You Need More Than Just Data

INSIGHTS FOR INNOVATION: MEYERS RESEARCH CENTER DRIVES SHOPPER AND

CONSUMER UNDERSTANDING

“A thought, fact, combination of facts, data and/or analysis of data that induces meaning and furthers understanding of a situation or issue that has the potential of benefiting the business or re-directing the thinking about that situation or issue which then in turn has the potential of benefiting the business.”

INSIGHTS IN RESEARCH

Insights are to an idea what Blitz firelighters are to a fire. They represent the best way of generating great ideas that inspire success. We like to say “Insight Drives Our Ideas”. Ultimately, we believe that the most effective ideas are based on a contextually relevant foundation.

But, there’s a problem. The word “insight” is very often misused. An insight is not an observation of behavior pulled from research. It isn’t a collection of stats and data from your Web analytics. If observations are the tip of the iceberg, the remaining two-thirds below the water, the part that is not immediately obvious, would be the insights.

Here is an insight:"Product satisfaction arises less from inherent construction and performance than from consumers' internalized perceptions of personal utility."

A HIGH potency insight would like this:"People don't want quarter-inch drills. They want quarter-inch holes."

Why is a good insight like a refrigerator?

Quote by Jeremy Bullmore

HYBRID RESEARCH TECHNIQUES

“The best business insight comes from a holistic understanding of the market”.

HYBRID APPROACH #1

Qualitative methods contribute to the development of quantitative survey instruments.

Focus Groups or IDI’s Ethnography Shop-Along’s

HYBRID APPROACH #2

Quantitative study that uses qualitative results to help interpret or explain the quantitative findings.

Online Survey Focus Groups

HYBRID APPROACH #3

Quantitative results help interpret qualitative findings, as when focus group participants are asked to fill out survey questionnaires at the session.

Focus Groups

Survey on Smartphone

Text to VotePolling

Online Survey

HYBRID APPROACH #4

Two methodologies are used to cross-validate and build upon results.

In-Store Intercepts Observations Only

Shop-Alongs Eye Tracking

Meyers Research Center offers a variety of analytic approaches to

deliver the necessary data to drive decisions based on a wide array of criteria necessary to support key

strategic decisions.

MEYERS’ CONSUMER DECISION TREES

1. In-Aisle Interviews on Consumer Attitudes• Collect information about:

What consumers DO What consumers WANT / NEED What consumers VALUE

• Actual fresh purchase decisions of consumers (not simulated purchase occasions, andnot purchases made months or years ago)

2. Product Classification• Cross-tabulate collected attitudes and observed behavior with purchase decision

MEYERS’ CONSUMER DECISION TREES3. Hierarchical Cluster Analysis:Products that share similar profiles group together into branches of a purchase decision hierarchy or “tree”. The most defining distinctions between products in a category are at the top of the tree.

4. MRC’s Consumer Decision Tree:The decision tree is a directed graph that does not show the conscious thinking of consumers, but shows instead a derived proximity.

TotalCategory

TotalCategory

Branch 1Branch 1 Branch 2Branch 2

Branch A of 1Branch A of 1 Branch B of 1Branch B of 1

SHOPPER MARKETING

• According to Advertising Age (October 2007) Shopper Marketing is growing faster than internet advertising.

• Predicted compound annual growth rate of 21% through 2010.

• P&G announced in September 07 that they will treat in-store marketing as an advertising expenditure.

• $500MM per year.

SHOPPER MARKETING

Old School

• Broad-Based Category Shopper Insight Programs typically focused on a number of different channels and chains. Undifferentiated data and strategy.

New School

• Account-specific initiatives to better align brand strategy with retail strategy, and ensure win-win for both.

• Involves the testing of mutually-beneficial initiatives to reinforce brand value, grow the category, generate incremental sales and prove or disprove ROI.

SEGMENTATION IN SHOPPER MARKETING

• Segmentation is a method for grouping shoppers based upon similarities they share and using any dimensions that are business relevant – whether it be need states, channel preferences, interest in product features, or profitability.

• What are your business objectives?

