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In s i g h t s t o d a y f o r t o m o r row’s d e c i s i o n s

Spring 2005

Winning Retail
Strategies Start
with High Value
Consumers

Ethnic Marketing by the Numbers:


Integrating Diverse Data Can Reveal New Opportunities

Jack-in-the-Tiffin-Box: Unconventional Paths to


New Product Idea Development

Winning the Case for Better Distribution:


Optimizing Distribution for Mid- to Small-Sized Manufacturers

Canada’s Aging Boomers: A Golden Opportunity


CONSUMER
INSIGHT:

For More Information

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Understanding

Consumers,

Completely.
In every issue…
Volume 7, No. 1

Business Tools
Featuring:
ACNielsen Retail ACView
CBP—Category Business Planner
Spectra Distribution Builder
Homescan Shopper Trends
ACNielsen Target Track 2.0
TDLinx Location Information Management
Homescan New Product Alert
Homescan Shopper Optimizer
Spectra Advantage Canada
LiquorTrack
Spectra Category ShareCast
Spectra Targeted New Customer List

Publisher
ACNielsen
Editor
Mark Chesney
Contributing Writers
Todd Hale, Senior Vice President
Consumer Insights, ACNielsen

Chris Hammer
Senior Product Manager
U.S. Marketing

John Skolnicki
Associate Client Director
Client Service

Sangeeta Gupta
Subhransu Rout
Seemeen Khan
ACNielsen ORG-MARG

Steve Kapinus, Director


Spectra Business Development

Design & Layout


Blue Lemon Design
Editorial Board
Joe Bucherer
Josie Cirasella
Laurel A. Kennedy Marketing/Communications
Kathy Mancini
Renee O’Malley
Danell O’Neill
Slack Barshinger & Partners

Copyright © 2005 ACNielsen. Printed in USA. All rights


reserved. ACNielsen, ACNielsen with globe design,
ACNielsen Answers, ACNielsen Retail ACView, ACNielsen
LabelTrends, Answers Interactive, CBP, Consumer Direct,
DecisionSMART, Homescan, RDH and Scantrack are
trademarks or registered trademarks of ACNielsen (US), Inc.
Spectra, the Spectra logo, Spectra HispanIQ, Spectra
InfiNet, Consumer 360 and the Consumer 360 logo are
trademarks or registered trademarks of Spectra Marketing
Systems, Inc. TDLinx and the TDLinx logo are trademarks or
registered trademarks of Trade Dimensions International,
Inc. Other brand, product or service names are trademarks
or registered trademarks of their respective companies.
6 Spring 2005, Volume 7, No. 1

6
Winning Retail Strategies Start with High Value Consumers
High value consumers no longer declare allegiance to a single channel for life. The
battle for these sought-after shoppers is difficult. Like any good battle plan, success
relies on the quality of field intelligence and the ability to deploy assets for maximum
impact. The Food Marketing Institute (FMI), along with ACNielsen, conducted a

10 landmark research study of U.S. households and how they shop for food.

10
Ethnic Marketing by the Numbers:
Integrating Diverse Data Can Reveal New Opportunities
The ethnic makeup of the U.S. grows by about 2.5 million people each year. Today,
Hispanics and African-Americans comprise more than a quarter of the total U.S.
population. With this demographic shift comes greater economic clout for minori-
ties. Manufacturers of consumer packaged goods must increasingly appeal to
minority groups and reflect their cultural preferences to succeed.

14
14 3
Jack-in-the-Tiffin-Box: Unconventional Paths to

| Consumer Insight | Spring 2005


New Product Idea Development
To grow, many companies today focus on new product development. Under the best
of circumstances, product innovation is a challenging activity. The challenge grows
when the targeted consumer is a child. How, then, can companies gather informa-
tion to guide product development efforts, especially as they relate to children? In a
recent effort, ACNielsen ORG-MARG researchers addressed this issue using an
innovative approach to gather credible, useful data.

18
18
Winning the Case for Better Distribution:
Optimizing Distribution for Mid- to Small-Sized Manufacturers
Everyone knows the best packaging, best quality of food, and best advertising
campaign gets you nowhere without distribution. With competition fierce on retail
shelves, small manufacturers need insights that can help prove why they should be
there. By gaining distribution in key retailers, the payoff can be huge.

22 22
Canada’s Aging Boomers: A Golden Opportunity
They aren’t babies anymore. The brash, postwar generation that once lived by the
anthem “I hope I die before I get old” is getting old, and is still the most influential
consumer group in Canada. These baby boomers will continue to set purchasing
c o n t e n t s

trends for at least the next 20 years, which represents a golden opportunity.
Tim Callahan
President
ACNielsen North America

A Drive for Innovation


Cultural Change. It has become a popular business term. When companies
talk about globalization, branding, organizing, resourcing or outsourcing, we
hear about it. Companies that are acquired (or divested) go through it. We
have also seen consumer demographic shifts, right here at home, that speak to
cultural change. And all of it impacts our business.

At ACNielsen, we are also continuing our cultural change to meet the needs
of you, our clients. Our recently completed Consumer 360 conference repre-
sented a key milestone in our journey, as we shared the ACNielsen and VNU

At ACNielsen, vision for the future of our industry-leading services. Just one year ago, we
unveiled our Homescan MegaPanel, the industry’s largest consumer panel.
4
we are also Today, it has expanded to over 90,000 households and is ahead of schedule
Spring 2005|

for completion. We also introduced LabelTrends to understand product health


continuing our claims at the shelf. Consumer Direct, DecisionSMART and Retail ACView are
other new and exciting services now available. Spectra Marketing has also
cultural change launched Targeting Plus, Spectra HispanIQ, Spectra InfiNet, and Category
ShareCast, to name a few.
to meet the
Consumer Insight |

The conference also served as a reminder to me just how much the industry
needs of you, has changed and how we all have to continually work to stay ahead. We will
continue to be consumer-centric, comprehensive, technologically open and
our clients. flexible. Our strategy will be sharply focused on the industry’s most challeng-
ing marketing and sales issues, including:

• Complete coverage of consumer behavior at all levels of the marketplace—


in the store, at home, on-the-go and online—along with measurement of
i n s i g h t

media consumption;

• Deeper knowledge of consumer attitudes and preferences, built on expanded


consumer panel research, customized research and other sources;

• A practical and action-oriented focus on the specific marketing and sales


issues that have the greatest impact on growth, including marketing ROI, new
product development, segmentation and targeting, assortment, pricing, promo-
tion, supplier management, consumer management and in-store execution;
e x e c u t i v e

• New data harmonization and business intelligence capabilities to integrate


information from a wide range of sources and organize it effectively and
accurately against specific marketing and sales issues;
• Web-based decision-support services
that place information and analytical
tools in the hands of the right people
at the right time in the right place;

• Advanced modeling & analytical


services that deliver effective and
easy-to-use tools for analyzing marketing initiatives and accurately
forecasting the impact of alternative approaches;

• Assertive, proactive client service that helps clients challenge assumptions


and develop creative solutions, based on a strong blend of broad consumer 5

| Consumer Insight | Spring 2005


marketing knowledge with deep expertise in specific business issues.

At the conference, Steve Schmidt, ACNielsen’s president and CEO, put it best:
“Our job, pure and simple, is to help the industry grow.” This is easily said,
but in today’s complex marketplace—driven by diverse, ever-changing con-
sumers—it takes focus and commitment. Our strategy is far reaching, but the
associates at ACNielsen are confident and energized.

Our goal is to match your drive for innovation in marketing with an equally
intense drive for innovation in information services. We will continue to
help you identify your best opportunities, focus your spending and reach the
right consumers, at the right time, in the right place, with the right messages
and incentives.

To do that, we will:

e x e c u t i v e
Listen—to your needs, to your issues, to the things that are keeping
you up at night;

Learn—your business, your challenges, and how we can help solve them;

Leverage—the global power of One VNU to provide you the insights and
expertise unmatched in the industry, and;

Lead—the industry, by taking on the issues and initiatives that will continue
to supporting your business.
i n s i g h t

Listen, Learn, Leverage, Lead. This is our focus and commitment to you
and the industry.
Winning Retail
Strategies Start
with High Value
Consumers
Todd Hale, Senior Vice President
Consumer Insights, ACNielsen

6
Spring 2005|
Consumer Insight |
s t o r y
c o v e r
A
lthough cinematic in scope and intensity, there is Key Learnings
nothing entertaining about the battle between gro- Seven areas of learning emerged from the research. Some
cery and other formats for high value consumers findings were surprising. Others reinforced historical
who no longer declare allegiance to a single channel for trends. Still others were encouraging signposts for predict-
life. Like any good battle plan, success relies on the quality ing consumer behavior. All provide a fact-based foundation
of field intelligence and the ability to deploy assets for that retailers, wholesalers and manufacturers can use to
maximum impact. develop consumer-centric strategies to woo and win high
value shoppers.
Setting the Benchmark
One of the most powerful allies supporting the 46,000 U.S. 1. Grocery Trip Erosion Continues. Everybody wants a piece
retail food stores in their crusade for food basket domi- of the top-spend consumer. Grocery’s longstanding trip
nance is the Food Marketing Institute (FMI). In keeping frequency advantage was based on three factors: proximity,
with its charter to conduct programs in research, education, proliferation and product set. Now that competitive
industry relations and public affairs, the FMI selected formats have mounted aggressive expansion campaigns and
ACNielsen to “conduct a landmark research study of U.S. awakened to the pulling power of fast-moving consumer
households and how they shop for food. This study is packaged goods, those traditional Grocery advantages
expected to create a basic benchmarking tool regarding con- have diminished.
sumer shopping behavior and attitudes.”
Look for an increasing number of trip diversions to non- 7
The result of that initiative is the FMI/ACNielsen study Grocery channels as consumers combine multiple trips into a

| Consumer Insight | Spring 2005


Winning Strategies for Your Most Important Shoppers, single stop, picking up packaged goods at the dollar, home
which will be summarized in the pages of Consumer improvement or office supply store.
Insight magazine in a two-part article. This, the first
2. Shopper Focus Is a Must. It’s a case of lifestage strategies
installment, discusses research design, objectives and
trumping monolithic marketing. The days of lumping
topline findings. Part two will contain a more granular
customers into one homogeneous segment are over.
discussion of store universe trends, alternative channel
The age of lifestage marketing is upon us, and shopping
development, category trends and consumer-centric
preferences reflect the progression of family formation
retail opportunities.
from young singles to maturing families to older singles.
Research Objectives
Household composition surfaced as a major driver of
The purpose of the study was to demonstrate how retailers
channel shopping and category buying dynamics. Different
can leverage both behavioral and attitudinal consumer
lifestage shoppers exhibited different shopping and buying
insights to create competitive advantage and differentiate
habits, calling for a diversified set of marketing and pro-
offerings. Research objectives include:
motion strategies. Know thy customers’ wants and needs,
• Examine how shopping behavior differs across segments. and leverage frequent shopper programs to target top-
spend shoppers and specialty sub-segments such as the
• Determine the ways demographics and attitudes impact
elderly and ethnic groups.
c o v e r
where and how consumers shop.

