Consumer insight.pdf

In s i gh t s t oday f o r t omorrow’s dec i s i on s

S p r i n g 2 0 0 2

The Category Hit Parade

Using Panels to Understand the Consumer

Test Marketing Plugs into the Internet

Trend Watch—Relieving Pressure at the Front of the Store

The Future ofConsumer Spending

CI Q1 Spring 2002 4/1/02 9:03 AM Page c

CONSUMERINSIGHT:

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CI Q1 Spring 2002 4/1/02 9:03 AM Page d

Knowledge

defined by

linking

consumer

attitudes

and

behavior.

CI Q1 Spring 2002 4/1/02 9:03 AM Page e

In every issue…

Volume 4, No. 1

Publisher

ACNielsen

Editors

Mark Chesney

Art Massa

Contributing Writers

Nick SorvilloSenior Vice PresidentACNielsen Homescan

Ken GreenbergVice President, Marketing ACNielsen Homescan

Jim MillerSenior Vice PresidentACNielsen BASES

Sheila LundyVice President, Field ServicesACNielsen BASES

Design & Layout

Kathy Zonyk

Editorial Board

Matthew Bell

Gary Binkoski

Joseph Bucherer

Margaret James

Kathy Mancini

Philip McGrath

Mark Puccetti

ACNielsen Global Creative Services

Laurel A. Kennedy Marketing/Communications

Slack Barshinger & Partners

Copyright © 2002 ACNielsen. Printed in USA. All rights reserved. ACNielsen, the ACNielsen logo, Category Masters, Homescan, KnowledgeWorks,MarketTrack and PineCone Research are trademarksor registered trademarks of A.C. Nielsen Company.Other brand, product or service names are trademarksor registered trademarks of their respective companies.

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Spring 2002, Volume 4, No. 1

4Executive Insight

6Cover Story: The Future of Consumer SpendingMany environmental and economic factors influence consumer

spending and shopping behavior. But understanding overall

consumer trends is just the beginning. At the heart of the matter

is pinpointing how—and how much—these trends influence the

way consumers spend.

11The Category Hit ParadeConsumers continue to be starved for time. And they look for

ways to save their personal time—including how they shop to

what they buy. The year’s fastest-growing categories speak to the

convenience trend, featuring products like one-dish entrées and

polish-saturated cleaning wipes.

16Using Panels to Understand the ConsumerThe consumer drives marketing plans. One of the most basic

building blocks to understand the consumer is panel information,

which unlike scanning data, can help explain the reasons behind

period-to-period volume changes.

20Test Marketing Plugs into the InternetThe advent of the Internet has helped simulated test marketing

replace mall intercept and phone feedback as a key way to garner

consumer response. And online test marketing presents an

affordable way to collect data on test markets.

25Trend Watch—Relieving Pressure at the Front of the StoreA recent survey reported one-third of shoppers said their

supermarket did not have enough cashiers on duty. Despite

many retailers’ best efforts, the consumer perception is that

there are not enough lanes open in the average store.

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CI Q1 Spring 2002 4/1/02 9:03 AM Page 3

In early January, we announced how ACNielsen can help you predict your consumers’

future shopping behavior through our Consumer Pre*View service. In this issue, we

share with you the latest results from our study, fielded December 2001/January 2002.

As you will recall, our study linked the renowned University of Michigan Consumer

Sentiment Index with the actual purchase behavior of our industry gold-standard

ACNielsen Homescan consumer panel households. We took a subset of the

questions from the Index and asked our panelists to respond with the intent of

matching consumer attitudes with the very purchase behavior that we track via

our Homescan panel.

ACNielsen found that consumers’ purchasing behavior was foreshadowed by their

surveyed attitudes and preferences. This represents a critical link we all have been

searching for—a predictive correlation between how consumers feel and what they

buy. More important, ACNielsen can now help you understand if this same relation-

ship holds true for your product portfolio and how your categories may be impacted

in the coming months.

It’s not hard to see the implications on a broad level. With fewer consumers indicating

a preference for dining out, restaurants will continue to be affected, with a subsequent

opportunity for CPG manufacturers and retailers to highlight enticing meals and meal

solutions for consumers who are staying at home. And with consumers also showing a

higher incidence of spending time with family, larger meal solutions may be an area of

opportunity for marketers.

The current focus on America and patriotism also remains high, suggesting a benefit

in highlighting American-made products where relevant—either with products that

are manufactured in America or that support and sponsor American themes.

On a more specific level, our new capabilities can help you understand and predict

your consumers’ future shopping behavior by understanding their attitudes today—

within your categories and across channels. We can help determine the time lag

between your consumers’ attitudes and their planned behavior. And we can tell you

if those attitudes will have a major or minor influence on future behavior.

With Consumer Pre*View, ACNielsen can now help you answer questions such as:

• How will my categories be affected in the future by current consumer attitudes?

Will they be affected at all?

• Are my categories stable or do they have a higher chance of being affected by

consumer sentiment?

• Is now a good time to make changes in pricing, promotion or assortment?

• How can I show my vendor partners that consumers will be changing their

purchase behavior in my category?

We at ACNielsen look forward to continuing to offer you the best, most innovative

services to help you manage your business.

Tim CallahanPresidentACNielsen U.S.

Our new

capabilities can

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and predict your

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When I spoke to one senior industry group last fall, my key messages were softness in the Canadian

economy and reduced consumer confidence. I am delighted, six months later, to report that these

trends appear to have been short-lived. In fact, while competition is as tough as ever, 2002

forecasts are pretty encouraging.

The U.S. Economy Is ReboundingCanada’s economic downturn has largely been the result of a modest American recession and

the resulting weaker demand for Canadian goods.

But indications are that key U.S. measures are now improving. Consumer confidence is up. Housing

starts remain healthy. Depleted inventories will need to be replenished. Low interest rates are forecasted

to contribute to GDP growth. And unemployment rates are expected to stay in the five to six percent

range, which should keep inflation steady.

Stronger Canadian PerformanceRelatively speaking, the Canadian economy has weathered 2001 in fairly good shape. Our GDP growth

has outperformed that of the U.S. each of the last three years. Whereas the U.S. lost one million jobs last year,

Canada created seventy-five thousand jobs. Business capital spending has held up. And housing starts have

been exceptionally strong due in large part to low lending rates. Continued low interest rate policy and the

stronger U.S. economy will no doubt foster GDP growth, which is forecasted to hit four per cent by fall.

Unemployment is expected to remain elevated at around seven percent, which should continue to keep inflation

below two percent. And if necessary, higher interest rates no doubt will be used to control inflation once the

recovery is well established.

The 62 Cent DollarOne remaining nagging issue is the strong U.S. dollar, which has diminished the value of the loonie to record

lows. This will continue to present a competitive disadvantage to any Canadian importer of U.S. goods and

raw materials. Increasingly, that includes many of us in the CPG industry.

Grocery and Drug Stores Fared BetterGrocery and drug store growth exceeded that of the Canadian economy, and retail sales generally, during 2001.

Grocery stores experienced steady real growth of four percent through the year. This was driven by Ontario in

particular, and categories such as frozen foods, health products, paper products and confectionery. Add to this

long overdue price advances in the two to three percent range. But the real success story was larger format

grocery stores with pharmacy sections, wherein drug-store style categories grew at 13% versus the year before.

Drug stores finished 2001 with flat real growth after two percent gains through the summer months. With price

inflation, however, year-end growth was between two and four percent, depending on the region.

2001 Price Advances Are OverThrough much of 2001, both the core and total Consumer Price Indices exceeded the XFET (excluding food,

energy and tax) index. This indicated increases in food prices consistent with the dollar growth noted above.

