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
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 • 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 • 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.
Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period? Answer: 30%
Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period? Answer: 55%
Measure: Distribution ACV Weighted Distribution vs. Stores Selling Over a 4 Week Time Period? 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? ACV Wtd Distribution=40% + 15%= 55% Avg Weekly ACV Wtd Distribution=(40+55+15+0)/4=27.5%
(Product’s Volume in Market/Population in Market) (Product’s Volume in Total U.S./Population in Total U.S.) X 100 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.
Sales • CDI – Category 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 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 • Includes all types of trade merchandising • Feature • Display • Feature and Display • Special Pack • Price Reduction (5% or greater)
Any Display Any Feature Display Only Feature Only Feature&Display Sales Feature Only vs. Any Feature
Sales Merchandising Measures: • % of Volume • 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
COT Segmentation - EQ Share • Mass is the largest and fastest growing COT 1999 Category EQ Volume by Class of Trade (% Change vs. YAG)
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 • Speed Stick • Right Guard • Lady Speed Stick • Secret • Male • Female • Unisex • AP • Deo • Scented • Unscented • Large • Small 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 • 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
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 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? Source: IRI G/D/M 7/00