2005 june ap_insights
- 1. AP Insights_May05 24/5/05 3:08 PM Page a2 Issue 105 May 2005 The World’s Leading Marketing Information Company Data Integration: The Bigger Picture for Smarter Business Decisions As the world’s most experienced research company, we know that retail tracking data will only provide part of the story about your marketing performance. Knowing how much you sold is one thing, understanding the person who bought and why it sold is something else altogether. After all, you spend enough money each year promoting your products in-store and trying to attract your consumers’ attention! At ACNielsen, we tell you what no other research supplier can…the demographic profiles and lifestyle stages of your consumers, their trial and repeat patterns, their brand switching behaviours, their attitudes and preferences, where they shop, how often and how much they buy. And through the integration of in-store display information with our retail measurement data, we can tell you what promotions worked and what didn’t – when, where, how, and in how many stores…and how important these variables were in driving incremental sales. No other global research company offers the breadth of research services, across so many markets. Our unmatched ability to ‘integrate’ across all sources of research information, across Customised Research (consumer attitudinal, brand and advertising tracking), Retail Measurement (Retail Index, ScanTrack) and Consumer Panel inside information (Homescan and I-Scan) will provide you with a holistic understanding of the impact of your marketing activities. We’ll give you the bigger picture so you can make A Holistic Approach to Understanding the Real Impact smarter business decisions. of Your Marketing Initiatives 2 Monitoring Consumer Acceptance of a New Product Launch 4 Does One Brand Strategy Fit All Channels? 5 A 360º View of Fast Food and Impulse Habits 6 Nonoy Niles, President, ACNielsen Asia Pacific Do Consumers Do As They Say? 7
- 2. AP Insights_May05 24/5/05 3:08 PM Page 2 A Holistic Approach to Understanding the Real Impact of Your Marketing Initiatives Johnny Panagiotidis, Associate Director, ACNielsen Customised Research There is a growing expectation among clients when purchasing marketing research, that research suppliers should no longer deliver ‘simply data’ but instead provide ‘actionable insights.’ As one of our leading clients has stated, “insight is something which provides a new perspective or thought about the market or consumer which compels us to change the way we do business for driving growth.” This unique ability to integrate data sources provides our clients with a complete picture of what is happening within their categories and brands, and the impact of marketing initiatives on consumers’ attitudes, behaviour and sales. It enables us to provide our clients with powerful insights and actionable recommendations to the business issues they are facing. When companies undertake brand and advertising tracking research, whilst it may provide insights into the impact of marketing activities upon brand health measures, external factors such as pricing/price promotions are often inferred in terms of their impact. So for example, if during a TVC period price promotions are also implemented, and we see a lift in claimed trial, there is no way of measuring the impact of price promotions versus TVC on driving the gains in trial. Similarly, when measuring sales or consumer behavioural dynamics (via Homescan panel information), the impact of TVC and/or above- the-line (ATL) activity is often inferred. So for example, while Homescan data may reveal that additional buyers have been attracted to a brand during a TVC period, if there were price promotions during this same period, there is no way of measuring whether the new buyers were attracted by the TVC or price promotions or both. So we can see that measuring brand health, using various data sources in isolation (such as Brand and Advertising Tracking, Scan sales or Panel data), often means that researcher suppliers are unable to measure the full impact of marketing initiatives implemented by manufacturers. Our Data Integration Approach 2