• Developing new products

• Creating differentiated marketing communications, offers or ads

• Developing a retention strategy, a win-back strategy, an expansion strategy, a frequency strategy

• Targeting high value prospects

• Align shopper insights with consumer (brand) insights or retailer insights

• Recommended sample size: n=400+

• Plan for this early in the project

• Statistical techniques:• Cluster analysis• Chaid• Loglinear• and more

• Wal-Mart understands that not all shopper segments are alike

- Brand Aspirationals* - One Stop Shoppers

- Price Value Shoppers* - Conscientious Objectors

- Trendy Quality Seekers - Social Shoppers

- Price Sensitive Affluents*

* Highest potential for more profitable incremental sales

• Safeway shopper segments…

- Value - Seeking - Simplicity Seeking

- Variety Seeking - Discovery Seeking

- Brand Seeking - Quality Seeking

• Sam’s shopper segments…

- Office Administrator - Traditional Club Shopper

- Business Reseller - Demanding/Experiential Shopper

- Institutional Buyer - Mom/Family CEO

- Food Service Entrepreneur - Active Boomer

SEGMENTATION TO ALIGN WITH A RETAILER

• Speak to the retailers in a language they already know

SEGMENTATION TO ALIGN WITH BRAND

Brand Segment 1

Brand Segment 1

Brand Segment 2

Brand Segment 2

Brand Segment 3

Brand Segment 3

Brand Segment 4

Brand Segment 4

Shopper Segment 1

Shopper Segment 1

Shopper Segment 2

Shopper Segment 2

Shopper Segment 3

Shopper Segment 3

Shopper Segment 4

Shopper Segment 4

Shopper Insights

Consumer Insights

• Replicate a classification and extend a segment profile to in-store behavior, rather than re-invent

SEGMENTATION IN THE NEW AGE OF VALUE SHOPPING

4 0© M e y e r s R e s e a r c h C e n t e r , C r o s s - C h a n n e l S h o p p in g 2 0 0 9

F a c t o r C o m p o n e n t 4

E c o n o m i z i n g a n d S h o p p i n g S t r a t e g y

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3 . 4

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3 . 6 3 . 7

3 . 1

4 . 4 4 . 3

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1

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I b u d g e t b e c a u s e Ih a v e t o

I u s e a d v e r t i s e m e n t sa n d / o r c o u p o n s t op l a n m y s h o p p i n g

I n t h i s e c o n o m y , I ’ df e e l g u i l t y s h o p p i n g

f o r a n y t h i n g o t h e rt h a n t h e b a s i c s

I ’ m g e t t i n g l e s sr e s p o n s i v e t o s a l e sa n d d e a l s b e c a u s e

t h e r e ’ s a l w a y sa n o t h e r o n e n e a r l y

e v e r y w e e k

I h a v e s a v e d e n o u g he x t r a m o n e y t o t a k e an a t i o n a l r e c e s s i o n i n

s t r i d e

A b o v e t h e f r a y ( G 3 )N u r t u r in g p r o v id e r ( G 4 )

C o n v e n ie n c e & g r a t i f ic a t io n ( G 2 )S k e p t ic a l f o x ( G 5 )E m b a t t le d s u r v iv o r ( G 1 )

A g r e e c o m p l e t e l y

N e u t r a l

D i s a g r e ec o m p l e t e l y

G e n e r a l ly e v e r y o n e a g r e e s to s o m e e x t e n t t h a t b u d g e t s a r e n e c e s s a r y a n d g e n e r a l ly e v e r y o n e d is a g r e e s t h a t t h e y a r e p r e p a re d to t a k e a n a t io n a l r e c e s s io n in p e r fe c t s t r id e . N e v e r t h e le s s th e r e a r e s ig n if ic a n t a t t i t u d in a l s p r e a d s b e tw e e n th e s e g m e n ts o n th e s e v a r ia b le s . T h e E m b a t t le d S u r v iv o r is le a s t w e l l p r e p a r e d fo r m o r e r e c e s s io n a n d m o s t p r e s s e d t o k e e p w i t h in a b u d g e t .

T h e C o n v e n ie n c e & G r a t i f ic a t io n s h o p p e r a n d th e S k e p t ic a l F o x s h o p p e r f e e l t h a t s a le s a n d d e a ls a r e c o m m o n p la c e e v e n t s . T h e F o x is a b ig d e a l s h o p p e r w h o u s e s a d s a n d /o r c o u p o n s to p la n s h o p p in g . N u r t u r in g P r o v id e r s a n d E m b a t t le d S u rv iv o r a ls o p a y k e e n a t te n t io n to a d s , c o u p o n s a n d d e a ls .