But as we head into 2002, this inflation is likely over. Fortunately, the industry has established a more

profitable base from which to discount. But real creativity and careful analysis will be needed to execute wisely.

Patrick DoddPresident

ACNielsen Canada

Continued on page 29.


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The Future of ConsumerSpendingNick Sorvillo

Senior Vice President

ACNielsen Homescan


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A Moving TargetThe history books will note 2001 as a year of great

change in the U.S. and the world. There was a new

president for the first time since 1992. Major acts of

terrorism took place on U.S. soil. The “dot-com era”

ended as quickly as it began. Recession was declared. In

the wake of all that has happened in the past 12 months,

many people have refocused their priorities and are

again learning to live one day at a time. While priorities

may have shifted, consumer perceptions continue to be a

moving target. But where are they moving? Clearly,

certain economic and political factors provide some

insight into the consumer psyche, but does that

translate into consumer spending patterns?

Since consumer spending accounts for two-thirds of

all economic activity, understanding how perceptions

influence behavior is critically important to manufactur-

ers, retailers and the government alike. Understanding

consumer behavior, however, is no easy task—especially

when you consider the many interconnected variables

that impact it.

Environmental factors, economic conditions and the

geopolitical situation are some of the biggest influencers

that impact consumer spending and shopping behavior.

But understanding overall consumer trends is just the

beginning. The heart of the matter is pinpointing how—

and more important, how much—these trends influence

the way consumers spend their hard-earned dollars.

Finding the Missing LinkCan consumer attitudes be linked to consumer behavior

and used as a future indicator? To find out, ACNielsen

combined The University of Michigan’s Consumer

Sentiment Index, which is the most widely used

sentiment tracking index in the U.S. (and a tool that

has gauged consumer attitudes for more than 50 years),

with the ACNielsen Homescan consumer panel, which

tracks a representative sample of 61,500 households

and their CPG purchase behaviors.

The analysis showed an astounding result. To a

significant degree, the Consumer Sentiment Index

and the Homescan consumer panel were linked. Nine

months after consumers stated their attitudes and

opinions on various topics including environmental and

geopolitical factors, their purchasing behaviors showed

the effects. In other words, there is a predictive relation-

ship between the Consumer Sentiment Index and

Homescan purchasing behavior [See chart 1].

Predicting the FutureSo did we create a crystal ball? Well, that may be an

overstatement. But if key causal factors could be linked

to attitudes, and in turn future consumer behavior, then

manufacturers and retailers could further understand the

connection between consumer attitudes and behavior,

which would help gauge how consumers would shop

in the months to come.

With this promising research in hand, ACNielsen

developed Consumer Pre*View, a new Homescan

service that will give clients new insight and guidance

into consumers’ likely future purchasing behavior

in food, health and beauty care and non-food

product categories.

How it WorksEach Homescan panel household represents the

“Voice of the Consumer” on views of current events

and lifestyle trends. These views are tracked quarterly

through a Consumer Pre*View survey mailed to a

representative and projectable sample across the U.S.

Topics run the gamut and range from overall consumer

sentiment, the economy, travel and buying American to

security, bio-terrorism and lifestyle changes. ACNielsen

links the attitudes and perceptions of consumers with

their actual purchasing behavior.

Change in Index of Consumer Sentiment and Consumer GoodsConsumption

Food - Drug - Nonfood(1999.Q1–2001.Q2)

chart 1: The Result: A Significant Link

-0.150

-0.100

-0.050

0.000

0.050

0.100

0.150

0.200

1999.Q1 1999.Q2 1999.Q3 1999.Q4 2000.Q1 2000.Q2 2000.Q3 2000.Q4 2001.Q1 2001.Q2

Time

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HBA (Drug) Products First Order Difference of Log (Dollar).

Food Products First Order Difference of Log (Dollar).

Non Food (General Merchandize) Products First Order Difference of Log (Dollar).

Lag 3Q Change in Index of Consumer Sentiment

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Research has found a measurable correlation (adjusted for

a time lag of nine months) between changing consumer

attitudes reported by the Consumer Sentiment Index and

their manifestation in purchases of non-durable goods.

This “advance notice” has significant strategic implica-

tions, from setting marketing priorities and production

planning to acquisition analysis and more.

And the Survey Says…The findings from the first Consumer Pre*View

survey indicate there are reasons for optimism for the

consumer packaged goods industry.* Research suggests

that consumers are planning to cut back on restaurant

dining and are more likely to buy American-made

grocery products—findings that could translate into

increased sales of certain packaged goods later this year.

Twenty-seven percent of U.S. consumers plans to dine

out for dinner less often in the next three months [See

chart 2]. Additional analysis shows that younger and

lower income consumers are more likely than others

to reduce restaurant visits.

One in three consumers have shown an increased prefer-

ence for buying American grocery products [See chart 3].

chart 2: Do you plan to dine out for dinner more often, as often, or less often during the next three months as

compared to the same time a year ago?

chart 3: (Are you) more likely, as likely, or less likely to purchase American-made grocery products

now as compared to the same time a year ago?

* The Consumer Pre*View Survey identified 76% of households as responding that they were the same or better off financially as they werea year ago, while 24% responded that they were worse off.


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Additional analysis also revealed that although all

income groups show a propensity to buy American, it is

skewed by income, with lower income households more

likely than the average household to buy American.

The good news is that the majority of consumers plan

to continue to spend the same as they have in the past

during the next three months, suggesting a belief that

the slow time is only temporary [See chart 4].

Overall, Americans continue to be optimistic about the

future. More than one-third predict they will be better

off financially a year from now, and over one-fifth

believe the U.S. economy is in for at least some good

times in the coming year [See charts 5 and 6].

Plans for the FutureLinking consumers’ current perceptions to future

purchasing is an exciting start. And it enables new

opportunities for manufacturers and retailers. Consumer

Pre*View capabilities can help answer the following

questions: How will my categories be affected in the

future? Are my categories stable to consumer sentiment?

How can I show my trading partners that consumers will

be changing their purchase behavior in my category?

Does this merger/acquisition address consumer demands

more effectively?

For the first time, a true “Voice of the Consumer”

is realized and the marketing implications, both

regionally and demographically, are far-reaching.

chart 4: In general, do you plan to spend more, about the same, or less money during the next three months as compared to the same time a year ago?

chart 5: Do you think that a year from now you and your household will be better off, worse off, or just about

the same as now financially?

chart 6: Do you think that during the next 12 months we will financially have…?


Consumer Pre*View will help you understand your

consumers’ future shopping behavior by understanding

their attitudes today. Consumer Pre*View provides a

focused review of the American consumer—their attitu-

dinal changes, the impact these sentiments have on

our economy and their ultimate effects on your busi-

ness environment.

By tying the University of Michigan’s Consumer

Sentiment Index with the gold standard ACNielsen

Homescan consumer panel, ACNielsen has established

the first-ever predictive link between consumer

attitudes and purchase behavior that holds true across

channels. And with additional custom capabilities and

modeling, you can understand consumer sentiment

and their potential behavioral impact on a category

and channel level. Consumer Pre*View gives you the

foresight necessary to positively affect your

consumers—and your bottom line. Contact your

ACNielsen representative for more information.

Who knew she would buy this?You did.


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The Category Hit Parade

Convenience. Health. Innovation. Those three

attributes characterize the fastest-growing cate-

gories of 2001 in the United States and Canada.

