Nielsen/IRI Intro Session

What are Nielsen & IRI? Supplier of information to consumer packaged goods industry Information supplied: Scanner data Manufacturer coupons & features Manufacturer displays Information helps companies to make more informed decisions

How is Data Collected? Sample of stores (Grocery, Drug, Convenience, Mass Merch., Warehouse stores) Scanner data UPC info, Price, Quantity all recorded Features Centrally collected and coded (daily) Displays Collected by store auditors (1X/week)

4 Data Dimensions Market Product Time Measure

Dimensions:Markets Markets can be organized by class of trade, region, or both (also custom markets created by firms) COT Food Drug Mass Combined Region (usually dependent on company’s sales force organization, I.e. Colgate= North, South, Pacific) North South East West Ie, in which regions are diff ap/ deo forms the strongest? Stick, north/ pacific Gel, pacific Aerosol, south

UAP CATEGORY- Size Trend - by COT Large sizes are increasing, small decreasing

Dimension: Product The Brand? Particular Flavor? Particular Size? You can select more than one SKU (including competitors).

Product Category: Carbonated Soft Drinks Manufacturer: Pepsi-Cola Company Type: Pepsi Colas Trademark: Pepsi Colas Flavor: Pepsi Colas-Wild Cherry Diet Regular: Pepsi Colas-Wild Cherry R Caff. Free: Pepsi Colas-Wild Cherry Regular C Size: Pepsi Colas-Wild Cherry Regular Caff.12oz. 6 ct can

Time Generally 2 years available in database Broken into periods by Weeks 52 Weeks 26 Weeks 13 Weeks Months – 4 or 5 Weeks Individual Weeks Customizable periods Back data available

Measures Volume Distribution Sales Price

Measure:Volume Baseline Incremental Normal expected volume for the product in absence of any store level promotional activity Estimated through modeling Incremental The proportion of total volume exceeding expected (baseline) volume. Incremental Volume = Actual - Baseline

Changes in Volume (Baseline) Distribution Related Velocity Related Price Support (coupon, TV) Awareness/Image Competition

Volume Promoted Non-Promoted Sold on either Display Feature Price Decrease (TPR) Non-Promoted Actual sales recorded for the weeks with no promotional activity.

10 cases of subsidized volume (volume that would have been expected without a promotion)

Measure: Distribution All Commodity Volume (ACV) ACV Weighted Distribution % Stores Selling Average Weekly ACV Wtd

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 ACV New York Pathmarks $30 MM (30%) New York A&P $15MM (15%)

Measure: Distribution How Much Distribution Does My Brand Have? Measure: ACV Weighted Distribution Definition: The % of total ACV represented by stores where at least one of a product was scanned. ACV Brand X Brand Y Store A $30 MM X Store B $40 MM Store C $15 MM Store D Total Mkt $100 MM 70% 30%

Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period? Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total Store A 30% X Store B 40% 0% Store C 15% Store D Total Mkt 100% Answer: 30%

Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period? Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total Store A 30% 0% Store B 40% X Store C 15% Store D Total Mkt 100% 55% Answer: 55%

Measure: Distribution ACV Weighted Distribution vs. Stores Selling Over a 4 Week Time Period? Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total Store A 30% 0% Store B 40% X Store C 15% Store D Total Mkt 100% 55% ACV Wtd Distribution=40% + 15%= 55% % Stores Selling=2/4=50%

Measure: Distribution ACV Weighted Distribution vs. Avg Weekly ACV Weighted Distribution Over a 4 Week Time Period? Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total Store A 30% 0% Store B 40% X Store C 15% Store D Total Mkt 100% 55% ACV Wtd Distribution=40% + 15%= 55% Avg Weekly ACV Wtd Distribution=(40+55+15+0)/4=27.5%

Measure: Sales Development 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

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 Index Measures the Brand’s volume development in a market compared to the brand’s development in the Total U.S. PDI – Product Development Index Measures the Product’s volume development in a market compared to the product’s development in the Total U.S.

Sales Example: Product Development Index Sales Population Sales/Pop. NY Mkt. 150,000 8,484,000 .01768 Total U.S. 4,550,000 206,000,000 .0221 PDI = (.01768/.0221) x 100 = 80

Sales Why use Development Indices? Help you to understand development by market Identify needs and opportunities Guidelines for Reading Development Indices: 89 or below: Underdeveloped 90-110: Average Development 111 or above: Highly Developed

Sales Basic Merchandising Conditions: Any Merchandising Feature Includes all types of trade merchandising Feature Display Feature and Display Special Pack Price Reduction (5% or greater)

Sales Feature Only vs. Any Feature Display Only Feature Any Display

Sales Merchandising Measures: % of Volume % of ACV Percent of retail volume sold in conjunction with trade merchandising activity % of ACV Measures “support” Percent of geography ACV that participated in the trade merchandising activity

Measure: Share Share is a calculation based on unit, equivalized unit, or dollar volume. Share measures Share = (product vol/ category vol) * 100 EQ 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 share Look at relationship between share changes and category volume changes i.e. Deo/ Ap 54 oz equiv cases

COT Segmentation - EQ Share Mass is the largest and fastest growing COT 1999 Category EQ Volume by Class of Trade (% Change vs. YAG) Mass is the largest and fastest growing Class of Trade Special Sales, Military and Other make up a relatively small percent of the business 25

Category Dynamics -Consumer Hierarchy of Needs Consumers choose an AP/Deo product based on a hierarchy of needs which begins with form, first and foremost 1. Form 2. Gender 3. Brand 4. Type 5. Scent 6. Size Sticks Gels Aerosols Roll-On Soft Solids Male Female Unisex Speed Stick Right Guard Lady Speed Stick Secret AP Deo Scented Unscented Large Small Decision hierarchy Price is not first untit purchase statt oz. purhcase - sign part of decision process Low Transferable Demand High Transferable Demand Source: Nielsen Household Panel

Measure: Price Retail price facts are gathered from: Retailer’s tapes Retail 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)

Price Price Metrics Price per unit Price per Equivalent Unit Package price for all scanned sales of a particular product Price per Equivalent Unit The package price for all sales of a particular product divided by the custom-defined unit equivalency (i.e., price per pound) Average price Weighted 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 price Actual product price in absence of a trade promotion (feature, display, tpr) Promoted price Price in stores with a feature, display, or tpr

Okay, so how does this relate to Brand Management and my job this summer?

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 Dew Diet Flavors Extra 560 MM Cases between Diet Rite Flavors at 10MM, Diet Dad’s, and other regional Diet CSDs It’s a share game with a little bit of category growth. Diet CSDs Diet Colas Source: IRI G/D/M 7/00

So, How Does This Apply to BM? Hey Fuqua Intern, which SKUs do we really need to get out on shelf? Channel ACV Weighted Distribution Grocery C&G Diet Dew Diet Pepsi Diet Dew Diet Pepsi 6 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

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 CSDs It’s a share game with a little bit of category growth. Source: IRI G/D/M 7/00

Questions?