• Detail the competitive arena for retail shopper


segments, including the mix of channels shopped.

• Identify the departments, categories and services


that appeal to the unique needs of different retail
shopper segments.
s t o r y
3. Cross-Channel Shopping Opportunities. Two trends
Assortment has been a pivotal tactical advantage for
headlined in the business press these days afford intriguing
Grocery channel, but given the growth in value-
opportunities for retailers: co-opetition and acquisition.
priced/reduced assortment retailers (like Wal-Mart, Club
Coined by Ray Noorda of Novell, and championed by
Stores, Save-A-Lot and Aldi), one must question the con-
professors at the Harvard Business School and Yale School
ventional wisdom of this practice. Increasing assortment
of Management, the idea of co-opetition is simple: collabo-
above 320 items yields an incremental 25% sales gain for
rate with the competition to succeed. It’s a spot-on
Hi/Lo Grocery vs. just 8% for Supercenters and 12% for
approach for Grocery stores, given their high degree of
EDLP formats. The challenge: optimizing assortment for
interaction with other channels.
maximum pull and repeat business without carrying excess
In the case of Specialty Retailers like electronics, home inventory. One approach would be reducing center store
improvement or office supply stores, Grocers could pursue assortment while beefing up natural and organic offerings,
store-within-a-store concepts to establish a satellite operation expanding the entertainment and home goods sections.
without investing in a capital-intensive Greenfield operation.
5. Attitudes Matter. Want to categorize customers by chan-
Another alternative would be to propose joint promotions
nel segment? Use behavioral data. But if you want to strate-
that benefit both parties like specialty retailer gift cards, sam-
gize how to differentiate offerings, examine shopper atti-
pling stations and cross-shopping reward programs. Either
tudes. For this section of the study, panelists answered a bat-
way, strategic co-opetition can strengthen grocery sales while
tery of questions to ascertain attitudinal differences toward
8 diverting trips from poaching formats such as Mass
grocery shopping. The wide-ranging scope covered prefer-
Merchandisers or Warehouse Clubs [See chart 1].
Spring 2005|

ences for everything from free-form to list shoppers, from


scratch to RTE meals, from the promotional indifferent to
Chart 1: Alternative Channels Important to Grocery ad sensitives, from shopaholics to the shopping challenged.
Trips per shopping household

Enough differences surfaced by format to suggest clear,


Top Top Top Top
Supercenter Hi/Lo EDLP Specialty attitude-driven competitive opportunities. Some examples:
Consumer Insight |

Hardware/Home
Improvement
8.1 8.4 8.8 8.9 Hi/Lo Grocery retailers will find their top-spend shoppers
Liquor 5.6 7.3 6.5 6.6 highly responsive to ads and frequent shopper programs—
Pet 4.1 5.4 4.7 6.2
Bookstores 3.9 5.0 4.0 4.4 more so than other channels.
Stationery 3.5 4.5 3.7 3.7
Electronics 3.0 3.5 3.4 3.5
Office Supply 2.9 3.4 3.0 3.5
It will come as no surprise to EDLP formats that their bud-
Toy Stores 2.5 3.0 2.6 2.8 get-minded customer base uses price as the dominant selec-
Source: ACNielsen Homescan, Total U.S.—52 weeks ending 6/26/04
tion factor. Specialty Grocery top-spend shoppers weighed
in with high scores on questions about healthy foods,
Retailers might borrow a page from the manufacturer home cooking and scratch meals. Supercenter top-spend
playbook (think P&G and Gillette) and consider mergers shoppers opt for one-stop shopping at large properties.
and acquisitions as an alternative strategy for fending off
6. Food First—Perform on the Perimeter. Talk about a
increasingly ravenous competitors. Operating advantages
s t o r y

good news/bad news scenario. While Grocery earns high


associated with volume buying clout, and an expanded
satisfaction scores on top-ranked selection attributes such
footprint boosting brand presence and convenience, are
as convenience, weekly specials, fresh produce, fresh meat
just two of the potential benefits.
and wide selection, it remains highly vulnerable to incur-
4. Trip Capture Opportunity. Grocery’s legacy strength in sion by price/value-oriented operators on the very impor-
food remains a powerful force for offsetting trip decay. tant good value and low price criteria.
Top-spend Supercenter customers (defined as the top
As competitors push forward with aggressive expansion
c o v e r

one-third of Supercenter shoppers based on their annual


campaigns, the current strongest point of difference for
dollar expenditures within this retail format) head for the
grocery—convenience—will begin to dissipate. Weekly ads
Hi/Lo Grocery frequently when looking to shop the dairy,
deli, fresh produce or meat departments.
and frequent shopper programs serve as a means to distin- Demand was underwhelming for additional services which
guish grocery formats, but at a cost prohibitive to most included drive-through pharmacy, in-store sampling, on-site
EDLP retailers. The lesson: focus on what grocery does coffee shop, gas pumps and cooking lessons. Adding these
best—food—while providing a diverse assortment appeal- services to the format mix might attract a marginal number
ing to top-spend shoppers [See chart 2]. of new customers, but prove to be an excellent way to
cement relationships with loyal shoppers by retaining their
Chart 2: Areas of Strength Aren’t Driving Satisfaction and interest and patronage with intriguing new offerings. The
Satisfaction With Price/Value Is Very Low
Threat as price/value formats become more convenient cost-benefit equation would evaluate improved customer
% Responses from Attributes most Extreme satisfaction and competitive differentiation benefits against
Top Grocery Important in Satisfaction with
Shoppers Grocery Store Selection Attributes incremental cost.
Fresh Produce 45 33
Good Value 45 22
Fresh Meat 43 30
Weekly Specials 38 35
Low Prices 37 18
Convenient 35 52 Survey Design
Wide Selection 32 30
Three primary data sources were used to acquire the necessary
Source: ACNielsen Homescan
input for the study: ACNielsen Homescan Consumer Panel,
ACNielsen Strategic Planner service and the ACNielsen
7. Differentiate, but Don’t Forget Price/Value. Value pric- Wal-Mart Channel service.

ing is here to stay, with a vengeance. The trick is finding Behavioral (purchase) information was garnered from the 9
the balance between spending on differentiating programs

| Consumer Insight | Spring 2005


ACNielsen Homescan Consumer Panel, which provides longitudi-
and services, without compromising the ability to price nal buying and shopping information for 91,500 U.S. households.
ACNielsen Homescan information encompasses purchase date,
competitively in key categories.
shopper demographics, retailer/channel shopped, frequent shop-
per card usage, payment method, coupon source, trip purchase
Hi/Lo Grocery and Supercenters registered the highest
amount, and for each UPC, the number of units purchased, price
availability scores across the most services (prepared paid and deal type for each household shopping trip.
food/meals, fresh flower department, banking/ATM, in-
Attitudinal information was captured by fielding a 38 point ques-
store pharmacist, longer store hours, natural/organic food
tionnaire that investigated how ACNielsen Homescan panelists:
section and in-store film development). Many services were
• felt about the grocery shopping experience,
available at fewer than six in 10 outlets, leaving room for
geographic extension [See chart 3]. • defined and shopped the store universe,

• ranked store selection characteristics such as size, assortment


Chart 3: Interest in Additional Services Varies by Format— and perimeter departments,
Most Do Not Appeal to Large Percentage of Shoppers • responded to price and promotion strategies such as feature
Most Requested Services Ranked within Top Hi/Lo Grocery Shoppers
ads, frequent shopper cards or everyday low pricing (EDLP),
% Responses Top Hi/Lo Top EDLP Top Specialty Top
from: Grocery Grocery Grocery Supercenter • viewed meal alternatives including home-cooked meals, ready-
Self Check-Out 16 18 20 19 to-eat prepared meals and away-from-home meals,
Lanes
In-Store Samples 14 13 15 11 • rated overall satisfaction with services provided by the store c o v e r
Coffee Shop 13 11 9 12 shopped most often for groceries.
On-Premise 13 10 9 14
Gas Pumps
Video Rental 12 12 6 15
Additionally, panelists were asked to select the three most impor-
Drive Thru Pharmacy 11 11 5 15 tant attributes influencing the “where to shop for groceries” deci-
Longer Store Hours 11 11 12 8 sion from a list of seventeen pre-determined options ranging
In-Store 11 11 11 10
from fresh meet, to good service, low price and convenient loca-
Cooking Lessons
Pick-Up/Deliver 10 10 6 13 tion. For the store shopped most often for groceries, panel mem-
to Car Service bers provided satisfaction levels with that store’s delivery against
Dry Cleaning 10 9 6 11
the same seventeen attributes.
s t o r y

Bulk Candy & 9 8 7 12


Nut Section
Continued on page 35.
Red indicates: Differentiation and Shopper Satisfaction Opportunities
Source: ACNielsen Homescan
Ethnic Marketing
by the Numbers
Integrating Diverse Data Can
Reveal New Opportunities
Chris Hammer
Senior Product Manager
U.S. Marketing

John Skolnicki
Associate Client Director
Client Service
10
Spring 2005|
Consumer Insight |

T
he ethnic makeup of the U.S. has begun changing For manufacturers of consumer packaged goods (CPG),
markedly. The total population grows by about these demographic trends add up to a timely marketing
2.5 million people each year, led recently by a opportunity. Companies must increasingly appeal to
consistent, steady rise in the number of ethnic minorities. minority groups and reflect their cultural preferences to
Today, Hispanics and African-Americans comprise more succeed. And the time to build such brand loyalty is now,
than a quarter of the total U.S. population, and their as this growing force of young consumers begins maturing
numbers continue to grow. If current trends continue, by and expanding its buying power.
2050, close to half of the population in the U.S. will be
But how? The discipline of ethnic marketing, while estab-
non-white, and nearly a quarter of it will be Hispanic.
lished in the U.S., is still relatively new. As such, pursuing it
f e a t u r e

