【正文】 ? Reference price is the most important lever: – in all consumer segments, although other levers have disproportionate influence depending on the segment, such as range architecture for “Quality seekers and time savers” and “Indifferent shoppers on a budget”. – in all markets except Mexico City, where range architecture is slightly more important ? A limited number of KVIs appear to particularly important in driving consumers? perception of reference price ? From matching price perception with price reality, it is clear that consumers are able to quite accurately identify retailers with low average prices in markets where promotional activity is relatively low. Promotions do not drive price perception in any market and in fact obscure price reality in Sao Paulo and Buenos Aires. ? There are indications however, both in low and high promotional markets that some retailers are able to get more credit more value than they “deserve” 1 2 3 4 5 38 HOW DO CONSUMERS DEVELOP THEIR PRICE PERCEPTION? Source: Team analysis ? What are the different elements that can help explain price perception? ? What are the elements that are most relevant to explain price perception? ? Are these different for the various markets? ? Are these different for various segments? How do consumers perceive prices? ? Do Latin American consumers accurately perceive low price retailers? ? Are there differences in price perception accuracy when we look at the different regional markets and segments? ? What elements might explain regional differences in price perception? How does price perception match with price reality? 39 THERE ARE SEVERAL POTENTIAL DRIVERS OF PRICE PERCEPTION Source: Team analysis Reference price Promotions Range architecture Communications Instore environment Drivers ? Low prices on items bought most often ? Low prices on wellknown items ? Prices are usually low ? Frequent discounts ? Frequent interesting promotions (., 2x1, wow deals) ? Low priced alternatives for everyday basics (., OPP) ? Broad range of price and quality levels ? Private label with good price/quality ratio ? Believable low price ads ? Frequent promotion pamphlets ? Instore signs that clearly point to sales ? Overall store environment ? A lot of people shopping 40 PRICE PERCEPTION IN LATIN AMERICA IS DRIVEN MAINLY BY TWO ELEMENTS % total weight Source: Team analysis ? Reference price is the key lever of price perception, with KVIs as a very relevant ponent ? Range architecture – namely cheap alternative brands (OPPs) – are also very important ? Together they make up for 75% of the way a consumers builds price perception 30211941088Prices are usually low Cheap alternative brands Upscale store environment Frequent discounts Believable price ads Prices on wellknown items/bought most often Broad range of quality price levels Reference price Range architecture Environment Promotions Communications 41 1819DRIVERS OF PRICE PERCEPTION BY METROPOLITAN REGION % total weight * Causes poorer price perception Source: Team analysis S227。o Paulo Buenos Aires Santiago Mexico . Bogot225。 Reference price ? Prices are usually low ? Low prices on items bought most often/well known Promotions ? Good promotions ? Frequent discounts Range architecture ? Cheap alternative brands ? Broad range Environment ? Upscale store environment* Communications ? Believable price ads 4132312518143491631162626141463271642 171013DRIVERS OF PRICE PERCEPTION BY SEGMENT % total weight * Causes poorer price perception Source: Team analysis Avid bargain hunters High ine bargain hunters Range seekers on a budget Frustrated shoppers on a budget Quality seekers and time savers Reference price ? Prices are usually low ? Low prices on items bought most often/wellknown Promotions ? Good promotions ? Frequent discounts Range architecture ? Cheap alternative brands ? Broad range Environment ? Upscale store environment* Communications ? Pamphlets ? Believable price ads 1720151323242713518 181235202014251022 2521214243 A LIMITED NUMBER OF KVIs APPEAR TO BE ESPECIALLY IMPORTANT FOR BUILDING PRICE PERCEPTION * Based on McKinsey previous experience Source: Consumer survey Do you base your assessment of store prices on a few key products? How many items do you normally memorize the price of to assess the price level of a store? 7426No Yes 5 , 14 , 03 , 93 , 13 , 03 , 8Overall Bogot225。 Buenos Aires Mexico Santiago S227。o Paulo Average number of items consumers claim to memorize the price on to assess retailer prices Different consumers have different KVIs, as a result an individual store can have up to 100 KVIs* 46 OUR SURVEY HAS IDENTIFIED ABOUT 500 KVIs IN EACH METROPOLITAN REGION – ONLY ABOUT 150 ARE COMMON TO MULTIPLE SEGMENTS… Number of different KVIs mentioned – spontaneous responses 488406344327307150139130 147154638 545 474 474 461 Buenos Aires Bogot225。 Santiago S227。o Paulo Mexico D. F. Source: Consumer survey, team analysis Mentioned by only 1 segment Mentioned by at least 2 segments 48 … AND, OUT OF THESE, ONLY A DOZEN ARE ULTRA KVIs Number of different KVIs mentioned – spontaneous responses 739776 7358674550 5553142111198154 150 139 147 130 Buenos Aires Bogot225。 Santiago S227。o Paulo Mexico D. F. Source: Consumer survey, team analysis Ultra KVIs Only 2 segments 3 or 4 seg