Todd Hale, Senior Vice President, ACNielsen Homescan,

noted, “Time-starved consumers continually look for

ways to carve out personal time during the day—from

how they shop to what they buy.” This year’s fastest-

growing categories speak to the trend, featuring products

like one-dish entrées and polish-saturated cleaning wipes.


Consumers looking for a buzz could either grab one of

the innovative malternative beverages driving alcoholic

cooler category growth, or enjoy a gum-numbing tingle

generated by one of the popular electric toothbrushes

from the oral hygiene appliance and accessory category.

Time-starved consumers hungry for a few free moments

grabbed up quick-fixing, shelf stable one-dish entrée

offerings. Events like September 11 underscored the

importance of family, giving mealtime a new dimension,

where baked goods like frozen biscuits, rolls and

muffins enhanced the comfort of hearth and home.

Inspired by the world-class athletes preparing for

Olympic competition, consumers made health-based

food choices ranging from refrigerated soy milk to

frozen shrimp to nutrition and energy bars. Once

the inside of the body was nourished, attention turned

to cosmetic issues, accelerating the sales of teeth

whitening strips (dental accessories category) and

depilatory products.

Consumers took a shine to one-step polishing

cloths that cut prep time and minimize product

storage requirements for the convenience-minded

[See chart 1].

Malternatives Brew Up SalesMalternative beverages with names like Wild Pink

Lemonade and Hooper’s Hooch barreled ahead in 2001,

leading all category velocity with a year-to-year dollar

sales increase of 133.4 percent in the cooler category.

Effervescent sales moved from $118.9 million in 2000

to an even more impressive $277.4 million in 2001.

Targeting entry level drinkers in the 21–29 year-old

segment, malternatives cornered about two percent of

the 200 million barrel beer industry according to Beer

Marketer’s Insights. Although two brands (Smirnoff Ice

and Mike’s Hard Lemonade) dominated the category

with two-thirds of sales, the competitive field is about

to get more crowded. Anheuser-Busch takes its Bacardi

Silver brand national in 2002 backed by a $60 million

campaign. Miller Brewing follows suit later this spring

with a Skyy Blue launch resourced to the tune of roughly

$40 million.

Shaking Up Refrigerated DrinksSay Soy! The big surge in the refrigerated drinks and

shakes category (up 92.4 percent, from $98.9 million in

More Retailersand Manufacturers

Sign on for Category Business

PlannerThe list of retailers and manufacturers using the web-

based Category Business Planner continues to grow.

Recent additions include Ahold, CVS, Hannaford/Kash N’

Karry, Long’s, Target, Wakefern and Walgreen’s, meaning

that this revolutionary solution for collaborative category

planning is now being used for over 33% U.S. ACV. And

the manufacturer list is growing as well.

Category Business Planner is the “one-number” system for

organizing category information. Our unique approach

supports collaboration among retailers and manufacturers,

improves efficiency and enables both client groups to

focus on growth initiatives.

If you conduct category planning with these or any of the

other retailers already using Category Business Planner,

then contact your ACNielsen representative today or visit

our website at http://acnielsen.com/CBP to see how

Category Business Planner can help you work collabora-

tively with your trading partners.


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2000 to $190.3 million in 2001) flows from two factors:

consumer health concerns and the much-improved taste

of refrigerated soy milk.

Soy drink sales overflowed in the wake of The New

England Journal of Medicine article touting the

cholesterol-lowering effects of soy. Also tuned in to

the new wave of soy drinks are the 30 to 50 million

Americans that the National Digestive Diseases

Information Clearinghouse believe are unable to

digest lactose, the primary sugar in dairy milk.

The innovative White Wave company made the bold

move of packaging soy milk in cartons and selling a

refrigerated vs. shelf-stable product when it launched the

first-ever refrigerated soy milk, Silk, in 1996. They also

managed to eliminate the “beany” taste and feature

sweeteners and flavorings. In fact, popular flavors like

eggnog have enabled White Wave Silk to capture 68

percent of category sales.

Stocking Up on Shelf Stable EntréesBetween the ongoing recession and the war on terrorism,

families are turning inward for comfort and compatibility.

Shelf stable entrées represent the perfect compromise

between a home-cooked meal and the convenience of

takeout or dining out.

This one-dish, quick-fixing meal category expanded

by more than 83 percent in 2001, with sales of $140.8

million vs. year 2000 performance of $76.8 million.

Many of the entrées feature comfort goods like lasagna

or chicken and dumplings and, like category leader

Banquet Homestyle Bakes, require approximately five

minutes to prepare and 35 minutes or so to bake.

Dental Accessories a Bright SpotInventive teeth whitening products like Crest Whitestrips

and whitening toothpastes like Colgate’s Fresh

Confidence are giving retailers something to smile

about. Once the exclusive domain of dentists, the

consumer packaged goods industry has taken a $253

million bite out of the teeth whitening market.

Category sales velocity is dazzling, approaching 80

percent with no deceleration in sight, as Baby Boomers

look to lighten aging teeth. For those interested in a

double benefit, Rembrandt Plus Whitening mouth rinse

claims to whiten teeth by as much as 27 percent while

reducing the growth of bacteria in the mouth for up

to two hours. Drug stores have been the primary benefi-

ciary of the toothsome trend, outselling food formats by

three to one in the dental accessory category.

Frozen Bakery Gets CookingThe Pillsbury Dough Boy grabbed a parka and skated

from the refrigerator to the freezer section, arriving with

Home Baked Classics like biscuits, sweet rolls, cookies

and dinner rolls in hand. Frozen bakery sales are heating

up, rising to $149.4 million in 2001, a 58.6 percent

increase over prior year sales of $94.2 million.

Until now, refrigerated bakery manufacturers had given

the frozen section the cold shoulder. However, the

perceived quality edge of frozen baked goods, and the

convenience of resealable bags that let consumers make

as few or as many treats as they want, has caused a

thaw in that outlook.

Oral Hygiene Category Cleans UpPower toothbrushes are having an electrifying impact

on the oral hygiene category, which posted double-digit

growth (47.5 percent) for the second year running in the

U.S. Canada gave the toothbrushes a whirl as well in

2001, to the tune of CDN$68 million, for a 71 percent

growth rate. The Crest Spin Brush dominates a $244.5

million category bristling with potential.

source: ACNielsen Strategic PlannerTotal U.S.—food, drug and mass, excluding Wal-Mart.Based on dollar sales >$100 million, 52 weeks ending December 29, 2001.

Remaining Coolers 133.4 277,431,947Remaining Ref Drinks & Shakes 92.4 190,291,037Shelf Stable Entrées 83.4 140,748,021Dental Accessories 78.9 252,996,121Frozen Biscuits/Rolls/Muffins 58.6 149,365,791Oral Hygiene Appliance & Accessory 47.5 244,485,249

Polishing/Cleaning Cloth 47.1 227,686,566Energy Bars 40.5 405,020,281Women’s Depilatories 38.2 139,279,942Unbreaded Frozen Shrimp 35.9 481,272,511

2001 2001Dollar Sales Dollar Sales

Growth

chart 1: U.S. Top 10 Fastest Growing Categories


While consumers have always known that power brushes

do a better job cleaning, the $80+ price points were

daunting. Technology breakthroughs have changed that

paradigm, and inexpensive electric toothbrushes like the

Colgate Actibrush or the Johnson & Johnson Reach

Power toothbrush can be purchased for less than $20. A

maturing population faced with impending periodontal

disease is sweeping the power toothbrush shelves clean.

Cleaning Wipes Grab MomentumThe days of the rag bag and greasy bottles of oil and

polish are gone. Enter the all-in-one replacement prod-

ucts with names like P&G’s Swiffer and S.C. Johnson’s

Pledge Grab-It, Pledge Wipes and Old English Wipes.