With this demographic shift comes greater economic clout presents a number of challenges for CPG manufacturers.
for minorities. In the U.S., the combined buying power of For example:
Hispanics, African-Americans and Asians now exceeds one
• Data sources on ethnic buying habits tend to be frag-
trillion dollars—an all-time high—and is expected to keep
mented and segregated, making it harder to compose a
climbing. Furthermore, many of these minority consumers
well-rounded picture of the minority consumer and a
are young. About one-third of all Hispanics and African-
strategic plan to reach him/her.
Americans in the U.S. are currently age 18 or under.
• The information infrastructure for tracking ethnic buy- • Picking the right category segments, or drilling down
ing habits is not as robust as the tools are for studying to the appropriate category/brand level to identify
general market patterns. To manufacturers, that means opportunities among items that are important to
not always being able to track the success of a market- Hispanic consumers.
ing plan focused on minorities and not knowing if • Picking the right marketing mix, or putting together the
they’re implementing the right type of ethnic marketing. right product with the right promotion to create a win-
• We lack an abundance of business divisions dedicated ning ethnic brand.
to multicultural business, which can make it too difficult • Picking the right execution strategy for the right place, or
to gain support and funding for addressing ethnic knowing how to reach the consumer you seek in the
marketing needs. store where he or she shops.
Integrated Data: A Source of New Insight Doing Laundry in L.A.
A case in point comes from a VNU client case study. Nearly half (48%) of the Hispanic population in the U.S.
Seeking to expand incremental sales of laundry care prod- today resides in just six cities—Los Angeles, New York,
ucts to Hispanic consumers, the client wanted help in Miami, Houston, Chicago and San Antonio. In each of
understanding where and how best to do it. For advice, it these metropolitan areas, Hispanics comprise a significant
turned to VNU, parent company of ACNielsen. As an percentage of the total population base.
industry leader in market research, VNU supports about
9,000 clients in the CPG sector as they address complex In analyzing Hispanic consumption of laundry care prod- 11

| Consumer Insight | Spring 2005


sales and marketing issues. ucts for our client, VNU decided to focus its study on Los
Angeles. The city is home to a large and very diverse
The traditional approach to ethnic marketing has been to Hispanic population that represents more than 45% of the
take fragmented approaches to target the ethnic consumer, total market.
evaluate ethnic consumer opportunity, execute an ethnic
marketing program and track the return on investment of To find opportunities, we started by identifying retailers
implementing the program. To date, it has been difficult to with the greatest share of the Hispanic market for laundry
find data integrated throughout this data process, and thus, care products on the premise that category success for key
it has been a challenge to gain a fully nuanced picture of retailers would be vital to overall category success in the
ethnic consumer behavior. market. In Los Angeles, one retailer holds 40% of the
Hispanic laundry care product market. VNU focused its
VNU’s insight into ethnic marketing has been to adopt a attention on understanding this retailer’s results.
“One VNU Approach” that integrates data from multiple
sources across our organization, including ACNielsen Target The next step was to identify the laundry care products
Track, ACNielsen Scantrack, ACNielsen Store Level Data preferred by Hispanic consumers. VNU wanted to know:
and Spectra HispanIQ. The result, for this client as well as Which brands are underdeveloped and which offer the
others, has been a deeper understanding of the ethnic mar- best opportunity?
ketplace and greater success in appealing to it.
Gathering information on consumption by minority group
Successful ethnic marketing focuses on getting four things is a growing strength of ACNielsen. Using its Scantrack
right—namely: Retail Measurement Service, the company drills down into
sales data by store and ethnic group, leveraging all
• Picking the right geography, or studying an area where Scantrack stores in the market. The resulting “snapshot”
f e a t u r e

the relationship of the market to the retailer creates lets ACNielsen compare Hispanic buying patterns against
opportunity. total market performance.
The data showed that Hispanic consumers prefer heavily Measuring the Marketing Mix
scented laundry care products in powder form. To answer that, VNU needed data in one more area:
Superimposed on its data for retailers, VNU saw these Hispanic marketing execution. Knowing which UPCs
preferences held true by store as well as by total market. offered the greatest opportunity for Hispanic sales,
which stores to target, the demographics and psychographics
The second area of analysis was consumer targeting. To
of the customers frequenting those stores and the best pro-
understand the Hispanic consumer in L.A., VNU used data
motional vehicles for reaching those customers could help
to map out a continuum of buying behavior across the
the client decide where to focus their efforts.
total market that it calls “acculturation segmentation.” At
one end of the continuum are Hispanic shoppers who Further analysis of the databases revealed that Brand A was
behave most like the market overall. This group is consid- overdeveloped in heavily scented UPCs. It had more than its
ered “acculturated.” At the other end are those whose fair share on Retailer A’s store shelves, but was capturing
preferences show a strong cultural influence. They are the fewer sales than could be expected from the segment. It
least acculturated. In the middle is the bicultural Hispanic made sense to focus on just the SKUs with a successful track
segment. Accounting for 53% of all Hispanic adults in the record to close the gap. For the retailer, that share gap repre-
U.S., this group demonstrates a blend of buying patterns. sented $2.2 million in incremental sales that were possible
The segmentation acts as an integration platform for link- [See chart 2].
ing databases on product consumption from Simmons,
12 Scarborough, TDLinx and Spectra Store Trade Area.
Chart 2: Brand A Share Gap Represents $2.2MM
Spring 2005|

Opportunity for Retailer A


When VNU looked across the data, it saw that Brand A,
the market leader in laundry care products among • Hispanic Total Category sales=$28.2MM
–Each share point reflects $282K opportunity
Hispanics, had been losing dollar share for the past year • Existing share gap=8.1 share points
and was an underdeveloped brand. Furthermore, its sales
31.8%
slide for Retailer A mirrored a trend for the total market
Consumer Insight |

[See chart 1]. A gap was emerging when VNU looked at


the market through all these lenses; namely, that Brand A 23.7%

was missing an opportunity to capture Hispanic dollars in


this product segment of heavily scented laundry care prod-
ucts. But how could the gap be closed?

Chart 1: Heavy Scent Powder Is Preferred


Form Among Hispanics
Percent of Dollars, Heavy Scent and Heavy Scent by Form

46% Retailer A Retailer A


44% Hispanic
42%
36% Category Dollar Share
Source: ACNielsen Target Track, 2004
29%
25%
The last step in successful ethnic marketing is execution—
knowing which stores to target, which customers to
f e a t u r e

approach and how best to reach them. VNU’s analysis iden-


tified the top 50 stores of Retailer A with declining brand
sales. It targeted an additional 50 stores with heavy Hispanic
Laundry– Liquid– Powder–
Heavy Scent Heavy Scent Heavy Scent

Total Market Retailer A


Source: ACNielsen Target Track, 2004
Business Tools for
penetration [See chart 3]. Focusing on these two areas will Retail Tracking
help realize nearly $2 million of the $2.2 million in poten-
tial sales. Further analysis revealed that Feature and Trendable ACV Market Share and
Display delivers the best promotional lift among Hispanic Store Count Information
consumers, and Brand A’s promotions are less effective Retail ACView™ is a revolutionary trendable ACV market share
than the category average. and store count reporting tool, providing retailers with an easy
and reliable means to measure competitive market share for
yourself and your competitors over time. Retail ACView offers
Chart 3: Focus on Underperforming
Brand Stores Uncovers $694K Opportunity the industry—for the first time ever—trendable, account-level
market shares modeled to reflect total store sales
Implementing right assortment/promotion can result in an 8 share point gain across the full food, drug, and mass channels, as
well as account-level store counts incorporated
Current Brand New Brand Brand $ Percent of
Share Share Increase (K) Category Dollars from TDLinx. TDLinx is the industry’s premier
Store 1 18% 26% 17.6 0.3% source of comprehensive coverage of retail
Store 2 11% 19% 2.3 0.0%
Store 3 20% 28% 10.4 0.2% location information.
Store 4 26% 34% 15.1% 0.3%
------ --- --- --- --- The Retail ACView suite of reports is accessible via the secure
Store 50 20% 28% 9.3 0.2% ACNielsen Answers® web portal and delivers:
Total 694 13%
• Executive Summary Scorecards that provide performance
Source: ACNielsen
results and insights at the total market and individual custom
trade area levels. These quarterly scorecards are full of
13

| Consumer Insight | Spring 2005


Data from Spectra HispanIQ gave VNU a demographic insightful charts and graphs that highlight key competitors’
breakdown of the Hispanic residents in the area defined by performance,
that store cluster—whether they spoke more Spanish or emphasizing ACV
English, where they fell on the acculturation continuum, market shares and
store counts, coun-
their education level, the size and age of their families and
ty-level trends, and
their media preferences [See chart 4]. From that analysis,
competitive threats.
our client could begin to craft the messages and promo- With this level of
tions to reach those audiences. Once the marketing plan is information, you
implemented, the client can use Target Track to evaluate are able to quickly
return on investment of the funds dedicated to this effort. isolate organic from new store growth, quantify competitive
threats, and identify the relative importance of certain geo-
graphic regions to your business.
Chart 4: What Does Retailer A’s • Detailed reports that offer granular views of ACV market
Hispanic Consumer Look Like?
share, store count and cross trade area trends. These reports
Less Bi- More
Acculturated Cultural Acculturated
help you quantify seasonal and channel trends with previous-
Psychographics Shop at stores Convenient Shop at quarter and year-ago comparisons, identify market entrants
(Opinions that stock my location specialty
and high-growth competitors, and isolate promising or vul-
and Media) favorite brands important shops
Listen to radio Use Internet Use Internet nerable trade areas.
for news for shopping for shopping
updates information information
The reports are designed to reflect the way you evaluate your busi-
Read newspapers Often notes ads Magazines are a ness, and allow you the flexibility to obtain market insights by:
on a regular basis at bus stops source of information
Enjoy watching Enjoy watching Pay attention to ads • Channel Type: Choose any combination of food, drug and
kid TV shows kid TV shows in movie theaters
mass; club and dollar are also available for store counts.
• Least Acculturated Hispanic consumers shop at stores
• Market Type: View the market using industry-standard defin-
f e a t u r e

that they know carry their favorite brand.