- 3. AP Insights_May05 24/5/05 3:08 PM Page 3 a case study To see how data integration can provide clients with The Insights powerful insights and recommendations, let’s take a look at an example from an actual issue analysed as part • Claimed Winning Brands purchasing measures were being of a regular ‘Brand Diagnostics’ presentation undertaken maintained during the 18 months post TVC, via ‘multi- for one of our clients. The client subscribes to buy’ activity and not through the benefits strong brand ACNielsen | Winning Brands™, ACNielsen | ScanTrack™ equity offers, such as loyalty and the ability to command and ACNielsen | Homescan™ services, giving us the a price premium. In fact loyalty and brand equity had opportunity to integrate these three data sources. eroded over this period. • The significant improvements in actual scan sales The Issue (ScanTrack) and consumer behavioural dynamics (Homescan) were not consistent with ‘claimed’ Winning Our client, a major player within the category it competes, Brands purchasing measures, which were flat during the has a number of brands in its portfolio, with one brand in 18 months post TVC. This indicated that while ‘multi-buy’ particular having very strong brand equity in the category activity may have been successful in attracting new historically. ‘lighter’ buyers to the brand, these new buyers did not The brand, which is priced at a premium, has historically necessarily ‘perceive’ themselves to be ‘regular’ or ‘loyal’ had considerable ATL support, which has been very effective brand buyers. in creating loyalty and building strong equity. • Also, with significantly less consumers claiming they Over the last 18 months however, there has been no ATL would pay a price premium for the brand (Winning support at all. During this period, there had been a greater Brands), it appeared that frequent ‘multi-buy’ activity was focus on BTL activity. In-store price promotions, offering potentially de-valuing the brand in the minds of consumers. consumers the ability to purchase two units at a heavily • The multi-buy activity was encouraging heavier buyers to discounted price, known as ‘multi-buy’ activity, were purchase the brand primarily on promotion. And given becoming more frequent. the frequency of these promotions, it appeared that heavy buyers were now being ‘trained’ to purchase on ScanTrack sales looked to be quite healthy with strong promotion. growth achieved. So despite having no TVC support for an 18 month period, sales were at a higher level than they had Our Recommendations been when ATL activity was being implemented. With declining loyalty (attitudinal) and brand equity the So the issue the client faced was – was there was any need greatest concern for the brand, particularly within an for any ATL support in 2005? important key region, ACNielsen recommended that ATL support be undertaken in 2005: The Findings • Strategic, brand equity building advertising was ACNielsen | Winning Brands: recommended, not only to keep the brand top of mind • Winning Brands ‘claimed’ purchasing measures, such as but more importantly to ‘reinforce’ the brand’s unique ‘ever bought’, ‘buy regularly’ and ‘buy most often’, were proposition to consumers. flat 18 months post TVC activity. • ACNielsen also recommended that strategic advertising • Attitudinally, Winning Brands loyalty measures, such as be used in conjunction with more tactical ‘new news’ ‘favourite brand’ and ‘brand I would recommend’, had advertising, if possible, to support the client’s NPD, significantly declined 18 months post TVC. planned for launch later in 2005. This would provide • In line with this, there were significantly less consumers consumers with a more ‘rational’ reason to purchase the claiming they would pay a price premium for the brand. new variants. • As such, brand equity had significantly eroded, • Given the importance of the XXX region, heavier advertising particularly in a key region where the brand historically weights for any TV advertising were recommended within had very strong equity. this market. • To prevent the further devaluing of the brand in the ACNielsen | ScanTrack: minds of consumers, an increase in the price points for • ScanTrack sales showed that the strong volume growth ‘multi buy’ activity were recommended. Given the experienced, 18 months post TVC, was driven by pricing uncertainty regarding the impact on volume of such a promotions, namely the ‘multi-buy’ activity. change, a test market was advised. • Baseline sales, as a proportion of total sales, had, in • Finally, with NPD in 2005 focussing on greater innovation fact, declined over the 18 months post TVC. and introducing more premium variant offerings, it was recommended that the premium variants within the ACNielsen | Homescan: range be priced at different price points to the more • Homescan consumer behavioural dynamics revealed that traditional variants when implementing ‘multi-buy’ the ‘multi-buy’ activity was attracting ‘lighter’ buyers to activity. This would help to differentiate the premium the brand, whilst also encouraging ‘heavy’ buyers to variants from traditional. This could also be trialled purchase more of the brand on average. In fact, heavy within a test market to evaluate the impact on volume buyers were found to be purchasing significantly more of before rolling out nationally. their volume on promotion, and significantly less at regular shelf price. The case study above illustrates the complete picture available when analysing ‘claimed’, ‘behavioural’ and ‘actual’ sales data, as well as demonstrating the powerful insights this bigger picture can generate.
