2 What are Nielsen & IRI?Supplier of information to consumer packaged goods industryInformation supplied:Scanner dataManufacturer coupons & featuresManufacturer displaysInformation helps companies to make more informed decisions
3 How is Data Collected?Sample of stores (Grocery, Drug, Convenience, Mass Merch., Warehouse stores)Scanner dataUPC info, Price, Quantity all recordedFeaturesCentrally collected and coded (daily)DisplaysCollected by store auditors (1X/week)
5 Dimensions:MarketsMarkets can be organized by class of trade, region, or both (also custom markets created by firms)COTFoodDrugMassCombinedRegion (usually dependent on company’s sales force organization, I.e. Colgate= North, South, Pacific)NorthSouthEastWestIe, in which regions are diff ap/ deo forms the strongest?Stick, north/ pacificGel, pacificAerosol, south
6 UAP CATEGORY- Size Trend - by COT Large sizes are increasing, small decreasing
7 Dimension: Product The Brand? Particular Flavor? Particular Size? You can select more than one SKU (including competitors).
11 Measure:Volume Baseline Incremental Normal expected volume for the product in absence of any store level promotional activityEstimated through modelingIncrementalThe proportion of total volume exceeding expected (baseline) volume.Incremental Volume = Actual - Baseline
12 Changes in Volume (Baseline) Distribution RelatedVelocity RelatedPriceSupport (coupon, TV)Awareness/ImageCompetition
13 Volume Promoted Non-Promoted Sold on either DisplayFeaturePrice Decrease (TPR)Non-PromotedActual sales recorded for the weeks with no promotional activity.
14 10 cases of subsidized volume (volume that would have been expected without a promotion)
15 Measure: Distribution All Commodity Volume (ACV)ACV Weighted Distribution% Stores SellingAverage Weekly ACV Wtd
16 Measure: Distribution Measure: All Commodity Volume (ACV)Definition: The total annual dollar sales of all items sold. ACV can be expressed for a particular geographic area, retail outlet type (Food, Drug, Mass), key account or RMA.New York Total Market$100MM ACVNew YorkPathmarks$30 MM (30%)New YorkA&P$15MM (15%)
17 Measure: Distribution How Much Distribution Does My Brand Have?Measure: ACV Weighted DistributionDefinition: The % of total ACV represented by stores where at least one of a product was scanned.ACVBrand XBrand YStore A$30 MMXStore B$40 MMStore C$15 MMStore DTotal Mkt$100 MM70%30%
18 Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period?Store%ACVWk 1Wk 2Wk 3Wk 44Wk TotalStore A30%XStore B40%0%Store C15%Store DTotal Mkt100%Answer: 30%
19 Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period?Store%ACVWk 1Wk 2Wk 3Wk 44Wk TotalStore A30%0%Store B40%XStore C15%Store DTotal Mkt100%55%Answer: 55%
20 Measure: Distribution ACV Weighted Distribution vs. Stores Selling Over a 4 Week Time Period?Store%ACVWk 1Wk 2Wk 3Wk 44Wk TotalStore A30%0%Store B40%XStore C15%Store DTotal Mkt100%55%ACV Wtd Distribution=40% + 15%= 55%% Stores Selling=2/4=50%
21 Measure: Distribution ACV Weighted Distribution vs. Avg Weekly ACV Weighted Distribution Over a 4 Week Time Period?Store%ACVWk 1Wk 2Wk 3Wk 44Wk TotalStore A30%0%Store B40%XStore C15%Store DTotal Mkt100%55%ACV Wtd Distribution=40% + 15%= 55%Avg Weekly ACV Wtd Distribution=( )/4=27.5%
22 Measure: SalesDevelopment Index: Per capita sales of a product/category/brand in a particular geography indexed to per capita sales of the same product/category/brand at Total U.S.(Product’s Volume in Market/Population in Market)(Product’s Volume in Total U.S./Population in Total U.S.)X 100
23 Sales CDI – Category Development Index BDI – Brand Development Index Measures the Category’s volume development in a market compared to the category’s development in the Total U.S.BDI – Brand Development IndexMeasures the Brand’s volume development in a market compared to the brand’s development in the Total U.S.PDI – Product Development IndexMeasures the Product’s volume development in a market compared to the product’s development in the Total U.S.