• Radio and newspapers, not the Internet, are the best itions (DMAs, MSAs, or ACNielsen SMMs) or your own
way to reach Least Acculturated Hispanics.
custom trade areas.
• Both Least Acculturated and Bi-Cultural Hispanics enjoy
kids TV shows. • Time Period: Analyze eight quarters of trendable history and
Source: Spectra HispanIQ
gain visibility into long- and short-term drivers of share change.
If you are a retailer and wish to learn more about Retail
Continued on page 35. ACView, please contact your ACNielsen Retail Services repre-
sentative or visit our web site at http://acnielsen.com.

http://acnielsen.com/ci or call 1.800.988.4ACN


Jack-in-the-Tiffin-Box *
Unconventional paths to new
product idea development
Sangeeta Gupta
Subhransu Rout
Seemeen Khan
ACNielsen ORG-MARG

14
Spring 2005|
Consumer Insight |

T
o grow, many companies today focus on new approach to gather credible, useful data. Although our
product development. It’s not an easy route; even study focused on schoolchildren in Delhi, India, we believe
under the best of circumstances, product innova- the methods used and insights obtained cross cultural and
tion is a challenging activity that calls for creativity coupled geographic borders.
with a sound understanding of the consumer’s socio-
Background and Objective
cultural needs.
Mothers in India—like mothers everywhere—try each day
The challenge grows when the targeted consumer is a to feed their children the nutritious foods their growing
child. While often amazingly perceptive and articulate, chil- bodies need.
dren can be limited in their ability to provide the kind of
One way Indian mothers do this is by packing traditional
socio-cultural data that market researchers seek. They are,
Indian fare that they consider healthy and nourishing into
for instance, disinclined to articulate their “need gaps” in
the “tiffin boxes,” or lunch tins, that children carry to
focus groups.
f e a t u r e

school. During recess and on bus rides home, schoolchild-


How, then, can companies gather information to guide ren snack from these tiffin boxes—or at least their mothers
product development efforts, especially as they relate to hope they do. The fact is that children and mothers in
children? In a recent effort, ACNielsen ORG-MARG India—like kids and moms everywhere—don’t always
researchers addressed this issue using an innovative agree on food. And so the tiffin boxes often come home
containing uneaten meals.
*Tiffin box: In India, “tiffin” refers to a light meal eaten during the day.
The boxes in which these meals are packed are called “tiffin boxes.”
Food manufacturers in the Asian Pacific region have identi-
fied tiffin box fare as an opportunity for new product
development. The objective of our study was to create a
brief that would support idea creation by our client’s R&D
and marketing teams. In this effort, our focus was not
defining final product ideas so much as understanding the
market and setting context for product development.

The Approach
Our challenge in studying this opportunity was multi-
faceted. We had multiple audiences to understand; that is,
children and their adults. We had multiple agendas to
define—a child’s interest in food that’s fun and tasty as
well as a mother’s desire for that food to be wholesome
and nourishing. Finally, to study children effectively, we
deemed it valuable to observe them “in the moment,”
in their own time and place.

Using regular research methodologies to explore this


opportunity, therefore, would likely have been limiting. So
15

| Consumer Insight | Spring 2005


ACNielsen ORG-MARG suggested a different approach, Our process emphasized certain concepts and practices:
called ethnography. Ethnography emphasizes studying
issues “live” by making the researcher an upfront observer • Seeking out reorienting and disconfirming observations.
at points of consumption. Since our study was highly To keep our observations fresh, we kept challenging our
focused and comprised episodic observations at multiple assumptions about the study subject. One assumption
sites, we called our study a microethnography. was that the tiffin box is important to the child and
something that he or she looks forward to using. This
Our microethnographic approach had several steps. First, hypothesis was soon disconfirmed.
we wanted to understand the child. So we began the pro-
• Revisits of the sites under study. We visited the identified
ject by reading extensively from the works of noted child
schools repeatedly to observe recess behavior on different
psychologists about children ages 8–12 (our target market).
days among the same set of students. We also visited the
Next, we observed mothers preparing tiffin boxes by going
same set of students at different times of the day
to their homes early in the morning. Without telling them
to see their various interactions with their tiffin boxes
that we were there to study tiffin preparation, we watched
and food.
these mothers in their early morning chores. Then, when
the children went to school, so did we, sitting and chatting • Participative role relationships so that inquiry is
with them during recess and on bus rides to learn about unfettered. Our researchers were participative observers,
their interactions with tiffin boxes. As an additional step, able to ask questions in a non-intrusive manner. For
we spoke with school teachers to gather their insights example, when meeting with mothers, our researchers
about the ways children use their tiffin boxes. Finally, we helped with the chores as a way to raise topics of interest
concluded the study by conducting synectic groups of in an informal and natural way.
mothers and children that were charged with generating
f e a t u r e

• Wide range of perspectives and groupings. We sought


ideas about tiffin boxes and tiffin box food, based on our
multiple viewpoints on the topic, including mothers, chil-
observations. All fieldwork was conducted in Delhi during
dren, teachers, childhood experts and even fathers who
January and February 2004.
were around the house in the morning.
16
Spring 2005|

• Collaborative “insider-outsider” effort. We sought and One world in which the child operates—and the context for
Consumer Insight |

enjoyed a high degree of collaboration from both this study in consumer behavior—is school. Indian schools
children and teachers. are relatively demanding. An eight-year-old’s day usually
starts before 6 a.m., when he arises to catch the bus. Most
• Collecting data in multiple modes. We gathered
children attend classes for several hours in the morning
information in many ways, including artifacts,
before enjoying a short recess of 25–30 minutes. A couple
photographs, spontaneous groups, etc.
more hours of classes follow. Then children ride the bus
• Systematic data transformation. To ensure the data home to eat lunch. It is during the brief recess and on the
were examined from many perspectives, we used bus ride home that children engage with the contents of
indexing, coding, decontextualizing, memoing, their tiffin boxes. These moments of recess are times of
recontextualizing and more. great release for the 8–12-year-old child—time that he
Many of our research disciplines were based on research would rather spend in energetic play. In this context, the
by Gouldner, Barker and Kondo. tiffin is something to be done with as soon as possible.

The Insights The other key player in this study is the mother. She has
Children between ages eight and 12 are busy establishing her own motivations and context as she packs the tiffin
a sense of self-worth while learning about their world. box, the result of her upbringing and culture. Many moth-
They shift constantly between feeling competent and ers have firm beliefs about and practices in tiffin packing—
f e a t u r e

feeling inferior, often based on responses from teachers among these, the belief that tiffin fare should mimic the
and peers. Deeply curious, children this age love fantasy, typical Indian meal, with its dal, roti, parantha, yogurt and
surprises, mysteries and freedom from restrictions. sabji. So she packs such foods, even as she knows that her
They possess a keen sense of humor. child probably wants something different and that the
items she’s packing may come home untouched.

Continued on page 33.


Business Tools for
Retail Tracking
Hit your target with CBP The New Item Report will help you capitalize on sales and profit
opportunities when products are at their “hottest.” Maximize
Powerful and flexible reporting- new product opportunities:
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• Track new product introductions in the entire marketplace.
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the answers and allow you to drill into the data. With CBP®— market.
Category Business Planner, you can now zero in on critical infor-
• Determine strategic directions on pricing and distribution.
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nel, time period and market—and hit your targets every time. • Identify the highest opportunity new items based on
marketplace performance.
CBP makes it easy and allows you to take aim by providing
powerful and flexible reporting from the retailer’s point of view. The Wal-Mart Module will help you drive strategic business
With CBP, you can understand what is happening—and why it is analyses with vendor partners through collaborative data use.
happening within a category and geography—delivered to you Assess your performance against Wal-Mart:
over the web. And now with a new module and new functionali- • Identify the categories/brands that are growing quickly within
ty, you can set your sights on Private Label and enhanced Wal-Mart.
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• Determine the portion of consumer category needs being
The Private Label Module will help you better understand the satisfied by Wal-Mart store brands.
category dynamics and compare performance against the market- 17
• Uncover opportunities to ensure you are getting your share of

| Consumer Insight | Spring 2005


place, determine strategic direction of Private Label items and total market, including Wal-Mart.
evaluate Private Label items against branded items. Broaden your
Private Label offerings: Promotion Item Detail will help you efficiently plan and manage
promotions to drive sales in your stores. Increase sales and
• Enhance assortment by capturing key measures for Private profitability:
Label groups and branded groups.
• Diagnose what in-store promotion vehicles are driving your
• Reach the same Private Label penetration as the rest of the
incremental sales.
market by pinpointing the additional Private Label sales
needed. • Plan better promotions through the evaluation of various
in-store trade promotion tactics.
• Optimize your Private Label sales by isolating opportunities
within Private Label groups. • Determine if the in-channel remaining market or all outlets
are stealing volume via more aggressive promotions.
• Expand your Private Label offering by identifying categories
that lend themselves to Private Label. • Ensure you get your fair share of promotion funds with your
manufacturer vendor partners.
e.Analysis makes CBP even more interactive, enabling you to

b u s i n e s s
view, analyze and graph information precisely to your standards. CBP accesses ACNielsen’s patented RDH™, retailer-endorsed defi-
nition of the category hierarchy, to give you rich, relevant and
• View the relationships among multiple fields with robust information. Add to that integrated charting and graph-
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• Interact with key performance measures to analyze, slice delivered in a focused analytical framework, and you have all
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• Save precious time with more productive analyses by creat- See why CBP hits the target for more efficient category
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• Add value to your analyses through creating new metrics 800-988-4ACN and find out how CBP will help you hit
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t o o l s

http://acnielsen.com/ci or call 1.800.988.4ACN


Winning the Case
for Better
Distribution

18
Spring 2005|

Optimizing distribution for


mid- to small-sized manufacturers
Consumer Insight |

Steve Kapinus, Director


Spectra Business Development

E
veryone knows that you could have the best packag- But up against tight budgets and mounting competition,
ing, best quality of food and best advertising cam- what can small- to mid-sized manufacturers do to optimize
paign, but without distribution you are nowhere. No their distribution at their key retailer? The answer lies in
one knows this better than Ben & Jerry’s, one of the best consumer information.
known consumer brands in the U.S. First opening in a
Knowing Your Retailer’s Shopper
vacant gas station in 1978, Ben & Jerry’s soon began
Understanding whom you are working for is important.
expanding distribution throughout the U.S. and now sells
For example, when you interview a candidate for a job at
hundreds of millions of dollars worth of ice cream that
your company, don’t you expect them to have thoroughly
sport names like Chunky Monkey and Cherry Garcia.
researched what your company does, what you stand for
With competition fierce among manufacturers looking to and who you are? It is no different when trying to enter
f e a t u r e

secure their place on the shelves of Wal-Mart, Albertson’s into a relationship with your key retailer. Thousands of
and the like, small manufacturers are looking for con- manufacturers are vying for distribution at the top retail-
sumer insights that can help them prove to their key retail- ers. A keen understanding of your retailer’s shopper is
ers why they, and not their competitors, should grace their what will help you win the battle.
shelves. And if they can gain distribution in key retailers,
While many retailers have a definite profile for many of
the payoff can be huge, with sales often doubling or
their stores, each store is a unique composition of house-
tripling in one year.
holds who vary in terms of affluence, household size,
Business Tools for
household composition, etc. Understanding the unique
Retail Tracking
nuances of each store’s shoppers is important. Therefore,
while panel data can provide an excellent overview of the Spectra’s OnDemand Small Business Solutions
national or even regional shopper, drilling down to retail-
Gain, Expand and Protect Your Distribution at
er-specific consumer insights on products selling within
retail stores can only be done by integrating retailer
Key Retail Stores
POS information with Spectra’s proprietary consumer With thousands of manufacturers vying for distribution at
insights techniques. key retailers, competition is fierce for coveted shelf space.
Successfully demonstrating the benefit of your product to the
Matching your consumer information to your retail buyer is the key to gaining, expanding and protecting your
buyer’s objectives distribution in key retail stores.

