Introductie tot AC Nielsen 2de Lic Toegepaste Economische Wetenschappen A.O. Meertalige bedrijfscommunicatie 12 Oktober 2004 27 Oktober 2004

AGENDA What does AC Nielsen Marketing Research stand for ? Retailing in Belgium and Europe Structure of AC Nielsen information Business Case

Hoe heet de Amerikaanse zakenman die het presteerde om tijdens de Grote Depressie een Food & Drug Index op te bouwen?

A.C. Nielsen Company Worldwide Founded in 1923 by Arthur Charles Nielsen in Chicago Currently active in more than 100 countries Employs 20.000 full time persons Turnover: 1,75 billion euro N°1 marketing research company in the world Part of VNU since beginning of 2001

VNU employs some 38,000 people worldwide, and is active in more than 100 countries. Around half of our EUR 3.9 billion in total revenues is generated in North America. Activity: Group managed by the office in: Marketing Information New York (US) and Haarlem (Europe) Media Measurement New York Business Media London (Europe) and New York (US) Directories Brussels

The fundamental problem Brand Manufacturers Performance of my products versus market & competitors? Supply Chain Retailers

? MARKET DYNAMICS MARKET SIZE? SHARES? DISTRIBUTION? PRICE? Retailers and manufacturers need information and insight into four key areas MARKET DYNAMICS ? MARKET SIZE? SHARES? DISTRIBUTION? PRICE?

? MARKET DYNAMICS KEY COMPETITORS Retailers and manufacturers need information and insight into four key areas MARKET DYNAMICS KEY COMPETITORS ? What’s My Competition Doing? Are They Winning? How Can I Succeed Versus My Competitors?

MARKET DYNAMICS KEY COMPETITORS CONSUMER DYNAMICS Retailers and manufacturers need information and insight into four key areas MARKET DYNAMICS KEY COMPETITORS CONSUMER DYNAMICS WHO? WHAT? WHY? WHEN? WHERE?

MARKET DYNAMICS KEY COMPETITORS CONSUMER DYNAMICS Retailers and manufacturers need information and insight into four key areas MARKET DYNAMICS KEY COMPETITORS CONSUMER DYNAMICS Advertising Coupons Promotions EXTERNAL INFLUENCES

Our Mission: we strongly believe that our package of client service expertise, tools and high quality data can play a significant part in helping our clients achieve its strategic priorities and associated business objectives. TOOLS PEOPLE Ask the participants the question about how do we deliver value through Tools, People and Expertise? EXPERTISE

Tracking What Happens at the Retailer Point of Sale . . . 1. Retail Measurement Tracking What Happens at the Retailer Point of Sale . . . ACNielsen Collects Data: Of more than 500 product categories In over 150,000 retail outlets (±50.000 in Europe) In over 80 countries On six continents Through Scanning and Auditing

An output example of Retailer Point of Sales Data: Cream Cheese in Europe 167 Millions KG % Evol:+4%

In welk land is roomkaas het goedkoopst?

But for a More Complete Picture . . . 2. But for a More Complete Picture . . . Volumetrics by Retailer Market Share Price Causal Factors Retail Measurement

Link Store Information to . . . The Consumer Behind the Purchase Volumetrics by Retailer Market Share Price Causal Factors - Who buys what? - Where they shop? - How often they shop? Consumer Panel Retail Measurement

Over 128,000 Households Worldwide Consumer Panel Over 128,000 Households Worldwide Country Households Service Type U. S. 52,000 Homescan U.K. 10,450 Homescan France 8,000 Homescan Canada 9,600 Homescan Germany 9,000 Homescan South Africa 4,000 Homescan Australia 5,000 Homescan New Zealand 1,500 Homescan Italy 6,000 Homescan Mexico 4,000 Homepanel Colombia 3,000 Homepanel Spain 2,500 Homepanel Finland 1,600 Homepanel Greece 1,250 Homepanel Israel 2,000 Homepanel Switzerland 3,750 Homescan

Hoeveel keer koopt een gemiddeld Frans gezin een pakje roomkaas aan?

An example: Consumer spending data in France

Advanced analytics & modeling 3. Advanced analytics & modeling One Step Beyond Which drivers influence items, brands or category results? Which drivers influence store or chain results? What is the marginal contribution of each marketing mix driver on item, brand, category, store or chain? Given the scope and and granularity of the current data-sets advanced mathematical models make it possible to respond to the above questions. Richard Sears said once that of each dollar spend on advertising half is wasted, but he did not know which half. Today we can not only identify which half is wasted but we can even identify on which marketing variables will return the greatest revenue or profits.

An example: what is my optimal price? A Little Step Beyond An example: what is my optimal price?

