Popcorn Promotion

Group 2Jiajia He, Ying Kuang, Mao Li, Danni Wu, Xi Yan
The biggest competitor of Orville Redenbacher is Pop Secret.
Promotion significant increase volume, penetration, buy rate and
frequency.
New Buyers will increase $341.9 revenue per week for 3 package
and $156.9 revenue per week for 10 package.
3-pack: Orville Redenbacher promote at the same time as Pop
Secret will increase Pop Secrets 28.6 units sales per week.
Pop Secret pre-empting promote increase Orville Redenbacher
extra 28 units sales.
10-pack: Pop Secret promotion would decrease Orville
Redenbacher on its volume, penetration, and buy rate.
There is cannibalization between Orville Redenbachers 10 pack
and 3 pack
UPC
Popcorn
Trip_total +
Trip_detail
Var: brand, package
Original Data
Market Share
Consumer
Behavior
Popular Product
Var: weekend, time
period123,Price,
Promotion
Popcorn Data
Promotion Rule
Promotion
Effectively
Measurements:
Volume, frequency,
Buy Rate,
Penetration,
Promotion
Data
20491
21002
(2.49%)
21297
(1.40%)
14665
15383
( 4.90%)
11256
(26.83%)
2010 2011 2012
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000
spring
summer
fall
winter(no
Dec.)
3550
3068
2675
1963
4951
4326
3488
2618
4660
3524
3450
3031
spring summer fall winter(no Dec.)
2010 4660 3524 3450 3031
2011 4951 4326 3488 2618
2012 3550 3068 2675 1963
Orville Redenbacher Quarter Sales
*Annual Sales not include Dec.
0
5000
10000
15000
20000
25000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
t
o
t
a
l

a
m
o
u
n
t

o
f

t
r
i
p
s
time(hour)
Traffic by Time
Light user 49519 Purchase less than 10 times in 158 weeks
Medium user 4719 Purchase more than 10 times and less than 50 times in 158 weeks
Heavy user 134 Purchase more than 50 times in 158 weeks
Light user
91%
Medium
user
9%
Heavy
user
0%
Purchase Frequency
Segmentation
8898
8350 8674
9297
11288
12143
11671
9286
8769 8717
9411
11701
13020
12058
8691
7851 7625
8227
10206
11124
10814
0
5000
10000
15000
20000
25000
30000
35000
40000
T
r
i
p

T
o
t
a
l
Daily Trips Through A Week
2012
2011
2010
Orville Redenbacher
&
Pop Secret
RTE
31%
Microwave
69%
Different Types Popcorn Sales
Microwave Popcorn
Brand Product Trip share Total share
Jolly Time 94% Fat Free, Butter 18% 2%
Orville Redenbacher Movie Theater Butter 17% 2%
Pop secret Butter 16% 2%
Brand Product Trip share Total share
Act II Butter Lovers 20% 4%
Pop secret Movie Theater Butter 12% 2%
Pop secret Extra Butter 11% 2%
Pop secret Homestyle 10% 2%
Pop secret Butter 8% 2%
Brand Product Trip share Total share
Orville Redenbacher Movie Theater Butter 8% 2%
Pop secret Extra Butter 20% 4%
Pop secret Homestyle 16% 3%
Pop secret 100 Calorie Pop Butter 10% 2%
Pop secret 100 Calorie Pop Kettle Corn 9% 2%
Pop secret 94% Fat Free Butter 8% 2%
27%
50%
18%
5%
3
43%
48%
9%
6
71%
29%
10
Orville Redenbacher Pop Secret Act II Jolly Time
$1.6
$1.1
$2.6
$1.0
$2.6
Orville
Redenbacher
Pop Secret
Price
49.9%
44.6%
20%
49.7%
1. Do they promote?
32.1%
2. What are the effects of promotion?
Volume (weekly sales)
Penetration(Market share)


Buy Rate (Purchase Probability)


Frequency (Average units per customer)


10 pack
Volume Market Share Buy Rate Frequency
No Promotion 20.08 7.17% 7.52% 1.0131
Promotion 81.75 23.94% 19.14% 1.4685
Differences
61.67** 16.77%** 11.62%** 0.4554**
3 pack Volume
Market
Share
Buy Rate Frequency
No Promotion 14.0534 11% 12% 1.0497
Promotion 123.2 29% 27% 1.5017
Differences
109.2** 18%* 15%** 0.452**
* Significant at 0.10 ** Significant at 0.05
3. New Buyers & Bringing Revenue
0
500
1000
1500
2000
2500
3000
3 package 10 package
623
132
No. of customers for Orville Redenbacher
Increased Revenue from new buyers of Orville
3 package: 341.9 dollars per week
10 package: 156.9 dollars per week
10 package customers price units revenue
Promotion 55.8 3.27 1.5 273.7
No
promotion
19.8 5.9 1 116.8
3 package customers price units revenue
Promotion 80.6 3.38 1.5 408.6
No
promotion
13.4 4.98 1 66.7
Competitor Promotion
-Promote at the same time
3
PACK
Parameters/ Estimates PS Promotion Or Promotion Both Promotion
Volume 0.4 109.6** -5.5
Penetration
-5%**
17%** -2%
Buy Rate
-5%**
15%** -3%
Volume 57.8** -1
28.6**
Penetration 19%**
-10%**
-3%
Buy Rate 17%**
-11%**
-3%
* Significant at 0.10 ** Significant at 0.05
OrVolume = 13.0 0.4 PSPromo + 114.2 OrPromo