When you walk through the halls of your retailer’s head- Spectra’s Distribution Builder solutions are a set of retailer-
quarters to meet with your buyer, bringing consumer accepted consumer insights and analyses designed to prove the
insights that match the buyer’s objective of optimizing the value of your products to your retailer’s business. Specifically,
Spectra integrates retailer POS information, such as Wal-Mart's
shelf and maximizing revenue opportunities is crucial.
Retail Link POS information, with our proprietary consumer
Successfully demonstrating the benefit of your product to insight techniques, to bring the retailer’s unique shopper
the buyer is the key to gaining, expanding and protecting profiles to life. This reveals store-specific shopper insights
your distribution in key retail stores. and opportunities.

Distribution Builder allows you to: 19


It is not about obtaining or expanding distribution in

| Consumer Insight | Spring 2005


every one of your key retailer’s stores, it is about obtain- • Optimize your brand’s distribution potential by showing
ing or expanding distribution in the right stores. This that your consumers are the ones shopping at your
strategy meets the buyer’s objectives of meeting cus- retailer’s stores.

tomer’s needs by having the right products in the right • Maximize your product’s sales in an account by focusing
distribution and merchandising on the “right” stores.
stores and it meets your objective of maximizing your
product’s sales in the retailer by focusing distribution and • Improve the effectiveness of your sales call by leveraging
consumer-centric insights against your retailer’s objectives.
merchandising on the “right” stores.
• Deliver extraordinary ROI by promoting distribution in
the right retail stores.

Spectra Distribution Builder’s retail and consumer insights


provide you with the information you need to accomplish your
goals in the following business issues:

• Distribution Builder: Gain new distribution for your brand


at your key retailer.
• Distribution Demonstrator: Build your case for expanded
distribution at your key retailer.
• Distribution Protector: Protect your existing distribution
at your key retailer.
• New Product Launcher: Make smart distribution decisions
by choosing to place your products into stores with the
greatest sales potential.
• Merchandising Optimizer: Improve your retailer’s sales by opti-
f e a t u r e

mizing your merchandising and product placement strategies.

For information on Spectra’s OnDemand Small Business


Solutions and to receive a free sample report for our product,
Distribution Builder, visit www.spectramarketing.com/ondemand
or call Steve Kapinus at 866-524-2568 or email him at
steve_kapinus@spectramarketing.com.

http://acnielsen.com/ci or call 1.800.988.4ACN


Chart 1: High Opportunity Lifestyles To help you do this, Spectra provides you with a con-
Based on Consumer Demand sumer profile of your brand and a store-by-store ranking
Jeff's Save-a-Ton with of stores that fit your brand’s consumers and your retail-
Coffee 120+ Demand
Lifestyle Consumer Profile Index for Jeff’s Coffee er’s shoppers. Armed with this information you can:
Index % ACV
Upscale Suburbs 137 29.17 • Gain new distribution in key retail stores
Traditional Families 94 18.24
Mid/Upscale Suburbs 115 11.84
• Build the case for expanding distribution into your
Metro Elite 147 15.25 retailer’s stores
Working Class Towns 71 3.57
• Protect your existing distribution by proving your value
Rural Towns & Farms 81 4.18
Mid Urban Melting Pot 123 9.77 to your retailer, on a store, cluster or account level.
Downscale Rural 48 0.41
• Make smart distribution decisions by choosing to place
Downscale Urban 91 7.58
Total 100 100.00 your products into stores with the greatest sales potential.

Brown indicates: High Consumer, 115+ • Improve your retailer’s sales by optimizing your mer-
Blue indicates: 3 Largest ACV Segments
Source: Spectra and ACNielsen Homescan chandising and product placement strategies.

How One Manufacturer Expanded


Distribution in Save-a-Ton Grocery Stores—
20 Chart 2: Actual Sales by A Case Study
Spring 2005|

Store Demand Groups


When the brand manager for Jeff’s Coffee set out to meet
Number of per million
Demand Index Stores ACV with Save-a-Ton’s buyer, he had one of two objectives in
120 or higher 162 12.16 mind: 1) Expand distribution to new stores currently not
Between 81 and 119 305 9.17 stocking Jeff’s Coffee but having a strong consumer fit and
80 or lower 123 6.21
high sales potential, or 2) If Save-a-Ton does not want to
Total 590 9.38
Consumer Insight |

expand distribution past current number of stores, adjust


Source: Spectra, 13 weeks ending 1/5/05
the stores to place distribution in high potential stores.

Chart 3: Optimizing Distribution Step One: Collecting Evidence to


Among Current Store Counts Support Their Case
Current Store Plan To accomplish this, Spectra analyzed the sale information
Save-a-Ton Stores with Jeff’s Coffee for Jeff’s Coffee using Save-a-Ton’s point-of-sale informa-
Number of
Demand Index Stores ACV Sales tion to generate a consumer profile for the product. The
120 or higher 162 $7,117,500,000 $82,840 consumer profile was then compared to Save-a-Ton’s
Between 81 and 119 305 $13,841,100,000 $118,801
shopper profiles to create a demand index, which mea-
80 or lower 123 $4,096,300,000 $24,917
Total 590 $25,054,900,000 $226,558
sures the consumer fit (demographic similarity) between
the likely shoppers at the store and the consumers
Improved Consumer Fit Store Plan
of the product. Stores with a strong consumer fit with
Save-a-Ton Stores with Jeff’s Coffee
Number of Jeff’s Coffee (120+ Demand Index) received the majority
Demand Index Stores ACV Sales
of their store sales from consumers within Mid to Upscale
120 or higher (current 162 $7,117,500,000 $82,840
120 or higher (new) 123 $5,343,000,000 $64,971*
Lifestyles [See chart 1].
Between 81 and 119 305 $13,841,100,000 $118,801
f e a t u r e

Total 590 $26,301,600,000 $266,612


To help highlight the differences in sales between those
Expected Percent Increase in Sales 17.70% stores with a good consumer fit for Jeff’s Coffee and
Source: Spectra and Retailer POS, 13 weeks ending 1/5/05
those without a good consumer fit, Spectra compared
*The sales figure for the 123 new stores is estimated by multiplying the
the store sales for each type. The analysis highlighted
average sales per million ACV (for stores indexing 120+) by the ACV for
the new stores: $12.16 × $5,343,000,000 / 1,000,000 = $64,971.
that Save-a-Ton stores with a strong consumer fit for
Jeff’s Coffee sell 96% more Jeff’s Coffee than stores with
a low consumer fit. In fact, stores selling Jeff’s Coffee
Business Tools for
Consumer Behavior
Quantify Retailer Equity to Drive Sales Retailers should use this information to:

Available in the U.S. • Determine the strength and weakness of stores.


• Compare your performance to competitive retailers.
Homescan Shopper Trends is the industry’s first service that
allows retailers and manufacturers to quantify the impact of • Quantify risk and opportunities among core/occasional
shopper attitudes on retailer equity and actual sales. Shopper and “never” shoppers as well as competitor shoppers.
Trends links consumers’ attitudes on various store attributes • Develop competitive targets.
that drive equity with actual purchasing behavior to provide • Quantify the impact of a change in attitudes on equity
the competitive edge necessary to develop plans that address and sales performance.
weaknesses, exploit strengths and maximize opportunities.
• Track the impact of marketing programs on attitudes and
Developed jointly with ACNielsen International Research, this emotional loyalty.
online survey-based service applies the globally recognized • Assist in real estate decisions.
brand equity model Winning Brands to retailer equity, and
• Track the long-term impact on equity on sales and
links this information to the Homescan consumer panel.
market share.
• Determine market-level performance.
Pinpointing What Makes Retailer Distinct Can Explain
Over- and Under-Leveraged Equity Manufacturers should use this information:
Importance (Derived) Distinctiveness Score
Retailer A Retailer B Retailer C Retailer D • As sales partners to provide retailer partners with insights 21
into their performance compared to competition as well as

| Consumer Insight | Spring 2005


0.36 High Importance
A place where it’s easy to Low Importance
quickly find what I need pinpoint strengths and weaknesses.
Efficiency/Loyalty program

0.28 • As a category management/sales tool to indicate how a cate-


Staff provides
good service
0.27 gory and its brands can play a role to drive equity and
0.26
improve attitudes.
Efficient checkout
counters • As a sales planning tool to prioritize retailers in market
based on equity in addition to sales volume.
0.19
Ease of parking
To learn more about the Homescan Shopper Trends, please
0.18 contact your ACNielsen Client Service or Retail Services
Very good frequent
shopper program
-25 -15 -5 5 15 25 representative or visit our web site at http://acnielsen.com.