- 4. AP Insights_May05 24/5/05 3:08 PM Page 4 Monitoring Consumer Acceptance of a New Product Launch Belinda Rathbone, Associate Director, ACNielsen As with any new product launch or line extension, it is critical • What is the demographic composition of trialists? during the early stages to monitor product acceptance amongst • What was the source of volume gains – cannibalisation or consumers. Early indications allow for fine-tuning of the competitive steal? marketing mix to maximise year one sales opportunities and Similarly, it is crucial to understand what drives trial and repeat establish a solid foundation for growth. conversion in the minds of consumers – could there be factors It is important for marketers not only to understand who is potentially inhibiting acceptance of my new product? purchasing the product, but equally, the extent to which ACNielsen | Homescan information integrated with insights consumer perceptions impact actual consumer purchase dynamics. obtained from a quantitative customised research survey, As marketers, there are many factors we need to consider when ACNielsen | Omnibus, provides a comprehensive market read. evaluating new product success: Homescan provides answers to ‘who, what, where and when’, • How many consumers have purchased? while Omnibus provides important insight into ‘why’. • How many consumers have returned to re-purchase? a case study This case study demonstrates the collaborative benefit of integrating research information to generate action- Comparative Conversion Levels oriented recommendations. Comparative Trial Levels Main Barrier to Re-Purchase Amongst Trialists Efficacy 84% Leaves residue/marks 43% Not effective/doesn’t work 36% Main Barrier to Purchase Cited by Non Trialists Sounds unappealing/gimmicky 22% Dislike format 36% Dislike/will not use 28% With specific reference to the case Demographic Profile – Brand A Trialists study, current conversion rates sit Prefer other formats 4% Demographic Distribution – Lifestage somewhat below what we might Distribution of Household Buying Use/prefer other formats 3% expect given normative results. 17 Happy with current product used 33% While Homescan provides insight 14 into core diagnostics, customised 30 After four months in market, Brand A household trial compares research is required to unearth the favourably with that of competitive launches and category key consumer factors underlying 28 norms derived via Homescan. poor conversion. Product efficacy 12 is cited as the key factor inhibiting Brand A Buying Household However, opportunity exists to leverage a greater reach, if we future purchase, indicating that LS Young Singles & Couples LS Young Families can overcome those factors currently inhibiting trial. the product is falling short of LS Older Families LS Older Singles & Couples ACNielsen | Omnibus results suggest that: consumer expectations. Product LS Adult Household • The product format lacks appeal for a large cross section formulation may require further of the population. consideration in order to maximise sales efforts. • Satisfaction with the current product remains high, From a demographic standpoint, both methodologies point to the suggesting the launch activity is not sufficiently fact that Brand A communications are reaching the core target. motivating to encourage a change in consumer behaviour. Homescan further confirms that Brand A is doing so without a greater than expected cannibalisation of the core range. Repeat conversion is also a key determinant of longer-term Therefore, if the manufacturer is able to address the issues product success. It is critical that marketers bond consumers to identified, Brand A has every chance of success. their brands and give them a reason – a key point of difference – that justifies the purchase decision and sustains a loyal buyer base. New Brand Source of Volume 4
- 5. AP Insights_May05 24/5/05 3:09 PM Page 5 Does One Brand Broadening distribution channels has long been seen as a way to increase the sales of categories and brands. This is particularly true in categories that rely heavily on impulse purchases – if you can range in Strategy Fit All additional channels, you increase your chances of converting that store’s traffic into buyers of your brand. Channels? But how does a manufacturer go about maximising these sales? Is it sufficient merely to translate a brand plan based on scanning and Shan Xifaras, Associate Director, ACNielsen Australia consumer data into plans for the convenience trade? a case study Let’s take a look at an example from an actual (heavily disguised) study in which we look at a major brand that sells Single Pack Impulse primarily multi-packs in traditional supermarkets and single Confectionery (Source:ACNielsen I-Scan™) packs within convenience outlets. Here we have substituted the original category with confectionery and disguised the brand names. By comparing the purchasing behaviour within supermarkets using ACNielsen | Homescan™ against the purchasing behaviour of individuals within convenience outlets (petrol stations, corner stores/newsagents), using ACNielsen | I-Scan™ Impulse, we can demonstrate the need for channel-specific implementation of brand and category plans. Within I-Scan the situation within the Impulse sector for Galaxy is very different. Here frequently need to