Harness The Consumer Pull

Indra Nooyi

Lesson time 08:39 min

In this lesson, Indra breaks down the differences between a customer and a consumer, and introduces important terminology and strategies, including trading area analyses and capitalizing on big holidays.

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Topics include: In this chapter, Indra breaks down the differences between a customer and a consumer, and introduces important terminology and strategies, including trading area analyses and capitalizing on big holidays.


[MUSIC PLAYING] INDRA NOOYI: So in the consumer products industry which I was a part of, our retail partners, all the retail stores, the 7-Elevens or Costco's, Walmart, are all considered our customers. As are the food service customers like the restaurants, malls, schools, colleges. Then you have the consumer, the actual person who buys the product and consumes it. So the difference is that a customer is somebody who is a middleman in the chain, a consumer actually consumes the product. So we have to understand consumer behavior to be able to educate our customers what they should stock on the shelves and then go off and sell the product, stock the shelves so that the consumer can pick it up. [MUSIC PLAYING] So in order to be an effective leader, especially selling through a retail channel to an end consumer, you've really got to understand the trading area of every individual store, not just the retailer, every individual store, and how are you going to create a push mechanism through these retailers to create the consumer pull? The way a retailer decides what to buy is what they think the consumer wants. So you always have to look at the trading area that that store serves, what's the demographic of the trading area, age, income, family size? And based on the trading area of every store you know who the shoppers are likely to be in that store, and what kinds of products you should stock for that shopper. So every store has a trading area analysis. And based on the trading area analysis, we develop a planogram for the store, to say these are all families that like to buy regular Lay's and drink a combination of regular Pepsi and Diet Pepsi. Or they have teenage kids, they love Mountain Dew. So based on the trading area analysis, we stock the shelves. And so even something as simple as stocking the shelf requires a lot of granular analysis. In this case, trading area analysis, linking it with activities that are going to happen in the local schools. Linking it to temperature. If it's going to rain, there's going to be no tailgate parties. So don't put out inventory there and then have all your tailgate parties canceled. So we have a weather database we link to, to see what we need to do, should we direct them to the bowling alleys, if it starts to rain? Should we direct them to the local movie house if it starts to rain? How do you give incentives for people to go someplace and enjoy themselves in spite of the rain, knowing that the game is rained out? Even with that granular data, a great opportunity to create consumer pull is around big holidays. So for every holiday based on what we think the consumer buying pattern used to be and what we want it to be, we stock the shelves. So you got to advertise, great pricing at Kroger, come and buy it. And incidentally, you can enjoy these products at your tailgate party or your backyard barbecue for Memorial Day. So you talk to the consumer about the back...

About the Instructor

Ever wonder what it takes to be the CEO of a Fortune 50 company? Indra Nooyi didn’t set out to become the first woman of color to do so. She simply (and tenaciously) focused on big ideas. As the former CEO of PepsiCo, Indra transformed a global industry. Now she’s teaching you her transformational approach to leadership. Learn to simplify complex problems, persuade others to buy into your vision, and discover how leading with purpose can improve your life beyond the boardroom.

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Indra Nooyi

Indra Nooyi, former CEO of PepsiCo, teaches you to think big, be brave, and make purpose-driven changes at work.

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