Distinctiveness analysis uses a statistical technique to isolate


each retailers’ distinguishing characteristics, while taking away
the impact of market share. http://www.acnielsen.ca or call 1.800.988.4ACN
Shopper Trends drills down to identify what drives a retailer’s
equity perception so you can craft strategies to strengthen it.

which have a 120 or higher demand index sell $12 of By swapping out the 123 Save-a-Ton stores with a low con-
product per million dollars ACV (e.g., store sales) com- sumer fit for 123 stores with a strong consumer fit, total
pared to only $6 per million ACV for stores indexing Jeff’s Coffee sales in Save-a-Ton would be expected to
80 or below [See chart 2]. increase by 18% [See chart 3]. The new stores are projected
to do three times the sales of the stores they are replacing.
Step Two: Unveiling Their
f e a t u r e

Sales growth is achieved from both higher sales per mil-


Supporting Arguments lion dollars ACV and from larger stores (the stores with a
If Save-a-Ton chooses to hold distribution constant at 590
good fit for Jeff’s Coffee are slightly larger, providing
stores, it is still possible to increase Jeff’s sales by 18% by
more consumers access to the brand).
adjusting the mix of stores with distribution.
Continued on page 34.
Canada’s Aging Boomers:
A Golden Opportunity

22
Spring 2005|
Consumer Insight |

T
he baby boomers aren’t babies anymore. The This report focuses on identifying emerging trends as
brash, postwar generation that once lived by the they relate to two age segments: preboomers and older
anthem “I hope I die before I get old” is getting boomers.
old indeed—at least by its standards.
Preboomers are not technically boomers at all; they were
But it’s still the most influential consumer group in born just before the baby boom. Preboomers represent
Canada today, representing about one-third of the coun- the 55- to 64-year-old age group. There are about three
try’s 31.6 million people. And as the nation’s largest million of them in Canada today.
group of consumers, baby boomers will continue to set
Older boomers are the first members of the boomer
purchasing trends for at least the next 20 years.
generation, born between 1949 and 1959. There are
f e a t u r e

For marketers in the consumer packaged goods industry, about 4.6 million Canadians in this group today.
this represents a golden opportunity. Determining the
Preboomers are included here because their purchasing
evolving needs of this generation, especially the older
behavior is a strong indicator of what following genera-
segment, will help shape a go-to-market strategy that
tions will buy as they age. Over the next five to 10 years,
accurately anticipates what senior boomers want.
older boomers will reach this age, followed by the gener-
ation’s younger segment (born between 1959 and 1966).
By examining the purchasing behavior of Canadian The emphasis on nutrition will lead to consumer demand
households through ACNielsen’s Homescan Panel, we for minimally processed foods and for servings that are
can see product purchases that are overdeveloped and nutritionally complete. Aging, and the physiological
underdeveloped within the preboomer segment, com- experiences of metabolic illnesses such as diabetes and
pared with older boomers. This provides a signal as to heart disease, provide an opportunity for companies to
which categories can benefit from a boost in new or develop foods geared to the population at risk.
enhanced products [See chart 1].
The health benefits of seafood derived from the antioxi-
Chart 1: Boomer Profiles dant properties of fish oil, particularly omega-3 fatty
Pre Boomer Older Boomer acids, are now widely known. Value brands and new fla-
vors (lemon, curry) added to fish and seafood are also
3.2 Million Pre Boomers in 2003 4.6 Millions Older Boomers in 2003
10% of Total Population 15% of Total Population propelling the trend. As a result, according to ACNielsen
49% are Male 50% are Male Canada’s MarketTrack, total canned and bottled mack-
51% are Female 50% are Female erel sales are up 9%, and total herring sales are up 4%.
57% High School or Less 48% High School or Less
Both types of fish are excellent for the prevention of
25% Some Post Secondary 30% Some Post Secondary
18% University 22% University heart attacks and defense against memory loss.
64% Internet Penetration 76% Internet Penetration
Peanuts and other nuts have also been associated with a
Source: Statistics Canada, ACNielsen Internet Planner 2004 lower risk of heart disease. Soy nuts are increasingly
23
making their way into the mainstream. Nuts and seeds

| Consumer Insight | Spring 2005


According to a study of ACNielsen Homescan house-
contain vitamin E, magnesium and cholesterol-lowering
holds, 70% of female older boomers were likely to try a
unsaturated fats, and they’re loaded with nutrients and
new brand even if it was contrary to their customary
antioxidants. Some consumers have added nuts to their
buying habits, making them more likely to switch brands
diets as snacks or in salads. The total shelled nuts cate-
than their 18–34-year-old counterparts. A study by
gory is a $176 million business in Canada and increased
Research 100, a Princeton, N.J.-based firm, concluded
by 20% this past year.
that people over 55 are “neither frugal nor set in their
ways” and that they spend more time considering new Yogurt provides an easy way to add calcium to the diet.
products and brands than any other demographic group. Today many yogurts feature additional benefits such as
active cultures and lower-fat options that assist in weight
A Healthy Attitude
management. There is a decided preference among pre-
Preboomers and older boomers share a preoccupation
boomers for frozen yogurt over ice cream; not so with
with health, well-being and a strong desire to hang on to
their youthfulness. Their product purchases, as illustrated
in this report, provide the proof.

Preboomers want to enjoy life, and they’re on a quest for


longevity. Foods high in vitamins and nutrients can help
stave off illness. In many cases, traditional distinctions
between medicine and food have become increasingly
blurred. As a result, food companies may need to begin
thinking more like drug or homeopathic companies.
f e a t u r e

Recent changes in Canadian regulations are opening the


door wider for the health properties of certain foods to
be promoted directly to consumers.
older boomers. There exists an opportunity here to Semi-moist fruits such as currants, dates, apricots and
increase sales of frozen yogurt; it could be as simple as prunes are overdeveloped with preboomers because they
refocusing advertising dollars. There may be additional are primarily natural, without artificial sweeteners or
potential to play up the benefits of calcium in the dairy preservatives. They are easy to buy, shelf-stable and are
aisle [See chart 2]. usually plentiful and widely available in retail stores.
What opportunities exist to boost sales of these products
Chart 2: Maintaining a Healthy Attitude to the older boomer generation?
Development Index Pre Boomers Older Boomers
Canned and Bottled Fish Aging Beautifully on the Inside
Anchovies/Sardines 164 91 Drug companies and naturopathic remedy manufacturers
Herring 139 80 have already benefited from preboomers’ interest in stay-
Mackerel 160 129
Salmon 153 113 ing youthful and healthy. They are marketing many new
Seafood Spreads and Pastes 154 104 over-the-counter supplements, and preboomers are buy-
Nuts
ing them in increasing numbers. Antioxidant vitamin
Shelled Nuts 116 121
Peanuts in Shell 134 115
sales increased 25% this past year, glucosamine was up
Calcium Rich Foods
15% and vitamin B complex was up 10%. Once again,
Frozen Yogurt 161 92 marketers may want to assess why these products are
Refrigerated Yogurt 83 97 not overdeveloped among older boomers, who share the
24 Ice Cream 95 111
Milk 87 99 same health concerns as preboomers.
Spring 2005|

Semi-Moist Fruit
Nutritional supplement sales were up 12% in 2004. Age-
Currants 181 101
Dates 157 109 related ailments such as deterioration of vision, weight
Apricots 146 100 gain, diabetes, and joint and foot problems will result in
Prunes 127 100
preboomers consuming larger quantities of multivitamins
Source: ACNielsen Homescan 2003
and antioxidant supplements.
Consumer Insight |

Understanding Health Canada’s regulatory


What Is a Development Index? Index Calculation Example: Pre Boomers guidelines and leveraging “drug company”
(Age 55–64)
thinking may be good advice for food man-
A development index compares the Distribution of Category Volume 21.4
distribution of the product’s dollar The percentage of the category ufacturers in today’s and tomorrow’s mar-
volume across demographic groups dollar sales contributed by age ketplace. Finding a way to add a vitamin or
to the projected distribution of the panel segment households.
to determine buyer development. mineral supplement to an existing food may
Total Projected Household Panel 17.7 be the ticket to attracting the attention of
• Baseline=100
The percentage of total household
• Overdeveloped=115 and above panel represented by the the massive aging boomer generation.
age segment.
• Underdeveloped=85 and below
The index is computed by comparing the category Aging Beautifully on the Outside
dollar volume distribution to the demographic distribution. Adult skin care and sun care products are
Dollar Index= (21.4/17.7)*100=121 big business in Canada, representing $530
Source: ACNielsen Homescan Consumer Panel
million in combined sales. Sales of facial
moisturizers alone increased 10% last year.
Teas can reduce stress. Green tea has been shown to Overall, preboomers and older boomers are clearly
boost metabolic rates. A product capitalizing on this interested in maintaining their skin in as youthful a
f e a t u r e

trend from Japan, introduced at this year’s SIAL d’Or condition as possible.
Awards in Paris, is a soft drink containing green tea. Continued on page 26.
Based on ACNielsen MarketTrack information, sales of
green and black tea are up 28% and 6%, respectively.
Business Tools for
Retail Tracking
Measure Ethnic Marketing Return On Get Out on a LIM
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Did you know?
The explosive growth of the ethnic population, specifically
• 230 retail stores open or close every day.
Hispanics and African-Americans, has initiated one of the
biggest opportunities for expansion within the consumer pack- • 205 stores change their owner, supplier, or marketing
aged goods industry. With increased purchasing power and group reporting relationship every day.
evolving product needs and preferences, ethnic consumer groups TDLinx Does!
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Good, clean, accurate location infor-
the U.S. Census Bureau:
mation management (LIM) data
• Ethnic consumers will make up an estimated 49% of the total provides you with long-term com-
U.S. population by 2050. petitive advantage. Build a com-
• Hispanics alone represent 13% of the current U.S. population prehensive data management
and are expected to double in the next 50 years. strategy that enables effective uti-
With the ethnic population continuing to grow in size and lization, delivery, and measure-
importance, marketers can no longer go without a way to mea- ment of location information to
sure ethnic consumer performance in the marketplace. Current improve business performance now. 25

| Consumer Insight | Spring 2005


ethnic measurement tools are not as robust as general marketing Why TDLinx LIM? There is an increasing demand for accurate,
tools and cannot track total ethnic sales performance and effec- complete location information delivered by a systematic and
tiveness of marketing efforts to reach these groups. To address repeatable process.
these needs, ACNielsen is introducing Target Track 2.0.
With TDLinx LIM you can:
Target Track 2.0 provides the ability to break down and analyze
• Organize and manage all locations, related hierarchies and
total ethnic vs. non-ethnic product sales at a national, regional
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• Improve data integrity/reduce business exceptions.
innovative analytics at a store level and integrating the Spectra
demographic model, Target Track 2.0 is able to decompose total • Use industry-endorsed standardized channel definitions to
product sales and associate purchasing across Hispanics, African- define your markets.
Americans and the remaining consumer base. • Aggregate sales and activity.