Polishing cloth wipes mopped up last year, nearing the

50 percent growth mark with dollar sales of $227.7 million.

Consumers were floored when Swiffer made its debut—a

disposable cloth that looked like a dryer sheet and acted

like a dust magnet. Next in line were the all-in-one

mops, Swiffer Wet Jet and Clorox Ready Mop. The idea

is catching on and shifting position in the home, from

floor to furniture to window and mirror wipes.

“You’ll find successful consumer products at the inter-

section of convenience and innovation, with rapid

consumer take-up of new technologies that simplify

their lives,” added Hale.

Healthy Sales for Nutrition BarsSnack bars have energized the health bar category,

fueling 2001 sales of $405 million, a 40.5 percent

annual increase. Functional foods like energy bars and

beverages have worked out in the Canadian marketplace

as well, where offerings by Adams, Gatorade, Kraft and

Nestlé accounted for 38% category expansion to

CDN$25.8 million.

Celebrity endorsements, a la the PowerBar/Lance

Armstrong relationship, continue to invigorate the

market, resonating with consumer values like health,

energy and well-being. The Carb Solutions snack bar is

taking a bite out of Power Bar’s category lead, gaining

slipstream momentum.

Smooth Sailing for DepilatoriesFans of infomercials are familiar with the entrepreneurial

tale of Sue Ismiel, creator of the translucent green goo

known as Aussie Nad’s depilatory for women. Once the

exclusive province of expensive salons, thanks to Nad’s,

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Nair, Sally Hansen and Epil-Stop, the bladeless hair

removal category has relocated to the homefront.

Lower cost treatments have conquered longstanding barri-

ers to use such as unpleasant odors and chemical and heat-

related burns, igniting category sales to unprecedented levels

at $139.3 million with an incendiary growth rate of 38.2

percent. Watch for additional expansion when new prod-

ucts based on the first-ever leave-on NAC Depilatory

Technology developed by Procter & Gamble hit the market.

Jumbo Sales for ShrimpThere’s nothing small about the 35.9 percent annual

increase in unbreaded frozen shrimp sales. Awash in

shrimp from Far East markets like Vietnam, the average

price per pound dropped by $0.54 in 2001, leaving in

its wake inflated category sales of $481.3 million.

Canadian WinnersSo close geographically, and yet so far apart in tastes and

trends. Canada’s Top 10 fastest-growing category list for

2001 shares just two entries with the U.S. version—elec-

tric toothbrushes and energy bars. Potential reasons for

the variances may be chalked up to different economic

conditions and consumer preferences [See chart 2].

What did hold true for both countries were the predomi-

nant themes of convenience, health and innovation.

Spot removers left their mark as the fastest growing


(89 percent) category of the year at CDN$16.6 million.

Electric toothbrushes spun into second place at CDN$68

million, a 71 percent per annum rate. Diet meal replace-

ments and dietary aids, a CDN$46.3 million category, fat-

tened up 63 percent by shrinking client waistlines.

Prepackaged frozen meat like lamb and chicken legs

(CDN$31.4 million) shared the number four spot with

razors (CDN$26.9 million), icing out other categories with

a 43 percent annual expansion figure. Energy bars and

drinks, the second of two categories common to the U.S.

and Canadian fastest-growing category lists, ranked fifth

along with disposable cutlery, which carved out respective

dollar sales of CDN$25.8 million and CDN$11.1 million.

Concerns regarding municipal water sources, spurred by

highly publicized e-coli deaths in Walkerton, contributed to

bottled still water sales of CDN$230 million, for a 36 per-

cent growth rate.

Aromatherapy as child’s play characterizes the CDN$11.4

million children’s bath additives category, which gently

eased into the number seven slot at a 35 percent pace.

Self-rising crusts like Kraft Delissio Rising Crust inflated

the frozen and refrigerated pizza category by 32 percent,

with total sales of CDN$291 million.

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In other top categories, creative breath freshening strips

(Listerine Cool Mint Pocket Pack Strips) spelled sweet suc-

cess for the mini-mint category, capturing CDN$28.4 mil-

lion in sales. Beef jerky paced that increase at 31 percent,

with revenues of CDN$21.4 million.

Completing the list on a healthy note, creaking joints got

some relief from glucosamine sales of CDN$43.6 million.

The herbal arthritis pain remedy eased joint pain for

weekend warriors and contributed to some very robust

bottom lines.

The lesson for marketers: consumers are quick to adopt

new products, even those that break new ground or deploy

radical technologies, if the products contribute to their

emotional and physical well-being and deliver on the

promised benefit.

Business Tools forConsumer Behavior

Understanding the liquor category purchaser

The Homescan consumer panel in Canada has expanded category coverage to deliver insights to the liquor industry.

As retailer and manufacturer sophistication has grown in thisindustry, the implementation of category management practiceshas driven the need for fact-based consumer information.ACNielsen is now able to fulfill this need by providing insightinto Canadians’ liquor cabinets through such analyses as:

• Consumer purchasing behaviour• Consumer loyalty and cross purchasing of brands or segments• Demographic characteristics of brand and segment consumers• Identifying key consumer groups based on volume purchased

or brand loyalty.

Beyond liquor category marketers, this information will alsoallow cross category analyses within traditional packagedgoods beverage categories such as juices and drinks andflavoured soft drinks to help further understand household purchase drivers.

For more information contact Sharon Skurnac [email protected]

Available in Canada only

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

chart 2: Canada Top 10 Fastest Growing Categories

Category 2001 Dollar 2001 Dollar Similar to Growth Sales Growth Sales U.S. Findings Driver

Spot Removers +89 $16,548,444 No InnovationElectric Toothbrush +71 $68,048,364 Yes InnovationDiet Meal Replacements/DietaryAids

+63 $46,346,379 No Health/Innovation

Remaining Frozen Meat +43 $31,357,215 No ConvenienceRazors +43 $26,889,354 No InnovationEnergy Bars & Drinks +38 $25,750,809 Yes HealthDisposable Cutlery +38 $11,141,117 No ConvenienceBottled Still Water +36 $230,565,909 No HealthChildren’s Bath Additives +35 $11,465,828 No Health/InnovationFrozen &

+32 $290,710,327 NoInnovation/

Refrigerated Pizza Convenience

Home Dry -60 $4,810,005 – –Cleaning Systems*

Source: ACNielsen Canada, MarketTrack.National—All Channel (total grocery, drug, mass, warehouse club and general merchandiser).Based on dollar sales >CDN$10 million, 52 Weeks to December 29, 2001.

*This was one of the fastest growing products in 2000. The category has dropped dramatically in 2001.


Using Panels to Understand the Consumer Ken Greenberg, Vice President, Marketing, ACNielsen Homescan

The Consumer Is KingUnderstanding consumers and what drives their purchasing behavior is one of the most basic building blocks for

developing a successful marketing strategy. The diagnostic tool that provides this powerful information is house-

hold panel data. Panel information, unlike scanning data, is used to explain the reasons behind period-to-period

volume changes.

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This overview of how consumer panel information can

be used in a marketing plan is intended to help you use

panel data to the fullest potential. This article will

address: the definition of household panel data; the dif-

ferences between scanning data and panel data; the key

components of panel data that allow you to analyze and

understand volumetric data; and the basic behavioral

measures that consumer panel data delivers.

What Is a Household Panel?Household panel data is collected after each panelist

shopping trip. Members of the panel record their

purchases, capturing not only what is

purchased, but also where the purchase

was made (store or channel), and

whether the purchases were the

results of a promotional deal. This

purchase information is then tied

back to the general demographics of

the household.