be aimed at Multi-Pack Take Home Galaxy single packs hold the increasing out of home Confectionery star position with comparatively consumption of the category as a (Source: ACNielsen | Homescan™) strong reach and adoption. whole rather than merely switching consumption from the competitive To effect growth within the set as is the case in Supermarkets. convenience channel, Galaxy must protect its strong position This key imperative to increase and capitalise on this in trade frequency for Galaxy really applies negotiations for preferential across all age groups with the positioning and shelf allocation. exception of the over 55’s, who Additionally, Galaxy needs to have a lower propensity to buy encourage existing customers to impulse confectionery. purchase more often. In store marketing initiatives and However, given that Impulse broader advertising focussing on The manufacturer of Galaxy Galaxy buyers are already very maximising the frequency of the has aggressive growth targets loyal to the brand, the impulse buy are deemed necessary for the brand to achieve in initiatives to encourage existing for Galaxy to achieve the required the in home consumption customers to buy more growth. sector. To achieve this growth they do Galaxy, this should the brand must both attract form a core element of the Key recommendations for Galaxy in single pack more buyers and increase the brand growth strategy, namely impulse sector: Negotiate with trade for preferential amount they buy if it is to to encourage buyers to switch positioning and shelf allocation, utilise in-store compete effectively against away from Venus. Venus. marketing initiatives and broader advertising to The demographics of the Venus increase the level of impulse consumption. In comparison, Venus is a buyers shows that this activity star performer, attracting a should primarily be aimed at the high proportion of category 45-54 year old primary shoppers. As the case study illustrates, the consumer dynamics driving buyers who buy large sales within Supermarkets can differ markedly from those quantities of the brand. Additionally, to improve the reach of the brand, Galaxy will driving sales within other channels. Looking at how Galaxy buyers need to generate interest allocate their category among the under 35’s, With ACNielsen | I-Scan™ Impulse, purchases reveals that they currently a major area of providing critical insight into what buy almost as much Venus as underperformance for Galaxy. and who drives impulse purchasing, Key recommendations for Galaxy in multi pack take channel specific category and brand home sector: Target 45-54’s to encourage switching plans can be completed to away from Venus and focus on generating trial effectively initiate the required consumer behavioural change to among under 35’s. maximise sales. ACNielsen | i-sights and ‘Integrity’ ACNielsen | i-sights provides consumer panel information in a graphic, navigational format that allows fast access to market highlights and highlights trends and threats. And for Asia, the To further leverage our integrated offering, ACNielsen will shortly be ’Integrity’ component of the software provides access to integrated rolling out ACNielsen | i-sights software for Consumer Panels across Consumer Panel and Retail Measurement information – a unique the region. Client response to the introduction of ACNielsen | i-sights capability no other research supplier can provide. in Australia has already been very enthusiastic. 5
- 6. AP Insights_May05 24/5/05 3:09 PM Page 6 A 360º View of Fast Food and Impulse Habits Eva Ng, Associate Director, ACNielsen Hong Kong There is huge market growth potential for retailers and manufacturers in the out-of- home, fast food and impulse sector. According to an ACNielsen survey conducted during the establishment of the I-Scan™ Impulse individual consumer panel in Hong Kong, people make an average of 20 ‘impulse’ food and drink purchases per month. Monthly Purchase Frequency for Impulse Food and Drinks in Hong Kong But where and how to exploit the opportunity? With its launch in 2004, ACNielsen | I-Scan Impulse aims to deliver never before available insight into the dynamics of out of home food and beverage consumption in Hong Kong. I-Scan Impulse shows that In addition, in a global consumer survey while the Modern Trade is I-Scan and Homescan: Total Impulse and Packaged conducted over the Internet by ACNielsen a dominant channel for Products Value Share of Trade Total HK. April – Sep ‘04 in October 2004, 30 percent of Asia major grocery shopping Pacific consumers claimed to eat take- taken home, it only away at least once a week, closely behind accounts for around 10 the US (33%). On a market-by-market percent of out-of-home basis, nine of the top 10 markets globally consumption purchases. for weekly take-away consumption hail In the out-of-home from Asia Pacific. And in Asia Pacific, market, fast food shops despite 12 percent claiming never to eat are, not surprisingly, a key fast food, the region has the most take- channel for mature adults, away addicts, with 35 percent reportedly while teenagers make most eating fast food at least three times a of their purchases through week to as often as once a day or more. school canteens. According to the ACNielsen survey, Hong Kong ranks the world’s No. 1 in terms of Among the