Target Track 2.0 allows you to: • Integrate disparate data sources.
• Communicate with outside promotion, marketing and mer-
• Evaluate ethnic promotion/advertisement effectiveness.
chandising suppliers in the TDLinx Network.

b u s i n e s s
• Understand which of your brand’s flavors, sizes, price
points appeal most to the ethnic consumer. For more information on how TDLinx LIM can return
tremendous value to your organization, contact Scott Taylor at
• Quantify ethnic marketing ROI and answer questions such
203-563-3050 or visit www.TDLinx.com.
as: Did my investment in ethnic marketing pay off? Would
allocated funds have been better spent against a general
market campaign?
• Easily integrate information into your existing
data environment.
For additional information on the benefits of Target Track 2.0,
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t o o l s

http://acnielsen.com/ci or call 1.800.988.4ACN


With this goal in mind, it is interesting to note that both Functional and Fortified
groups are underdeveloped in sun care products and yet The dairy aisle has seen an increase in activity of new
overdeveloped in facial creams and lotions that promote and innovative products in recent years. These innova-
age prevention. The opportunity here may still be to pro- tions can best be described as functional and fortified.
mote multipurpose products with cross-functional bene- Milk, at nearly $2 billion in sales, is the largest single
fits, focusing on both age prevention and sun protection purchase at food stores. Yet sales still grew by 6% this
[See chart 3]. past year, outstripping inflation and the population
growth. The reason is that milk has received more than
Chart 3: Boomer Health and Beauty Spending passing attention by product developers. First, there was
the innovation of filtered milk, which ensured longer
Development Index Pre Boomers Older Boomers
Anti-oxidant Vitamins 171 63
shelf life and a fresher taste. That was followed by milk
Adult Multi Vitamins 121 96 with added calcium, which appeals to those who believe
Calcium Supplements 168 101
they need more calcium in their diets, as well as older
Glucosamine 181 96
Herbal Vitamins 141 117 Canadians concerned with bone degeneration.
Natural Health Supplements 151 107
Cod Liver Oil 174 88 Today there are two dairies in Canada offering versions
Vitamin B 155 104
Vitamin E 153 109
of milk with added omega-3 fatty acids. With a well tar-
Nutritional Supplements 133 77 geted message, these products should find ready buyers
26
Sun Care 81 87 among the preboomer and older boomer generations.
Spring 2005|

Skin Care 31 137


Face Creams and Lotions— 128 127 A similar situation has arisen with eggs. The number-
Age Prevention
(includes: age control,
anti-oxidants, anti wrinkle,
one-selling branded egg in Canada today is an egg with
firming, lifting, anti-aging, lower cholesterol and containing omega-3 fatty acids. Its
line eraser)
sales have grown 36% in the last year.
Consumer Insight |

Source: ACNielsen Homescan 2003


Continued on page 28.
f e a t u r e
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Insights—
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Monitoring Self-Diagnostics
Preboomers are already experiencing some of the
ailments that can come with age and are becoming more
conscious of the things that are wearing out in their
bodies. Some problems require devices to monitor the
conditions in order to keep them under control. Blood
pressure monitors saw sales increase by 14% in the last
year, while diabetic test meters increased 17%.

Anti-smoking products are overdeveloped among


older boomers, since they are clearly the group most
determined to quit smoking.

Products that help maintain health or monitor a health


condition appear to have a ready market.

Advertising and Marketing


Canadian advertisers spent $6.7 billion in major
advertising in 2003. This is a 12% increase year over
28
year, according to Nielsen Media Research.
Spring 2005|

Vegging Out The findings of this report suggest that preboomers and
Traditional vegetarianism is beginning to spill over into older boomers should be a target for advertisers and
the mainstream as boomers try to find healthier foods marketers. Additionally, preboomers can signal trends
and healthier ways of eating. They are not necessarily and lead to new product ideas for following generations.
Consumer Insight |

becoming vegetarian, but they have shown a willingness


to try vegetarian products to change the way they get
How to Respond
Capitalizing on this opportunity requires strategic
their nutrients.
collaboration between manufacturers and retailers.
Sales of total tofu and meat substitute products (for exam- The common goal is securing a connection with this
ple, veggie burgers) in Canada grew 10% this past year, key demographic.
driven mainly by older boomers. There may be an oppor-
Specifically, manufacturers should consider:
tunity here for companies to build awareness around the
benefits of these types of products to preboomers. • Focusing on products and asking themselves what can
be rearranged, removed, added or replicated in
Retirement Is Cooking
new ways to appeal to boomers’ changing needs?
With more Canadians retiring at a younger age, we are
seeing a return to scratch cooking and the art of preserv- • Developing products that offer these consumers
ing. Many “from scratch” cooking ingredients are value-added benefits.
overdeveloped among those ages 55 to 64.
Continued on page 31.
With more time or potentially a refocusing of priorities,
preboomers are getting reacquainted with cooking and
f e a t u r e

preserving. This is an opportunity to take advantage of


this renewed interest in home cooking.
Stepping Outside Your
Own Borders?

Use the right marketing information


to make your expansion decisions.
Contact ACNielsen Global Services at 847-605-5884.
Business Tools for
Consumer Behavior
Instant Consumer Feedback on Your New New Product Alert lets you probe other questions to better
Products understand product usage and satisfaction:

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Question: Based on your experience using this product,
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purchase of your new products almost instantly after trial.
Homescan New Product Alert provides unique insights to
understand the motivation behind purchases of new products.
Questions such as who uses the product, how satisfied they
22%
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necessary to ensure new product success.
7%
How It Works:
Homescan panelists with online access transmit their purchas-
es via the Internet. If specially defined UPCs are purchased, a Very Likely Somewhat Likely Unlikely

brief online survey pops up asking the panelist to respond


30 Among those that tried the brand, almost 80% were very or
immediately. Since panelists transmit purchases the same week somewhat likely to buy it again.
Spring 2005|

they shop, recall effect is virtually eliminated!

Question: If you went to the store to buy <UPC item>


Special Promotion Was the Most
and it was not available, would you most likely...?
Common Reason for Purchasing this New Product*
87% 70%
Consumer Insight |

18%
19%
14% 13% 7%
6% 6%
t o o l s

Purchase another brand


Special Promotion New Product Looked Interesting
Reasonably Priced Seen Advertisement Go without until next trip
Brand Household Prefers Special Display Go to another store
to look for the brand
*Test conducted for new HBA product
If the product were not available, 70% would purchase
another brand.
b u s i n e s s

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ACNielsen Client Service or Retail Services representative or
visit our web site at http://acnielsen.com.

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Canada’s Aging Boomers: A Golden Opportunity continued from page 28.
Business Tools for
Consumer Behavior

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targeting for brand marketing, sales, category management
and consumer promotions. The Spectra Lifestyle/Lifestage Grid
segmentation platform has been optimized for the Canadian
CPG industry, and allows manufacturers and retailers to
profile Canadian consumers’ product purchases and shopping
behavior and target highest potential households where they
live and shop.

Spectra Advantage Canada allows you to:

At the same time, retailers should consider: • Create a common language between manufacturers and retail-
ers, as well as sales and marketing teams
• Evaluating space allocation. What percentage of the 31
• Enhance strategy development by executing consumer-

| Consumer Insight | Spring 2005


store should be dedicated to a category or product that
centric marketing strategies
fits the demand of this growing mass target group?
• Create strategic objectives based on consumer targets
• Developing a communication plan on how to
• Reduce or redirect consumer marketing expenditures based on
effectively connect with the aging boomer.
your precise consumer target definition
• Engaging and connecting with the target demographic • Improve targeting effectiveness and efficiencies
in-store by increasing product awareness via education
• Improve sales force efficiency and effectiveness
sessions, dedicated thematic displays, and other inter-
active services and events. • Reduce cost of retail coverage through prioritization

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Further, manufacturers and retailers should consider: your ACNielsen Client Service or Retail Services representative
or visit our web site at http://www.spectracanada.com.
• Forming strategic collaborations for more efficient
product development and marketing.

• Integrating consumer-focused information into


planning.

• Increasing support for product launches (e.g.,


product and target education, advertising, trade
activity, displays and signs).
c o n t i n u e d

• Promoting long-term planning of strategy and tactics


for the category.
http://acnielsen.com/ci or call 1.800.988.4ACN
Conclusion
The future is now. This is a different brand of senior
consumer, one that spends money more freely than
seniors of previous generations did. It’s time for
marketers to refocus their efforts to fit the changing
needs of the aging Canadian boomer.
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www.spectramarketing.com
Jack-in-the-Tiffin-Box continued from page 16.
Conclusion
Although the context for
Then there is the box itself. Interestingly, we found that the
our study was Delhi, India,
tiffin box, unlike the child’s pencil box, was not an object
we believe the developmen-
toward which he feels much ownership or affinity. From
tal and consumer issues dis-
the child’s perspective, the tiffin box is the mother’s
cussed are universal.
arena—something she stuffs with her choices. These items
are things the child usually finds boring, and he tends to The inherent conflict
regard eating from the box as an activity governed by adult between mother and child
rules. For the child, the tiffin box fulfills a functional—but around tiffin food presents
not emotional—need. a valuable opportunity
everywhere. Ironically, we
It is where the child’s desires vary from the mother’s atti-
found that mothers in our study tended to trivialize the
tudes that we found gaps. By talking with children, we
tiffin meal as a way of rationalizing their frustration with
learned what they actually want in their tiffin boxes—
fixing food that goes to waste. In fact, the tiffin occasion
smaller portions, foods that are crisp and crunchy, that are
is a time when the child can consume a healthy and nour-
spicy and tactile; foods that are mobile and can move with
ishing meal because of group dynamics. At recess with
them as they play. Chart 1 summarizes some of the differ-
friends who are also eating, the child can consume a
ences between the child’s and the mother’s perspectives.
significant amount of food—but only if the available 33

| Consumer Insight | Spring 2005


food is in a form that he or she likes. We believe that
Chart 1: Differing Perspectives on the Tiffin Box trivializing this consumption occasion, therefore, misses
an important opportunity.
Mother’s perspective Child’s perspective
Nutritious and healthy Fun By understanding the mother’s and child’s needs, we
Replication of typical Indian meal Not everyday food
have some clear directions now for the development of a
Filling
range of tiffin foods. Several food companies are actually
Should not spoil easily
Should not be inedible/
examining this specific opportunity in the Asian Pacific
unappealing on becoming cold region. ACNielsen works not only with GSK, but also
Not very spicy Spicy with Nestlé, General Mills, Kellogg and Britannia in
Should not be messy to eat
this area.
Attractive shapes
Hygienic, fresh We also believe that a microethnographic approach to this
Crisp Crisp and crunchy
issue yielded important benefits. First, it enabled a deep psy-
Tangy Tangy, fruity, chocolatey
chosocial understanding of the child and his environment. By
Surprising formats/
experiences on observing points of consumption “live,” we were able to wit-
consumption
ness the child’s community behavior, forms of play, energy
Should be able
to play with it level and disinterest in food relative to his desire for activity
Give food that needs to be Should be able and release. Another key advantage was the easy interperson-
consumed while stationary to run around with it
al dynamics that this method permits. The children quickly
c o n t i n u e d