Household panel data allows

marketers to measure the ongoing

purchase habits and practices of

household and demographic groups.

Tracking and analyzing this

information over time can

reveal the dynamics of

consumer purchasing—such as who is

buying your product, how often they buy, the

competitive products your buyers are also purchasing,

and whether buyers are deal sensitive. Panel data quanti-

fies the composition of category or brand volume, which

can then be used to identify the appropriate marketing

strategies to drive growth or defend against competitive

actions. Key issues such as consumer purchase behavior,

shopping habits, demographics, attitudes and opinions

are critical elements the panel can deliver.

Panel data quantifies thecomposition of category

or brand volume.

The ACNielsen Homescan consumer panel of 61,500

households collects consumer shopping and purchase

data from all outlet channels, including grocery, drug,

mass and convenience stores. The panel is geographically

dispersed and is demographically balanced so the sample

profile matches the U.S. population as closely as

possible. The panel data is also projected to U.S.-based

Census estimates that are updated regularly to reflect

population changes. The Homescan panel is considered

by some as the industry gold standard due to its long-

standing reputation in the marketplace and its utilization

of revolutionary hand-held technology that changed the

face of household panel data collection.

Each household in the Homescan panel collects purchase

information on each shopping trip. For each shopping

trip, the following data is recorded:

• Date of purchase

• Age and sex of primary and

secondary shopper

• Store name

• Usage of frequent shopper cards

• Complete item description through

UPC dictionary

• For each UPC, the number of units,

price paid, and deals used

• Dealing—specified by the panelist as

manufacturer coupon, store coupon,

store sale, or other

• Source of the coupon—at home, at

the register, elsewhere in the store

• Total shopping trip purchase amount

• Method of payment—cash, check, credit card, or

debit card

What Is the Difference Between Panel Dataand Scan Data?Scan data is collected at the store point of sale and is the

most accurate source of volumetric and or share infor-

mation. It addresses the “what happened in the store”

questions such as sales volume and share, price, and

retail trade support.

Panel data is used to understand the reasons behind

volume/share levels and trends. It answers such key

questions as:

• Who are your buyers?

• How often do they buy?

• Where do they shop?

• Are they loyal to your brand?

• How do they respond to your marketing efforts?


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Sometimes, marketers question the quality of household

panel data when they try to reconcile it with store-scan-

ning data. There is the perception that the volumetric

data from each source should be the same. However,

panel data and store data are not always equal because

measurement methodologies differ. Store-level data

records millions of shopping transactions while panel

data records a specific group of shoppers. In addition,

panel data only represents household-based purchases,

so there are no small businesses or civic organizations

included in the panel.

The bottom line is that both types of information have

their uses, and by combining the two, marketers have

been able to quantify the composition of volume,

understand the reasons behind volume changes, reveal

the dynamics of consumer purchasing, and identify

appropriate sales and marketing strategies.

Store-level scanning data can tell you that your sales

were down in 2001. Panel data will provide you with

information telling you whether you lost volume due to

fewer buyers or if your buyers purchased less. Panel data

also gives you information on which competitors you

lost volume to.

The Key Measures There are a number of basic terms that are used in

household panel data—penetration, buying rate, pur-

chase frequency, and purchase size. Brand or category

volume is a function of the number of households which

make a purchase (penetration) and the quantity that they

purchase (buying rate). Buying rate is a function of pur-

chase frequency (occasions per buying household) and

purchase size (quantity per occasion).

Volume = # of Buying Households x Quantity Purchased(% Penetration) (Buying Rate)

Buying Rate = # of Purchase Occasions x Quantity per Occasion(Purchase Frequency) (Purchase Size)


Scan Data Panel Data

What happened Who and why it in store happened

Sales Volume Shopping Frequency

Share Buyer Demographics

Price Store Type Shopped

“sales were down “volume was lost in 2001” due to fewer buyers

age 18–34”

New Wal-Mart ChannelReceiving Broad ClientAcceptanceReleased in October of 2001, ACNielsen’s new Wal-Mart Channel offering is now accepted by the majorityof our top manufacturer clients. Retailers are alsoembracing the data and finding significant value in thenew service with robust availability of their key com-petitor’s data never available to them before.

With the granularity of information provided, such asfull category views and private label detail, and ease ofdata use through custom Wal-Mart channel templates,both manufacturer and retailer excitement has grownat a quick pace. Many retail clients are integrating theWal-Mart Channel data as part of their category man-agement process and are endorsing the use ofACNielsen’s Wal-Mart Channel data.The end resulthas been the collaborative use of data by both themanufacturer and retail communities.

The true competitive advantage for this new service isthe gold standard ACNielsen Homescan consumerpanel foundation. ACNielsen’s households have alwaysprovided price and causal level detail with 80% of theHomescan prices identically matching the scan price(90% within 10% of scan price). Over 90% of thesesame Homescan panelists shop in over 90% of Wal-Mart stores—maintaining ACNielsen’s advantage inleading measurement of C and D counties where Wal-Mart locates the majority of its stores.

Striving to continue the world-class coverage of Wal-Mart consumers, ACNielsen is adding 6,500households, predominantly in the South and Southwestregions of the country. This expansion allows the Wal-Mart Channel Service reporting to expand fromthe Total U.S. and Four-way Census region reporting(total Wal-Mart, discount and supercenter) availabletoday, to more granular Nine-way Census divisionviews by the second quarter of this year.

ACNielsen’s Wal-Mart Channel tool assists both manu-facturers and retailers in driving strategic businessanalyses and decisions. Clients interested in benefitingfrom this new service should contact their ACNielsenrepresentative for more details.


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Use Homescan CategoryManagement✽Insights for Strategic Category Planning

The challenge in today’s world is not in obtaining more information, but rather in finding how to measure, how to interpret, and how to effectivelyimplement against the analyses.

ACNielsen Homescan Category Management✽Insightstakes an innovative approach to strategic planning andsolving category management issues. Using data fromindustry-recognized ACNielsen Homescan applications,the seamless Category Management✽Insights databasecan help you define your strategy and build your cate-gory management process.

Category Management✽Insights has captured the attention of manufacturers and retailers alike. Using a powerful template set, you can gain insights fromconsumer shopping behavior to develop corporate, category and brand strategies. Uncover the importanceof individual product categories to a specific chain.Pinpoint which categories appeal to existing customersand/or target consumers. Or find the categories thatcan be used to build loyalty and/or frequency.

Release date: May 2002

The Patient Speaks with the HomescanRx/OTC Panel

Announcing a major breakthrough in prescription medication marketing information—the HomescanRx/OTC Panel helps you understand the Rx/OTC (prescription/over-the-counter) connection. Through overa dozen client interviews, ACNielsen uncovered the keyknowledge gaps in the industry and designed a servicethat can uniquely fill these voids.

The Homescan Rx/OTC Panel focuses on the consumerand provides first-ever insights into consumer householdand individual behavior for Rx and OTC products.Homescan consumer insights will drive business growthby helping Rx and OTC medication manufacturers andretailers to understand:

• Dual usage and replacement decisions for OTC and Rx• Compliance and persistence of usage• Effectiveness of Rx marketing efforts directed

at consumers• Ailments being treated (for products with

multiple indications)• Source of volume for OTC switch products

The new service is being launched in three phases. Phase1, available in May 2002, is the Homescan HealthcareSurvey. The survey provides consumer insights into prescription drug usage, ailments treated, and Rx/OTCbrand interaction from over 100,000 individual respondents of all ages.