+ 6.3 _

PSVolume = 17.3 + 56.6 PSPromo

+ 1.8 OrPromo 1.4 _

0
20
40
60
80
100
120
140
160
Orville
Weekly Total
Units
115
28
Pop Secret pre-
promotion
Pop Secret No pre-
promotion
3
PACK
Competitor Promotion
Pre-empting influences
* Significant at 0.10 ** Significant at 0.05
Pop Secrets promotion effect on
Orville Redenbacher
PACK
10
94% Fat
Free Butter
100 Calorie
Pop Kettle Corn
100 Calorie
Pop Butter
Home-style Extra Butter
Volume Penetration Buy Rate Frequency
No
Promotion
22.65 8.29% 8.32% 1.0273
Promotion 18.76 5.62% 6.39% 1.017
Differences
3.89** 2.67%** 1.93%** 0.0103
P Value .0093 <.0001 <.0001 0.3646
* Significant at 0.10 ** Significant at 0.05
Pop Secrets 3 pack effect on Orville Redenbachers 10 pack
Observation Volume Penetration Buy Rate Frequency
No Promotion 129 21.7984 1.43% 1.55% 1.0273
Promotion 29 20.9310 1.36% 1.55% 1.0126
Differences
0.8674 0.0611% 0.008% 0.0148*
P 0.5393 0.5337 0.9272 0.0949
Promotion influences among
different packages
Pop Secrets 10 pack effect on Orville Redenbachers 3 pack
Observation Volume Penetration Buy Rate Frequency
No
Promotion
119 33.8319 2.04% 1.85% 1.1390
Promotion 39 29.2821 1.55% 1.47% 1.0900
Differences 4.5499 0.497% 0.38% 0.0490
P value 0.5994 0.2652 0.2551 0.1127
* Significant at 0.10 ** Significant at 0.05
* Significant at 0.10 ** Significant at 0.05
Orville Redenbachers 10 pack effect on 3 pack
Observation Volume Penetration Buy Rate Frequency
No Promotion 154 33.2013 1.94% 1.77% 1.1287
Promotion 4 13.7500 0.959% 1.09% 1.0572
Differences
19.45**
0.98%** 0.68%** 0.0715
P <.0001 <.0001 0.0013 0.4647
Promotion influences among
different packages
* Significant at 0.10 ** Significant at 0.05
Orville Redenbachers 3 pack effect on 10 pack
Observation Volume Penetration Buy Rate Frequency
No
Promotion
131 22.0534 1.48% 1.61% 1.0279
Promotion 27 19.6296 1.09% 1.30% 1.0087
Differences
2.4238 0.389%** 0.310%** 0.0192
P 0.1481 0.0002 0.0011 0.1362
Promotion Rule
Promote 3 pack more while promote 10 pack less.
Dont promote at the same time as Pop Secret.
Promote 3 pack just one week after Pop Secret 3
pack promotion.
Recommendations
Q & A
Pre-empting for Orville Redenbacher
PACK
10
Observation Volume Market Share Buy Rate Frequency
No pre-empty 3 82.67 23.862% 18.998% 1.48
Pre-empty 1 79.00 24.159% 19.573% 1.44
Differences
3.67 .297% .575% .04
P value .834 .922 .841 .320
OR 10 pack promote after PS 10 pack (four weeks among 156
weeks available)
Cant do since all ORs promotion happened after PSs promotion
* Significant at 0.10 ** Significant at 0.05
Competitor Promotion 3 package
1. Promotion at the same time:
Regression:
OrVolume = 14.0 +0.4 PSPromo + 109.6 OrPromo

5.5
OrPenetration
= 0.12 0.05 PSPromo

+ 0.17 OrPromo

0.02
OrBuyrate
= 0.13 0.05 PSPromo

+ 0.15 OrPromo

0.03
PSVolume = 17.6 + 57.8 PSPromo

1.0 OrPromo + 28.6

PSBuyrate
= 0.17 + 0.17 PSPromo

0.11 OrPromo

0.03
PSPenetration
= 0.15 + 0.19 PSPromo

0.10 OrPromo

0.03
* Significant at 0.10 ** Significant at 0.05