mindspace and shelfspace  69 CHAPTER 6    The battle for mindspace  83 CHAPTER 7    The battle for shelfspace  101 CHAPTER 8    Creating a sustainable retail differential  advantage  119 CHAPTER 9    Private label  139 CHAPTER 10    Trade marketing  165 vi TABLE OF CONTENTS CHAPTER 11    Internationalisation and emerging markets  193 CHAPTER 12    E-retailing  215 CHAPTER 13    The new order and its challenges  239 Appendix 1: Top private label manufacturers  265 Appendix 2: BRIC market snapshots  269 Index  277 ACKNOWLEDGEMENTS We would like to thank all the team that have assisted us over the last three years in the creation of this book. Especial thanks go to Alexandra Skey, our researcher, who dili- gently uncovered much new information; Alex Utochkin, who made our initial charts; Ludmila Belokonova, the manager of the StoreWars Business Simulation; and the other members of our team, Ekaterina Voitenkova, Lavrenyuk Anastasia and Dariusz Kepczynski. On the expert and academic side, we would like to thank Professor Niraj Dawar of the Richard Ivey School of Business for his valuable input and suggestions; Chen Junsong, professor of marketing CEIBS, China, who gave us extremely valuable help on the China and Asian markets; Nuno Bouça, our partner at Excel Formação in Brazil, who helped us with information from South America; Tim Munnion, our partner in Portugal; Stephen Kreeger, Managing Director of Metro, Almaty, Kazakhstan, who gave invaluable insights into Russia and CIS; and Fernando Zerboni, PhD and Dirección Comercial at IAE Business School, Universidad Austral; Mikołaj Budzyn´ski, our partner at Inspiraction, Poland; Marika Taishoff, PhD and Director of the Monaco MBA at IUM, and Ben Aris in Moscow. Thanks also to Planet Retail and AC Nielsen for their assistance with charts and data, and our editor Tim Bettsworth. viii ACKNOWLEDGEMENTS John would like to thank his wife Audrey and daughter Georgina for their unstinting support in all his endeavours. I would like to thank my wife Katya and children, Sarah, Nick, Poppy, James and Magnolia for their understanding. Greg Thain April 2012