A Big Step Beyond Specific Issues; Specific Answers Decomposing historical brand sales ensures clients can quantify return on investment Buy 1 Get 1 Free Offer Return On Investment Analysis Incremental Volume: 1 million litres Incremental Contribution: £400,000 Cost Of Promotion: £300,000 Return On Promotion Investment: £100,000

AGENDA What does AC Nielsen Marketing Research stand for ? Retailing in Belgium and Europe Structure of AC Nielsen information Business Case

A.C. Nielsen Company Belgium 50 years on the market! 25 Million € 170 full time persons 200 regular clients

The Retail index Desk Research Field Research Sample Universe one time only continuous Individuals households retail stores wholesalers with the sample stores we count 12.5% of total turnover or the purchases of 500,000 households

Disproportionate sample

Retailing Some facts and some figures

Turnover of the ACNielsen food universe + 4.9%

Private consumption (Billions Euro) = 2003: ACNielsen Food Universe = 64 % of food retailing = 23 % of retailing = 11 % of total private consumption Private consumption (Billions Euro) = 28.3 Billions Euro 98.7 121.6 169.3 6% 11% 53% 30% 17% 7% 11% 50% 32% 18% 8% 12% 46% 34% 20% Source: Fedis & ACNielsen

Retail is losing market share in total private consumption... Source: Fedis & INS

Hoeveel voedingswinkels waren er in 1970 in België?

Evolution of the number of stores (000 stores) 8770 8629 = - 141 stores

AC Nielsen SHOPTYPES MARKET F1 : GROTE SUPERMARKTEN Ruim assortiment, nationale merken en PL. F1 : Mass Retail (limited list) Colruyt, Delhaize Le Lion, Carrefour (CRF, Super GB), Match, Mestdagh (Super M Champion) & Cora F2 : ONAFHANKELIJKE WINKELS Ruim assortiment, nationale merken (en PL). F2 : Medium Non-Integrated Distribution AD Delhaize, Spar, GB-Partner, GB- Contact, Alvo, Samgo, Intermarché HD: HARD DISCOUNTERS. Beperkt assortiment, PL, lage prijs. HD : Hard Discount Aldi & Lidl F3 : WINKEL OP DE HOEK Beperkt assortiment, nationale merken. F3 : Small Distribution All Self-Service Shops with a surface < 400 m² (and not belonging to one the shop types above. Company Owned Independant

Market share by new shoptype New Shoptypes Market share by new shoptype 03 vs. 02

New Shoptypes Average turnover per store in 1994-2003: (en 000 Euro) - current prices

Evolution number of Hard Discounter stores New Shoptypes Evolution number of Hard Discounter stores +52

Wie behoort tot de Top 3 in retail?

European Retailing

Europe today 3 602 900 km² 378 million inhabitants ( 77% = urban) 426.900 food stores (01/01/1999) 4.900 hypermarkets { >2500m² } ( = 1.1%) 13.950 Large supermarkets { >1000m² } ( = 3.3%) 42.800 Small supermarkets { >400m² } (= 10%) 102.700 Superettes { >100 m² } ( 24.1%) 262.550 Clerk service shops (61.5%)

Hyper- & Supermarkets take most of the EURO’s (Turnover split by shoptype) Hypermarkets 32.4€ L Supermarkets 23.3€ S Supermarkets 25.1€ Conv. SM 13.1€ Trad 6.1€

… however Europe is still a mosaic

How different are France, Belgium & Holland?

Retailing Private Labels in Belgium

Global Market Share of Private Labels in Belgium Food + Non-food (value share)

Value Share of Private Labels YTD P09/04 PAPER PETFOOD/CARE HOT BEV. NON ALC BEV CONFECT. FABRICS

Hard Discount in Europe

Growth of discounters in Europe Market share (value) Source: Euromonitor, NatWest Securities and AIM estimates

Is there a country which is not threatened by pan european discounts? Italy Germany Spain UK Portugal Greece Austria Bubble Size: Discount sales per capita France Belgium Growth in No. of stores 1997-2002 Netherlands Denmark + Value Market Share

magine! i This is not imagination: each statement is true! Purchase power of €50 million per item! Attracting 35% of shoppers weekly! Spending €30 per trip, while saving €30! Selling €200 million in 12 minutes! 1 Hard discount store per 10.000 inhabitants! Discount retailers capture 50% of the market growth! 80% of consumers judge hard discount product quality equal to supermarkets! Price reduction strategy of the brands do not work! This is not imagination: each statement is true!

