A modern sales approach What manufacturers and DIY retailers can do

Publishing house Dähne Verlag © 2011 Dähne Verlag GmbH, page 2, presentation Rainer Strnad, Specialised magazines diy Fachmagazin

Publishing house Dähne Verlag © 2011 Dähne Verlag GmbH, page 3, presentation Rainer Strnad, Specialised magazines Trade Directories Buyer's Guides Show Guides

Publishing house Dähne Verlag © 2011 Dähne Verlag GmbH, page 4, presentation Rainer Strnad, Specialised magazines DIY International Statistics Rainer Strnad Managing editor

Attention factor at the POS © 2011 Dähne Verlag GmbH, page 5, presentation Rainer Strnad, Survey: Brands in the German DIY market by Konzept & Markt Manufacturers brands with striking visual merchandising Bosch42 % Black & Decker7 % Alpina6 % Metabo5 % Gardena5 % Osram3 % Kärcher3 % Knauf3 % < 2 %: Lux, Grohe, Philips, Wolff, Leifheit, Fischer, Stihl

Attention factor at the PoS (2) © 2011 Dähne Verlag GmbH, page 6, presentation Rainer Strnad, Manufacturers brands with striking visual merchandising at

Brand strength of manufacturers © 2011 Dähne Verlag GmbH, page 7, presentation Rainer Strnad, Brand strength depends on Awareness Familiarity Relevance Ownership Loyalty Comparison with 2010: similar situation Black & Decker Bosch Fischer Gardena Kärcher Metabo Weber-Stephen Wolf-Garten

DIY retailers © 2011 Dähne Verlag GmbH, page 8, presentation Rainer Strnad, Brief overview of the German market: top 10 Retail sales in mio (incl. VAT) Sales area in m² Obi Bauhaus Praktiker/Extra/Max Bahr Hornbach Zeus (Hagebau etc.) Rewe (Toom) Globus Eurobaustoff EMV-Profi Baywa

DIY retailers © 2011 Dähne Verlag GmbH, page 9, presentation Rainer Strnad, Short overview of the European market: top 10 Retail sales in bnStores Kingfisher Adeo Obi Praktiker Group Bauhaus Rautakesko Hornbach Zeus Homebase Rewe2.0361

Expansion into new markets © 2011 Dähne Verlag GmbH, page 10, presentation Rainer Strnad,

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 11, presentation Rainer Strnad, Do the DIY stores live up to these expectations? Choice Pricing level Quality and service Personnel Shopping atmosphere Advertising Location/Accessibility

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 12, presentation Rainer Strnad, Do the DIY stores live up to these expectations? Choice: Assessed as good +

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 13, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation -

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 14, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation - Quality and service: Optimization necessary here -

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 15, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation - Quality and service: Optimization necessary here - Personnel: Still a weakness from customers point of view -

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 16, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation - Quality and service: Optimization necessary here - Personnel: Still a weakness from customers point of view - Shopping atmosphere: Fault found with orientation and price marking -

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 17, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation - Quality and service: Optimization necessary here - Personnel: Still a weakness from customers point of view - Shopping atmosphere: Fault found with orientation and price marking - Advertising: The advertised products are the stars from the customers viewpoint +

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 18, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation - Quality and service: Optimization necessary here - Personnel: Still a weakness from customers point of view - Shopping atmosphere: Fault found with orientation and price marking - Advertising: The advertised products are the stars from the customers viewpoint + Location/Accessibility: The central rating factor in assessing the shopping outlet +/-

Image assessment/image factors © 2011 Dähne Verlag GmbH, page 19, presentation Rainer Strnad, Choice: Assessed as good + Pricing level: has become more significant. Industry doesnt quite fulfil expectation - Quality and service: Optimization necessary here - Personnel: Still a weakness from customers point of view - Shopping atmosphere: Fault found with orientation and price marking - Advertising: The advertised products are the stars from the customers viewpoint + Location/Accessibility: The central rating factor in assessing the shopping outlet +/- To sum up: Much potential for differentiation remains untapped -

More money for advertising? © 2011 Dähne Verlag GmbH, page 20, presentation Rainer Strnad, Awareness Familiarity Purchase Satisfaction Loyalty

Image and advertising © 2011 Dähne Verlag GmbH, page 21, presentation Rainer Strnad, Germanys top 9 Brand strength 2011 Advertising spendings 2010 in mio Growth rate spendings 2010/2009 Obi % Praktiker % Bauhaus % Hornbach % Toom % Hagebaumarkt % Max Bahr % Globus % Hellweg %

Efficiency of advertising measures © 2011 Dähne Verlag GmbH, page 22, presentation Rainer Strnad, Reach/Penetration Which advertising are DIY store customers most frequently aware of? Here it is possible to determine a percentage value: What percentage of customers are aware of the advertising? Importance for planning purchases Here the survey respondents allocated points from 1 = not at all important to 10 = very important

Reach/Penetration © 2011 Dähne Verlag GmbH, page 23, presentation Rainer Strnad, What percentage of customers are aware of the advertising? DIY retailers in comparison with grocery retailing Online advertising/newsletters11 % (7 %) Catalogues16 % (--) Radio17 % (6 %) Television24 % (10 %) Posters25 % (18 %) Ads in magazines/daily newspapers38 % (36 %) Leaflets/circulars/brochures46 % (72 %)

Planning purchases © 2011 Dähne Verlag GmbH, page 24, presentation Rainer Strnad, How important are the following media for planning your purchases? Television4.1 (4.4) Radio4.6 (4.4) Posters4.7 (4.8) Ads in magazines/daily newspapers5.6 (6.0) Online advertising/newsletters5.6 (6.4) Leaflets/circulars/brochures6.3 (7.4) Catalogues6.4 (--)

Leaflets © 2011 Dähne Verlag GmbH, page 25, presentation Rainer Strnad, Degree of efficiency of circulars/leaflets 40 %I take a close look at the circular/leaflet and study it quite intensively 35 %I look specifically for special offers 35 %I take a quick look at the leaflet, then throw it away 19 %I take the leaflet/circular along when I next go shopping 6 %I throw the circular/leaflet away without reading it

Advertising measures at the POS © 2011 Dähne Verlag GmbH, page 26, presentation Rainer Strnad, Perception of different advertising measures Posters in the parking/entrance area53 % Advertising on the shopping trolley6 % Screens5 % Floor stickers3 % Store radio/announcements2 % None above31 %

Some inferences © 2011 Dähne Verlag GmbH, page 27, presentation Rainer Strnad, Even powerful brands find it difficult to get their message over at the POS Put your efforts into leaflets Online is becoming important (OK, that was known already…) Online in Germany: Market (re)-entry of two players Online international: Kingfishers strategy. Byggmax, Clas Ohlson, Praktiker

Thank you for your attention! © 2011 Dähne Verlag GmbH, page 28, presentation Rainer Strnad, More information DIY International Regularly updated Newsletter for free DIYglobal Plus for subscribers Rainer Strnad