Phase 2, available in Q2 2002, is the HomescanRx/OTC Panel. The panel is a nationally representativesample of 5,000 U.S. households/12,000 individuals whoscan all of their Rx and OTC purchases on a longitudinalbasis, covering 23 ailments and 200 drugs. Phase 3 is the expansion of this sample in Q4 2003 to 15,000households and the conversion from a paper codebook collection technique to a new scanner with onboard codebook.

The Homescan Rx/OTC Panel helps you to:

• Identify potential for increased sales at the patient level.• Provide insight into how that potential can be achieved.• Track success in exploiting that potential.

For more information on the Homescan Rx/OTC Paneland for charter member opportunities, contact MeredithSpector at [email protected].


Business Tools forConsumer Behavior

Available in U.S. only


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Test Marketing Plugs Into

the Internet

When does a virtual experience beat reality hands

down? When it involves new product or con-

cept testing. With the advent of the Internet,

simulated test marketing has kicked things up another

notch—replacing mall intercept and phone feedback with

an online respondent community.

Test marketing affords companies the opportunity to prove-

up concepts and tweak packaging and advertising presenta-

tions while tightening sales and profit forecasts. In addition

to acquiring valuable customer feedback, test markets

present the chance to observe potential impacts on the

entire product line, such as cannibalization, and can be

used to assess the reaction of the sales force, retailers

and distributors to the new product.

Taking Their MeasureWithin the world of test marketing, an entire portfolio

of techniques is available to marketers:

• Standard test markets. Actual launches in smaller

markets including sell-in to the trade and complete

marketing support.

Rating: best possible read of the market at the highest

possible cost with the longest execution time. Open to

competitive attack.

Jim Miller, Senior Vice President

Sheila Lundy, Vice President, Field Services

ACNielsen BASES


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• Controlled test markets. Comprises a panel of stores

with good geographic dispersion that carry new prod-

ucts controlling for facings, displays, POP promotions

and pricing. Conducted by companies such as Market

Decisions.

Rating: provides accurate barometer of trade reception.

Great for evaluating environmental issues like unusual

shelving requirements. Affordable. Minimizes exposure

if product fails. Requires sell-in.

• Simulated test markets. Consumers use seed money to

buy new items in a laboratory store and researchers

follow up. Consumers recruited at malls react to

product and promotional concepts, then provide

feedback via traditional survey methods. Electronic

panelists sample products at home, review concepts

and promotions online, then provide feedback via

traditional survey methods.

Rating: Lowest execution costs. Fastest feedback.

No finished packaging or advertising requirements.

Minimal security issues. High degree of accuracy.

Share vs. SalesThere are many classic debates in marketing, and the

comparative strength of share vs. unit-based forecasting

is one of them. This debate was especially prevalent

during the early days of simulated test markets. Share is

a powerful metric, but ultimately must be translated into

volume estimates for production and pro forma financial

statement purposes. One area of vulnerability for share

data relates to truly new products or categories.

Take the case of a new product that spans two cate-

gories, such as the first combination shampoo/conditioner.

Which category multiplier should be applied to convert

share into an accurate volumetric prediction? Good

question, and in the case of radically new products,

there is no definitive answer.

Volumetrics Speak VolumesThis unit vs. share dilemma was one of the reasons that

led to the development of the BASES simulated test

approach in the late 1970s. BASES yields a two year

volume number rather than a market share estimate.

Tapping into the average American mindset, BASES

recruits respondents at shopping malls, then shows them

concept boards and preliminary packaging ideas to gather

feedback early in the new product development process.

Underlying it all is a simple premise: ask consumers what

they plan to do and they’ll tell you. Although people

never do exactly what they say, they always do something

related to their claim. In a matched comparison of more

than 800 cases, BASES volume estimates fell within +/-20

percent of actual in-market results nine out of ten times.

Worldwide, the BASES model has been applied success-

fully to more than 28,000 new product concepts from

food and beverage to household items, personal care,

over-the-counter drugs, pet products and other consumer

packaged goods ideas. Today, BASES holds a 60 percent

global share of all simulated test marketing for consumer

packaged goods.

Seismic ChangesTwo concurrent circumstances converged to permanently

alter the BASES approach to simulated test marketing.

First, mall traffic, the source of consumer input to the

BASES models, plummeted from an average of 30 com-

pleted questionnaires per location per day in the 1970s

to a mere five a day by the 1990s.

Eighty percent of shoppers diligently avoided recruitment

and fully one-third of those who did qualify refused to

participate, boosting administrative costs and causing

timing delays. When queried, it turned out that time-

stressed consumers wanted to participate in research,

but on their own terms and in their own time.

Second, the Internet gained a foothold in American

households, thanks to the proliferation of personal

computers and low-cost Internet service providers.

Putting the two trends together, BASES explored the

idea of operating an electronic panel (e-Panel) which

recruited respondents from the virtual society.

Proof of ConceptBASES spent more than $1 million developing and

testing the e-Panel concept to ensure forecasting accuracy

and equivalency with the mall-based historical archives.

There were many questions to resolve: Could a

demographically matched panel be assembled? Would

cooperation rates differ? Would mall and e-Panelist

responses be similar?


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The Online CommunityAfter screening for issues like employment sensitivities

and demographic markers, eligible respondents complete

a test questionnaire prior to going live with a study. This

allows BASES to sync up results and match with the cur-

rent panel.

To keep respondents engaged, and build a sense of com-

munity, BASES personalized the panel, gave it a name

(PineCone Research) and a facilitator who serves as

its voice (Karen Scott), and posted interesting editorial

content on a dedicated web site (The Treehouse). The

typical panelist gets tapped for a survey once every

three to four weeks.

Who Are These People?As with most longitudinal panels, the granularity

of respondent information on the BASES e-Panel is

impressive. It includes media usage, shopping habits,

As Chart 1 illustrates, the initial investigation showed

that wired panelists were virtually indistinguishable from

the mall recruits. The panelist profile is practically

identical on important criteria such as household

size, average age, employment, race, gender and

education levels.

To validate e-Panel, BASES conducted more than 100

parallel tests over three years, representing a broad

spectrum of categories. Clients were so intrigued by the

potential of the Internet as a simulated test marketing

tool, they volunteered concepts for methodology

prove-up tests and anted up dollars to support

validation checks. A critical finding emerged from

the verification effort: as suspected, the key survey

measures for the e-Panel and mall tests were highly

correlated and the system showed very strong test/retest

reliability [See chart 2].

chart 1Panel Consumption

source: ACNielsen BASES

Mall Internet PanelTests Tests Members

Household Size 2.8 2.9 3.0Average Age 40.5 39.2 37.2Employed 71% 72% 69%Caucasian 86% 88% 89%Male 20% 21% 15%College Educated 40% 43% 46%

chart 2Correlation Coefficients

Mall/ Test/Internet Retest

Purchase Intent .86 .94Frequency .94 .97Liking .85 .91Price/Value .90 .99Uniqueness .91 .99

source: ACNielsen BASES


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pets and appliances. It covers chronic ailments such

as allergies and acid indigestion. It tracks promotion,

media and shopping habits including coupon use and

preferred retail channels.

Every e-Panelist is also Spectra-coded, enabling clients

to incorporate lifestage and lifestyle information into

their analyses for a holistic view of the marketplace

when making tactical decisions about couponing,

media and distribution.

How It WorksEach e-Panel study begins with outbound letters to

selected participants containing a log-in password, in

parallel with e-mail reminders. Panelists respond to a

survey online for a $5 incentive that is mailed prior to

the interview. Product samples are delivered directly to

the home. While a bevy of incentive opportunities were

investigated, a cash incentive won hands down by an

overwhelming 65% margin.