24 Sales Example: Product Development Index Sales Population Sales/Pop. NY Mkt.150,0008,484,000.01768Total U.S.4,550,000206,000,000.0221PDI = (.01768/.0221) x 100 = 80
25 Sales Why use Development Indices? Help you to understand development by marketIdentify needs and opportunitiesGuidelines for Reading Development Indices:89 or below: Underdeveloped90-110: Average Development111 or above: Highly Developed
26 Sales Basic Merchandising Conditions: Any Merchandising Feature Includes all types of trade merchandisingFeatureDisplayFeature and DisplaySpecial PackPrice Reduction (5% or greater)
27 Sales Feature Only vs. Any Feature Display Only Feature Any Display
28 Sales Merchandising Measures: % of Volume % of ACV Percent of retail volume sold in conjunction with trade merchandising activity% of ACVMeasures “support”Percent of geography ACV that participated in the trade merchandising activity
29 Measure: ShareShare is a calculation based on unit, equivalized unit, or dollar volume.Share measuresShare = (product vol/ category vol) * 100EQ share (EQ units = # of equivalent weighted units scanned for a product class or item)Share change vs. year ago (point change)This year’s share – last year’s shareLook at relationship between share changes and category volume changesi.e. Deo/ Ap 54 oz equiv cases
30 COT Segmentation - EQ Share Mass is the largest and fastest growing COT1999 Category EQ Volume by Class of Trade(% Change vs. YAG)Mass is the largest and fastest growing Class of TradeSpecial Sales, Military and Other make up a relatively small percent of the business25
31 Category Dynamics -Consumer Hierarchy of Needs Consumers choose an AP/Deo product based on a hierarchy of needs which begins with form, first and foremost1. Form2. Gender3. Brand4. Type5. Scent6. SizeSticksGelsAerosolsRoll-OnSoft SolidsMaleFemaleUnisexSpeed StickRight GuardLady Speed StickSecretAPDeoScentedUnscentedLargeSmallDecision hierarchyPrice is not firstuntit purchase statt oz. purhcase - sign part of decision processLowTransferableDemandHighTransferableDemandSource: Nielsen Household Panel
32 Measure: Price Retail price facts are gathered from: Retailer’s tapesRetail displays (marketing reps)Feature ads (feature coders)Price data is gathered separately from store movement data (if feature prices found are lower than tape prices, tape price is over-ridden)
33 Price Price Metrics Price per unit Price per Equivalent Unit Package price for all scanned sales of a particular productPrice per Equivalent UnitThe package price for all sales of a particular product divided by the custom-defined unit equivalency (i.e., price per pound)Average priceWeighted average price for all scanned sales of a product (weighted average price for a period is computed by dividing total dollars during the period by total units sold [instead of dividing total price each week by the number of weeks])Non – promoted priceActual product price in absence of a trade promotion (feature, display, tpr)Promoted pricePrice in stores with a feature, display, or tpr
34 Okay, so how does this relate to Brand Management and my job this summer?
35 Volume % Chg vs. YAG (G/D/M) So, How Does This Apply to BM?Hey Fuqua Intern, How can we sell the sales force on supporting Diet Mtn Dew?Volume % Chg vs. YAG (G/D/M)Diet DewDiet FlavorsExtra 560 MM Cases between Diet Rite Flavors at 10MM, Diet Dad’s, and other regional Diet CSDsIt’s a share game with a little bit of category growth.Diet CSDsDiet ColasSource: IRI G/D/M 7/00
36 So, How Does This Apply to BM? Hey Fuqua Intern, which SKUs do we really need to get out on shelf?Channel ACV Weighted DistributionGrocery C&GDiet Dew Diet Pepsi Diet Dew Diet Pepsi6 Pack 45% 76% 9% 43%12 Pack 88% 99% 22% 79%24 Pack 28% 67% NA 12%2 Liter 92% 98% 25% 85%20 oz 48% 87% 91% 98%TM 99% 100% 92% 100%Source: IRI ‘99
37 So, How Does This Apply to BM? Hey Fuqua Intern, Which 15 markets should we sample Diet Mtn Dew in?Extra 560 MM Cases between Diet Rite Flavors at 10MM, Diet Dad’s, and other regional Diet CSDsIt’s a share game with a little bit of category growth.Source: IRI G/D/M 7/00