different food and drink items purchased on-the-go, beverages are the most frequency of fast food restaurant visits popular, comprising at least 50 percent of total impulse purchases. This is even more followed by Malaysia (59%) and the prominent in convenience stores where over 60 percent of total food and drink Philippines (54%). purchases are beverages. In Hong Kong, Top 10 Global Markets for Weekly Beverages are the most popular item purchased while on-the-go, I-Scan Impulse Fast Food Consumption while in CVS 40% of shopping trips are food only found lunch time to Market % eating take-away be the most popular at least once a week out of home consumption Hong Kong 61% opportunity, Malaysia 59% followed by Philippines 54% breakfast and Singapore 50% afternoon tea. Thailand 44% Teenagers tend to China 41% spend more during India 37% the afternoon, US 35% probably snacking Australia 30% after school, while New Zealand 29% mature adults spend more on breakfasting out of home. Understanding what consumers like to snack on at different times of the day presents an opportunity for retailers and Source: ACNielsen Online Survey, October 2004 suppliers to have the right product offering available to cater for all age groups. 6
- 7. AP Insights_May05 24/5/05 3:09 PM Page 7 Attitudes Towards Grocery Shopping Do Consumers Do Drive Differences in Banners Shopped Average Annual # of Grocery Banners Shopped As They Say? Like One- Shop in 1 or Don’t Have Shop a Wide Todd Hale, Senior Vice President, Homescan, ACNielsen US Stop 2 Stores for Time to Shop Variety of Shopping Groceries Multiple Stores A significant advantage consumer panel data brings to both Stores manufacturers and retailers is the ability to view behavioural Agree and attitudinal measures from the same households. As these Strongly 3.6 3.4 3.3 4.7 measures are combined, they yield consumer insights not possible through standalone customised survey research Agree projects. And they enable us to answer a key question: Do Somewhat 3.9 3.8 3.6 4.5 consumers do as they say? Neither Agree or When it comes to shopping choices, it appears that Disagree 4.2 4.2 3.9 4.0 consumers do, in fact, shop as they say they do. In the following table we see that households who like one-stop Disagree shopping for their groceries make fewer all-outlet shopping Somewhat 4.4 4.7 4.3 3.7 trips. The same is true for households who shop in one or Disagree two stores and for households who tell us they don’t have Strongly 4.5 4.7 4.5 3.3 time to shop multiple stores. Conversely, households who say they shop in a wide variety of stores make many all-outlet shopping trips. Finally, we see that consumers who have different attitudes with respect to the importance they place on private label or Attitudes Towards Grocery Shopping store/trade deals show much different purchasing patterns. Drive Differences in Shopping Trips Households who strongly agree that they buy store brands exhibit private label sales that are 33 percent higher than the average for Annual All-Outlet Trips Per Shopping Household all US households. And, households who strongly agree that they Like One- Shop in 1 or Don’t Have Shop a Wide use ads for planning their weekly grocery shopping exhibit Stop 2 Stores for Time to Shop Variety of store/trade deal sales that are 47 percent higher that the average Shopping Groceries Multiple Stores US household. Stores Agree Attitudes Towards Grocery Shopping Strongly 182 184 165 236 Drive Differences in Brand and Deal Buying Agree Sales Index vs Total US Households Somewhat 194 189 180 217 Buy Store Brands Use Ads for Planning Neither vs Annual vs Annual Agree or Private Label Sales Store/Trade Deal Sales Disagree 213 205 196 199 Agree Disagree Strongly 133 147 Somewhat 224 227 215 185 Agree Disagree Somewhat 114 102 Strongly 234 220 232 176 Neither Agree or We also see that attitudes towards grocery shopping drive Disagree 95 71 differences in the number of grocery banners (ie, Kroger, Disagree Safeway, etc) where US households shop. Households who Somewhat 86 64 prefer not to shop around shop in a fewer number of grocery Disagree banners, while households who enjoy shopping in a wide Strongly 70 62 variety of stores shop in more competing grocery stores. In today’s competitive world, retailers and manufacturers are looking to leverage consumer insights to help them build winning strategies. It is no longer acceptable to have a one-sided view of consumer buying or shopping habits and practices. Linking consumer attitudes with actual shopping behaviour not only provides manufacturers and retailers with an understanding of how consumers think and what is important to them, it enables quantification of attitudinal measures with behavioural measures from the same households. So, when qualitative research uncovers an attitudinal shift or trend, the linkage with behaviour provides a quantitative measure to determine whether or not a reaction to the shift or trend is worth the investment. The above article featured in the January 2005 “Facts Figures & the Future” newsletter, which can be found at www.factsfiguresfuture.com. 7
- 8. AP Insights_May05 24/5/05 3:08 PM Page a1 Copyright © 2005 ACNielsen. All rights reserved. Produced by ACNielsen Communications Department, ACNielsen Centre, 11 Talavera Rd, Macquarie Park, NSW 2113, Australia. 8