The Net TakeNow fully operational, e-Panel has been rated a

resounding success by clients for its robust capabilities,

equivalent forecasting accuracy, richer open-ended

questions and brand claim capability. On average,

e-Panel yields savings of 20% per study, lower ancillary

costs for concept boards and product shipment, and an

accelerated execution time that cuts one full week

off the mall production schedule.

An unexpected benefit of the e-Panel was the unfettered

honesty of answers. Respondents proved less restrained

in expressing dislikes via the impartial computer as

opposed to discussing dislikes with an interviewer.

BASES intends to pace technology advancements and

continuously enhance its e-Panel offering. Plans are

already in the works to introduce video testing in the

first quarter of 2002 and to grow the panel to 90,000

participants. As personal digital assistants, RIM devices

like Blackberry, and cell phones go mainstream, wireless

networks may represent the next simulation frontier.


ACNielsen Homescan syndicated category

management applications including ACNielsen

Homescan Consumer✽Facts, Channel✽Facts, Account

Shopper Profiler and Cross Outlet✽Facts, are now

available for Calendar 2001 Data✝.

These Excel template applications deliver national,

regional, local market and account level measurement

of hundreds of retail accounts, with

demographic and behavioral profiles of core

and occasional shoppers, representing more

consumer shopping trips than any other

household-based tool.

You simply cannot find a more complete and

accurate look at consumer shopping behavior

across all channels. Contact your ACNielsen

account representative to see how Homescan

syndicated category management applications

will help you manage your business.

You simply cannot find a better view of your shopperGet Your Updated Category Management Applications Now!

✝ Release dates: Consumer✽Facts, Channel✽Facts and Account Shopper Profiler—End of March, 2002; Cross Outlet✽Facts—End of April, 2002.


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T r e n d W a t c h :Relieving pressure at the front of the store

Retailers have helped find innovative ways to make the

shopping experience more convenient and enjoyable

for customers by implementing self-checkout lanes,

line busting and mobile point-of-sale stations. And while their

ultimate goal is to increase customer satisfaction and loyalty,

along the way, there are also many potential business gains

for the retailer—higher profits, improved inventory and reduced

labor costs, as well as a competitive edge.

Self-Checkout: Mutually BeneficialA recent Harris Interactive survey reported that 35% of

shoppers said their supermarket did not have enough cashiers

on duty when they shopped. Despite many retailers’ best efforts,

the consumer perception is that that there are not enough lanes

open in the average store, which is a source of frustration.


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Make plans to attend ACNielsen's CategoryMasters Conference on August 19�22, 2002 atThe Century Plaza Hotel & Spa in Los Angeles,California.

Plan now to join hundreds of representatives from

the industry�s top retail and consumer packaged

goods companies at Category Masters, the

premier industry event to learn and exchange

knowledge on consumer-focused category

management business processes.

Through workshops, presentations and

networking, you will gain the tools to convert

your conference experience into solutions that

will impact your organization.

A Category Masters conference brochure and

registration form will be mailed to you this

coming May. Conference registration will also

be available on the Internet beginning in June at

http://categorymasters.com.

We hope to see you at Category Masters!

Make Plans To Attend

Category Masters�

August 19�22, 2002

The Century Plaza Hotel & Spa

Los Angeles, California

C AT E G O RY

MA S T E R S

C AT E G O RY

MA S T E R S

For this reason, many grocery retailers have embraced the concept

of self-checkout. Customers check out their own grocery items via

a scanning and weighing system. The item is scanned and once

placed in the grocery bag, it is weighed as an extra measure to

validate that it is the same item, thus acting as a theft deterrent.

The customer can then pay via credit card or cash. The technology

itself is not new, but more retailers are testing and putting the

application to work.

Although retailers are still in testing phases with this technology,

there are benefits for them if the concept becomes widespread.

For one, retailers can lower their front-end labor costs. During the

self-checkout experience, if the customer needs assistance, there is

an employee on staff to help out, but that same employee now

minds four checkouts instead of one.

Are self-checkout lanes faster than retailer-staffed lanes? Studies

have shown that, in the stores where self-checkout is offered, the

process itself is not actually saving consumers time. The system is

said to work extremely well with small to medium size grocery

loads, but is not yet ideal for the large order.

However, the consumer perception seems to be that customers get

out of the store quicker (and are therefore more satisfied) because

they have more control over their shopping and checkout experi-

ence. Customers feel like they’re contributing to their checkout

process, not just waiting passively or browsing through the latest

tabloid. In addition, some consumers—such as elderly customers

and those concerned with protecting their privacy—also report

liking self-checkouts because they can control the pace of the

process and their privacy concerns are minimized.

By giving customers more choices, these retailers are creating

convenience and satisfaction. Consumers are busier than ever and

retailers are more labor constrained. These front-end solutions

address both issues—retailers can have more lanes open so lines

are less backed up, and the employees are more freed up to focus

on other areas of the store like bakery, deli and floral, thus

improving customer service.

Mobility and Flexibility Help at the Front EndSpecialty and mass merchandise retailers are also finding ways to

squelch customer dissatisfaction by interrupting long lines at the

checkout. Line busting, or queue busting, is the latest answer to

backed-up lines and slow checkout processes. Retailers are taking

different approaches to line busting, such as scanning the

customer’s items while in line, so all they do is pay when they

get to the cashier, or checking them out on the spot with magnetic

card readers and mobile receipt printers. Line busting is also a


SAVE THE DATE!


S e e A C N i e l s e n a t t h e s eu p c o m i n g i n d u s t r y e v e n t s .

May 2–3Institute for International Research PrivateLabel Impact ConferenceChicago, ILFeatured speaker: Gail Zielinski, AccountDirector, Homescan Consumer Insights,ACNielsen, will present on private label trends.

May 13–14CMS Client Conference Asheville, NCFeatured speaker: Joe Bucherer,VP, ClientPrincipal Southeast, KnowledgeWorks™

Analytics Practice, ACNielsen, will present on effective consumer promotions.

May 20–21Institute for International ResearchIntegrated Promotions ConferenceNew York, NYFeatured speaker: Ann Marie Dumais,VP,Integrated Marketing,VNU Entertainment,will present a series of online/offline marketing case studies.

Upcoming Industry Events

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April 11Retail Merchandiser/Progressive Grocer Store Specific Merchandising & Marketing Conference Orlando, FL Featured speaker: Ken Greenberg,VP,Homescan Marketing, ACNielsen,presents on the Hispanic market.

April 22Consumer Pak 2002Scottsdale, AZFeatured speaker: Ken Greenberg,VP,Homescan Marketing, ACNielsen,will be co-presenting along with theCultural Access Group.

April 23National Frozen & RefrigeratedFoods Association—Retail ExecutiveConference Tempe,AZFeatured speaker: Ken Greenberg,VP,Homescan Marketing, ACNielsen,will be co-presenting along with theCultural Access Group.


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dConsumer Panel Data continued from page 18.

Let’s take a look at each of these terms individually.

Penetration is determined by the number of households

purchasing the product at least once during the time

period. For example, if there are 10,000 households, and

5,000 households purchase Brand X at least once, then

Brand X’s penetration is 50%.

The buying rate is the average volume purchased by

buyers during the given time period. As an example, If

500 households purchase 3,000 units of Brand X, the

buying rate is 6 units.

Purchase frequency is the average number of times each

buyer purchases the brand during the time period. For

example, if during the given time period, 1,600 purchase

occasions are made by 500 buying households, Brand

X’s purchase frequency is 3.2.