BREAK

AGENDA What does AC Nielsen Marketing Research stand for ? Retailing in Belgium and Europe Structure of AC Nielsen information Business Case

Structure of the information AC Nielsen information is always structured around the same four dimensions.

The 4 AC Nielsen dimensions : Markets

2 1 3 4 5 MARKET 1. ACNielsen shoptypes F1 F2NI F2I F3 2. AC Nielsen Areas Area 1 = Oost- en West-Vlaanderen Area 2 = Limburg, Antwerpen en Vl. Brabant Area 3 = 30 gemeenten rond Brussel Area 4 = Henegouwen en Waals Brabant Area 5 = Luik, Namen en Luxemburg

Currently coöperating distributors : MARKET 3. AC Nielsen Chain Data Currently coöperating distributors : Carrefour, Colruyt, Delhaize, Match, Mestdagh, AD Delhaize, Battard, Profi, Intermarché, Spar, Prima. Aldi & Lidl: Based on ticket collection at exit through field team.

The 4 ACNielsen dimensions : Products Markets Products 1. Markets 2. Products

PRODUCTS CLIENT databases are structured according to the clients wishes, based upon the ACNielsen characteristics. Total Market Manufacturer Brand Size Flavor

The 4 ACNielsen dimensions : Periods Markets Products 1. Markets 2. Products Facts 3. Periods

PERIOD Data are received on a weekly basis and can be produced and delivered weekly (9 days delay). However most clients receive 4-weekly data delivered from 1 to 13 times per year. In the database periods are defined by the last day included in the period : SEP1704 : starts August 23 2004, ends September 17 2004 Cumulation of 13 periods = One year (MAT). Other cumulation -> (YTD, season, …)

The 4 ACNielsen dimensions : Facts Markets Products 1. Markets 2. Products Facts Periods 3. Periods 4. Facts

FACTS A. SALES (not for chains) 1. Sales units equivalized - sales expressed in the equivalized unit the client has chosen (liters, kilos, ...) 2. Sales units - sales expressed in “Number of EAN’S” 12 Pick Up singles = 12 (EAN’S scanned) 1 Pick Up 12 pack = 1 (EAN scanned) 3. Sales value - Sales expressed in Euro

FACTS B. DISTRIBUTION (not for chains) 1. Numeric Distribution - % of shops in the market breakdown that have sold the product (at least once) during the considered period 4 weeks) 2. Weighted Distribution - % of turnover those shops represent within the total turnover of the product class

FACTS C. SHARES and PRICES 1. Average Retail Price Equivalized - Sales Value / Sales Units Equivalized 2. Share Units - Market Share expressed in Units. 3. Share Units Equivalized - Market Share expressed in Kg... 4. Share Value - Market Share expressed in euro

En nu even oefenen!

Let ’s practice ... WD : 20 ND : 40 WD : 50 ND : 45 What can you say about our distribution ?

Let ’s practice ... Sales Value : 2.000.000 Sales Units : 20.000 Sales Volume (kg) : 40.000 Sales Value : 3.000.000 Sales Units : 20.000 Sales Volume (kg) : 70.000 What did we do ?

Let ’s practice ... Sales Value : 2.000.000 Sales Units Equivalized: 20.000 Share in Value : 25 % Share in Units Equivalized: 15 % What can you say about our pricing?

Let ’s practice ... Sales Value : 4.000.000 Any Promo WD : 10 Sales Unit Equivalized : 20.000 Sales Value : 5.000.000 Any Promo WD : 40 Sales Unit Equivalized: 30.000 What happened ?

En nu de finale: the business case!

INPUT EXCEL Files with data on a certain market : Products : Markets : One Market besides PL, three important brands and one booming new brand Markets : Total Belgium All Shop Types 3 Regions Periods : 4-weekly periods 3 years backdata Facts : Sales Distribution Shares & Prices Promo & shelf

INPUT 11 EXCEL Files UG-SU Sales Units UG-SUE Sales Units Equivalized UG-SV Sales Value UG-WD Weighted Distribution UG-ND Numeric Distribution UG-PWD Promo WD UG-P Price UG-SHU Share Units UG-SHUE Share Units Equivalized UG-SHV Share Value UG-SHELF Shelf Space

INPUT

OUTPUT A written report (including charts) to be submitted on 21/12/04 (MTB) or 22/12/2004 (lic TEW) In 2 copies Maximum 10 pages (no appendix) What are the major market trends ? What is the position of our brand ? What are the major trends for our brand ? What are your recommendations ?

Contact: Joëlle Lontie Plejadenlaan 73 1200 Brussel E-mail: Joelle Contact: Joëlle Lontie Plejadenlaan 73 1200 Brussel E-mail: Joelle.Lontie@Belgium.acnielsen.com