Give lots of food so that at Smaller portions of


least some is had many things relaxed in the presence of researchers, letting us more easily
perceive their feelings and attitudes. These might be uncon-
ventional methods, but they are innovative methods that
These gaps represent important opportunities for product
could be used anywhere in the world to elicit insights.
developers. In addition to these findings, our study identi-
fied a significant beverage opportunity. Mothers rarely This article is an excerpted version of the paper presented
pack any beverages in the tiffin boxes, while a mobile, at the 57th ESOMAR Congress and Exhibition, Lisbon,
tasty, playful drink would appeal to children. Beverages Portugal, September 19–22, 2004.
also present mothers with another vehicle for adding nutri-
tion to their child’s day, which they would likely welcome.
Business Tools for
Winning the Case for Better Distribution continued from page 21.
Consumer Behavior
Maximize Reach Through Assortment After identifying a better distribution strategy for their
and Distribution current 590 stores, the next step is to build the case for
expanding distribution by identifying Save-a-Ton stores
For the first time, you can look beyond volume to identify
the strategic issues associated with assortment decisions which have a strong consumer fit but are not currently
related to buyers and reach. Homescan Shopper Optimizer carrying Jeff’s Coffee. After analysis, it was found that
leverages an internationally recognized methodology to 172 stores had a high demand index for Jeff’s Coffee
determine ideal brand/variety assortment and channel place- [See chart 4].
ment using newly developed panel-based measures. New
measures (Cumulative Penetration, Exclusive Penetration, Chart 4: Expanding Distribution to High Opportunity Stores
Additional Penetration and Sales Concentration) let you
determine what product assortment reaches the highest Save-a-Ton Stores Save-a-Ton Stores
number of buying households and the extent of buyer incre- with Jeff’s Coffee without Jeff’s Coffee

mentality provided by each item. It also measures buying Number of ACV Number of ACV
rate, purchase frequency, loyalty and repeat purchasing Demand Index Stores ($) Stores ($)

associated with those items. In addition, Shopper Optimizer 120 or higher 162 $7,117,500,000 172 $7,606,300,000
Between 81 and 119 305 $13,841,100,000 654 $29,354,000,000
can help manufacturers manage distribution by determining
80 or lower 123 $4,096,300,000 309 $10,553,400,000
the incremental penetration from additional
Total 590 $25,054,900,000 1135 $47,513,700,000
34 retailers and/or channels.
Source: ?
Spring 2005|

To achieve a comprehensive solution to assortment and


portfolio management issues, Shopper Optimizer can be
integrated with traditional volumetric Product Assortment
Based on the latest 13 weeks sales, estimated sales of
analyses. Available from VNU Global Modeling &
Analytics, Product Assortment delivers measures of SKU
Jeff’s Coffee in these new 172 stores would be approxi-
importance across both the category and the brand, quanti- mately $92,500* for 13 weeks—growing total Jeff’s
Consumer Insight |

fying the volume incrementality and cannibalization effects Coffee sales in Save-a-Ton stores by 41%.
on both.
Case Closed: Gaining, Expanding and
Key Questions Addressed:
Protecting Distribution
• With which assortment can a retailer/manufacturer reach As the case study highlights, gaining, expanding and
the highest number of buying households? protecting distribution can be achieved by putting the
• Which brand/varieties have a high number of exclusive best consumer information together to help prove a fit
buying households?
between your brand’s consumers and your retailer’s
• Which brands/varieties attract new buyers to the retailer? shoppers. At the end of the day, those manufacturers, no
• How do buying rates, purchase frequency, loyalty and matter how large or small, that have a keen awareness of
repeat purchasing vary across brands/varieties?
the fit between their brand’s consumers and their retailer’s
• What incremental impact does each distribution shopper will build a much stronger case for optimizing
channel offer?
distribution in key retail stores.
To learn more about Shopper Optimizer, please contact your
c o n t i n u e d

ACNielsen Client Service or Retail Services representative or For information on Spectra’s OnDemand Small Business
visit our web site at http://acnielsen.com. Solutions and to receive a free sample report for our
product, Distribution Builder, visit www.spectramarket-
ing.com/ondemand or call Steve Kapinus at
866.524.2568.

*The sales figure for the 172 new stores is estimated by multiplying the average sales
per million ACV (for stores indexing 120+) by the ACV for the new stores:
$12.16 × $7,606,300,000 / 1,000,000 = $92,492.
http://acnielsen.com/ci or call 1.800.988.4ACN
Business Tools for
Ethnic Marketing By the Numbers continued from page 13.
Retail Tracking
Conclusion Measure the Entire Liquor Store
Integrating available data from multiple sources enabled Universe within Each Market
VNU to tackle the four steps to ethnic marketing success
Seven new and improved Liquor Markets
and provide a more complete picture of the Hispanic
LiquorTrack® is the only service in the industry providing critical
consumer for our client—that is:
market-level information for the large and growing Liquor
• Picking the right geography: VNU was able to identify channel. Enhanced markets now include: Atlanta, Boston,
Denver, New Jersey, Minneapolis, New York City and Miami.
significant Hispanic markets and the retailers in them
valued by Hispanic consumers. The new and improved LiquorTrack:

• Picking the right category segments: Its data revealed • Measures the entire Liquor store universe within each
market as defined by TDLinx.
the key SKUs and brand dollar opportunities.
• Increases sample sizes by 50% overall, with representation
• Picking the right marketing mix: VNU determined of critical independents as well as key chains.
which products to promote and how to best attract • Utilizes a superior projection design using U.S. Census
Hispanic consumers in that market. data Liquor store ACVs.

• Picking the right execution strategy for the right place: Look for upcoming Liquor channel market relaunches: Chicago,
Based on the data, VNU’s advice was to target the Connecticut, Maryland, Central Florida (Tampa/Orlando), 35

| Consumer Insight | Spring 2005


bicultural and less acculturated Hispanic consumers North Florida (Jacksonville/Panhandle).

with Spanish-language ads. To learn more about LiquorTrack, please contact your
ACNielsen Client Service or Retail Services representative or visit
our web site at http://acnielsen.com.

http://acnielsen.com/ci or call 1.800.988.4ACN

Survey Design continued from page 9.

Yet another flight of questions asked panelists to identify


services now offered in the store shopped most often for
groceries, then select the top three services not currently
available that they would like offered at the store from a list
of 20 alternative services.

A total of 34,804 households participated in the survey: 30,952


Hi/Lo grocery shoppers; 17,346 EDLP grocery shoppers; 3,955
specialty grocery shoppers; and 19,123 mass supercenter shop-
pers. Households were further segmented based on spending
levels into top-, medium- and light-spending shoppers.

Retail point-of-sale volume and share data was extracted from


c o n t i n u e d

the ACNielsen Strategic Planner service, supplemented by the


ACNielsen Wal-Mart Channel service. Primary channels included
in the study were grocery, mass merchandisers, supercenters
(includes Kmart, Target and Wal-Mart entries), drug stores,
warehouse clubs, dollar stores and convenience/gas stores.

Note that, because ACNielsen Homescan measures household


As emerging ethnic markets continue to become more buying behavior, warehouse club information does not include
mainstream in the U.S., their marketing importance also purchases by small businesses or non-profit organizations.
grows. Working with VNU’s stable of leading companies, Likewise, immediate product consumption sales and gasoline-
only sales are not recorded for the convenience/gas channel.
clients are using tools, data and disciplines to integrate
information and find the opportunities waiting within. Channel and retailer-specific store counts included in the survey
have been assembled by TDLinx.
Get Out on a LIM.

TDLinx LIM • Location Information Management™


Application Development
▼ Category Management
Co-Marketing
Did you know? That 230 retail Looking for Consumer Targeting
Coupon Redemption
stores open or close every day, or that 205 CRM
results here? Data Warehousing


stores change their owner, supplier, or marketing Database Marketing
group reporting relationship every day? then Direct Mail
ERP
FSI
TDLinx Does! Good clean, get integration In-Store Media
Manage Party Data
accurate location information management Merchandising
(LIM) data provides you with a long-term
ready with the Pay-For-Performance
Quality Assurance
competitive advantage. Build a comprehensive TDLinx Network Sales & Marketing Agencies
Sales Force Automation
data management strategy that enables Sampling/Demos
Scanner
effective utilization, delivery, and Syndicated Research
Aggregate Trade Promotion Planning
measurement of location information VNU Advisory Services
Integrate
to improve business performance now.
Communicate With TDLinx LIM you can:
• Organize and manage all locations, related
Why LIM? The increasing demand Evaluate
hierarchies and commerce codes
for accurate, complete location information • Improve data integrity/reduce business
delivered by a systematic and repeatable process. exceptions
• Use industry-endorsed standardized

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Business Tools for
Retail Tracking
Spectra Loyalty Analytics Spectra Loyalty Analytics
Category ShareCast Targeted New Customer List
Powered by Homescan® Changing consumer behavior can be difficult and requires a
targeted focus. You need to find specific households that are not
Spectra can help you understand the purchase dynamics of your shopping with you currently and create ways to target them.
customers from both a geo-demographic and share-of-wallet If you are looking for a proactive approach to acquire new
perspective. By combining Spectra’s consumer segmentation customers, then Spectra can help.
with Homescan panel data, Spectra Category ShareCast pro-
vides a measure of how much each cardholding household is Spectra can provide you with a list of real people who live around
spending now on each product category within the chain and your stores and are not currently part of your frequent shopper
across all channels in total. card program—including their names, addresses, phone numbers
and demographics.
Category ShareCast creates a category-specific share-of-wallet
metric, which enables you to understand where revenue oppor- Spectra can also help you understand what motivates their shop-
tunities exist across all customers, by segment, by store cluster ping behaviors and connect with them more effectively by provid-
or by store. ing insights into what products they have a greater potential to
purchase and what media they are more likely to prefer.
Create strategies and tactics for targeted marketing and mer- With Spectra Targeted New Customer List, you can:
chandising activities that will maintain loyalty among your
best customers and close the gap on potential sales. With • Find households that match the key demographics of your 37

| Consumer Insight | Spring 2005


Category ShareCast, you can: current customers or your best customers.
• Gain insights on their “potential to purchase” key cate-
• Understand what demographic groups are currently driving
gories, subcategories and brands and their media usage that
your total and category-level sales.
can be used to develop promotional tactics to attract these
• Identify which households are most loyal to your chain by new households to your stores.
category and which households are high category spenders
• Connect with real people and go beyond general mailings to
but not at your chain.
“boxholders.”
• Understand which shoppers use coupons, purchase private
• Reduce your advertising expenses by focusing offers on spe-
label products, buy random weight items or shop only for
cific types of households.
specials and use these insights to develop customized mar-
keting programs. For more information, please call John Chesak at 312-583-5139
• Grow revenue by understanding and attracting customer or email him at john_chesak@spectramarketing.com or visit
groups that are a good fit for your store but may shop www.spectramarketing.com/products/r_targetedNewCust.jsp.
more at your competitor for specific categories.

b u s i n e s s
For more information, please call John Chesak at 312-583-5139
or email him at john_chesak@spectramarketing.com or visit
www.spectramarketing.com/products/r_loyaltyAnalytics.jsp.

t o o l s

http://acnielsen.com/ci or call 1.800.988.4ACN


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