Purchase size is the average product volume purchased

each time the product is bought. For example, if 3,000

total units were purchased on 1,600 separate occasions,

Brand X’s purchase size is 1.9 units.

The major benefit that consumer panels provide is feedback

on the direction of your marketing strategies. For example,

if you find that the penetration of your product is falling or

is below competitive penetration rates, you can increase

penetration with advertising, brand extensions, couponing,

trial packs, product sampling and displays.

A decline or deficiency in purchase frequency can be

addressed with smaller package sizes, couponing, displays,

in-pack/on-pack promotions, and sweepstakes/contests. If

you need to increase the purchase size, marketing tactics

like two-for-one deals, bonus packs, trade deals, and larger

packages will address this issue.

Behavioral MeasuresIn addition, panels offer the capability of measuring

key behavioral activity that also influences sales. These

measures are deal propensity, repeat rate, purchase cycle

and loyalty.

Deal Propensity is the percentage of Brand X volume sold

that a panelist reported, “on deal.” Deals can represent

manufacturer coupons, store coupons, store deals or other

deals. For example, if 5,000 units purchased were reported

as “on deal” out of a total volume sold of 20,000 units,

then 25% of Brand X sales are “on deal.”

Repeat rate is the percentage of buyers that make two or

more purchases during a given time period. This is a very

important measure when introducing a new product. If

Brand X has 10,500 total buyers and 3,500 of those buy-

ers have purchased Brand X at least twice, the repeat rate

for Brand X is 33%.

Purchase cycle among repeat buyers is another key behav-

ioral measure. It is often confused with purchase frequency.

However, purchase cycle only considers the number of pur-

chase occasions among repeat buyers, while purchase fre-

quency considers the number of purchase occasions among

all buyers, including one-time buyers who have a frequency

of 1.0. Purchase cycle is expressed in number of days and

gives a feel for the consumer usage rate of your product.

Brand loyalty is another important behavioral measure. It

represents the percentage of category volume purchases

among item buyers who are satisfied by that item. This

important diagnostic measure is frequently included as a

key business objective in growing brand volume. Loyalty

rates are calculated by dividing the brand volume pur-

chased by the total category volume purchased among

Brand X buyers. For example, if a Brand X buyer purchas-

es 10 units of Brand X out of a total category purchase of

20 units, that buyer is 50% loyal to Brand X.

There are a number of additional factors—including cate-

gory purchase frequency, time period purchased, number

of competitive items and penetration strategies—that

impact loyalty. Low frequency categories tend to have high

brand loyalty numbers because of the many one-time buy-

ers. Shorter time periods show higher loyalty because there

is not enough time to observe switching behavior. Fewer

competitive items generally lead to higher loyalty, as there

is less opportunity for switching. And differing penetration

strategies may affect loyalty as some households take

advantage of promotions and offers. For these reasons, it is

best to look at loyalty on an annual basis.

Household panel data provides an excellent complement to

store-level scanning data. Scanning data provides you with

key measures of what happened to your business—sales

up or down, share up or down. Household panels, on the

other hand, help complete the picture of the consumer’s

behavior—giving the “why behind the buy.” Why did sales

increase? To which competitor did my brand lose share?

What caused my sales to decline—purchase frequency or

purchase size? Most important, household panel data pro-

vides a strong direction for manufacturers and retailers to

develop their marketing strategies.


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Business Tools forCustom Research

Online Focus Groups Provide Advantages

ACNielsen Custom Research provides qualitative research in an online environment. This revolutionary alternative to traditional focus groups has many advantages.It has no geographic limitations, and online participation ismore convenient for panelists. Online research allows for useof dynamic multi-media presentations methods. And theanonymity and individual nature of the research elicits morecandid responses, uninfluenced by group dynamics.

Uses and MethodologyOnline focus groups can be used for concept testing; imagetesting for products, websites or advertising; consumer feed-back; and more. People are invited—most often by e-mail ortelephone—to participate in an online session, and are thenprovided with instructions on how and when to “sign in.”An ACNielsen Custom Research Consultant moderates thediscussion by posing questions, requesting clarification andencouraging participant interaction. Clients can observe anddirect the moderator to probe further on specific issues.

For more information, contact Tim Hodapp [email protected].

Conduct Reliable Survey Research

The ACNielsen Family Shopper Omnibus provides CPG manufacturers, retailers and their advertising agencies with an efficient way to conduct reliable survey research amongprincipal household shoppers. The service delivers economiesof scale through multi-client participation with customizedproprietary questions. Telephone interviews are conductedquarterly in February, May, August and November, among arandomly selected sample of 2,000 nationally representativeprincipal household shoppers.

The ACNielsen Family Shopper Omnibus is a useful tool forunderstanding the following:

• How attitudes and motivations for products and servicesvary by key demographic groups

• Attitudes and awareness factors affecting purchase behaviour• Attitudes surrounding new products and services or line

extensions

The ACNielsen Family Shopper Omnibus allows clients to talkto the people who make purchasing decisions.

For more information, contact Tim Hodapp [email protected].

quick and efficient way to collect customer information via

loyalty cards so that retailers can utilize the data for future

promotions and merchandising.

Retailers are also using mobile technology to staff the aisles

and check customers out as they shop. This is especially

prevalent with large appliance or furniture retailers, where

the customer would typically buy only one or two items

and doesn’t want to wait in line. Checking out customers as

they shop relieves front-end congestion. And customers can

spend more time shopping in the store rather than waiting

in a checkout line.

Retailers benefit by enjoying more satisfied consumers,

lower labor turnover rates, and more accurate inventory

management. This mobile technology is also used to imple-

ment price changes in the aisle, in real-time, while also

updating inventory levels, again demonstrating how a focus

on helping their consumers also can help the bottom line.

Advances in the front of the store—self-checkout, mobile

POS, “express markets,” instant payment devices (such as

the Mobil SpeedPass), information kiosks and many other

innovations—all add convenience to consumers’ lives.

Through technology, retail operations are becoming more

streamlined and connected. And when this technology

enables consumers to enhance their shopping experience,

retailers are reaping these additional benefits as well.

Trend Watch continued from page 26.


Available in Canada only

Has Consumer Behaviour Changed?At the same time, consumer attitudes and buying behav-

iours may have changed during the downturn. 2001 would

have been the first time some shoppers ventured into

discount formats or picked up private label products. If

those experiences have been positive, should we expect

habits to change just because the economy is healthier?

Fortunately, signs are that both the U.S. and Canadian

economies are rebounding and that CPG marketers and

retailers will benefit from increased consumer confidence.

But last year’s economic downturn does have its hang-

overs. Now, more than ever, the success of any one store

format or brand will depend on smart price and promotion

strategies and a sophisticated understanding of the shopper

and consumer.

I look forward to reviewing a year of growth and innova-

tion when we do this again next year!

Executive Insight: Patrick Dodd, continued from page 5


Category Business Planner provides the common ground for a true meeting of the mindsbetween retailers and manufacturers. How? By delivering category information in the retailer’s customized view.

Powerful Web-enabled tools let you drill down and do in minutes what once took weeks.Imagine, the hours you once spent on data compilation and analysis can now be spentworking together to create thoughtful, effective category plans. Your productivity will beimproved. And your business partnerships strengthened. Finally, you can realize the fullpotential of category management.

Sound too good to be true? Go to acnielsen.com/cbpand see for yourself.

At last, there�s a one-number system for collaboration at the trade desk.Introducing Category Business Planner from ACNielsen.

©2002, ACNielsen Corporation. ACNielsen is a trademark of A.C. Nielsen Company.


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