35© Meyers Research Center, Cross-Channel Shopping 2009

Introducing the Shopper Segments

Embattled Survivor

The Skeptical Fox

Convenience & Gratification

Nurturing Provider

Above the Fray

“Oh, really? I didn’t notice.” “I want better prices

and good quality products for my family”

Do it for me: “Check out the prices at other retailers to make sure your sale isn’t more expensive for me.”

Weaving in and out of the retail landscape looking for deals.

“Make prices affordable in this awful economy.”

Five shopper segments emerged from a battery of attitude questions. The segments are reflective of shopping styles in a new age of value seeking. The shopping styles range from outwardly expressed indifference (Above the Fray), controlled provisioning for the home (Nurturing Provider), lazier provisioning (Convenience & Gratification), strategic shopping (The Skeptical Fox) and troubled perseverance (Embattled Survivor). These shopping styles infiltrate all classes of trade and extend to many categories.

Shoppers were segmented entirely on the basis of their response to a attitudinal statements. The statements covered attitudes about the economy, retail outlet performance, convenience, product safety concerns, shopping behavior, and environment issues.

KEY DRIVERS ANALYSIS

• What the product landscape looks like?

• How are products in the category similar/different in terms of Sensory Properties and Instrumental Characteristics?

• How uniform is my product? Plant-to-Plant? Within-Plant?

• How does my product age? Do different storage conditions follow the same path over time?

• Study the competitive set of products

• Understand the current distribution of products on the sensory domain map

• Compare/contrast company’s products and prototypes vs. the competition

• ID areas on the map where no product currently exists (business opportunity)

• Study key drivers of liking and image

• ID the sensory attributes and physical properties that drive acceptance

• Understand how sensory and physical properties affect the image a product conveys to consumers

• ID ideal points and the proximity of test products to the ideal (s)

• Focus future product improvement efforts on the areas that will have the greatest impact

KEY DRIVERS ANALYSIS

Products

Profiles, DescriptiveFormulation Variables

Preference Map LinkingAcceptance to Sensory

by Regression

Sensory & Instrumental Readings Consumer Ratings

Acceptance/Image RatingsCLT

Perceptual Map(PCA)

Consumer Segments(Cluster Analysis)

Descriptive Analysis

Average Profiles => PCA

Key Drivers Analysis

Principal Component Analysis (PCA)

Map represents perceptual sensory domain

PCA factor loadings (axis of plane) describe the relationships among the sensory attributes. The factor loadings define the underlying sensory dimensions and separate the original sensory attributes into mutually exclusive, highly correlated groups.

Dots represent the sample position on the sensory domain. Point coordinates are factor scores for each sample from PCA

PCA factor scores describe the relationships among the test products.

Similarities and differences among the products can be deduced through examination of these maps.

Key Drivers Analysis

Principal Component Analysis (PCA) cont.,

– Product acceptability ratings are overlaid on the sensory map

– PCA factor scores are the predictor variables in the regression analysis of overall liking

– Predicted liking ratings are obtained for any point on the map. Ideal points are identified

– This also generates a predicted “ideal” profile, which can be used to prioritize future product improvement efforts

– The consumers’ liking ratings can be examined to determine if different segments of consumers have different optimum products

– Sensory segments are common. Isolating the segments, determining their size and identifying the segment optima provide more relevant summaries of the consumers’ opinions than would otherwise be obtained

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-17.67

-135.34

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Observations

Similarity

CLUSTER ANALYSIS IDENTIFIES HOW MANY SEGMENTS EXIST

Segment 2 (n=27) Segment 1 (n=88)

CASE STUDIES

CASE STUDY #1

Lip Care Simulated Channel Research

Meyers Research Center was hired by a major manufacturer of lip care products to generate key shopper insights for new POS solutions. The objective of this research is to learn how best to influence the consumer segment identified as (blank) to trial of (BRAND) Lip Care through point of sale and/or other marketing interceptions in the path to purchase. To address the research objectives, a simulated shopping and shop-along data collection methodology were used.

MRC set up a simulated “shelf” to replicate the entire planogram as it may appear in a Target/Walmart outlet at a focus facility. Besides the simulated shopping, a small number of shop-alongs in actual nearby stores were used to support the findings. The shop-along interviews revealed behavioral insights and unconscious attitudes through observation and open-ended discussion with consumers at the point of sale.

CASE STUDY #1 (CONT.)

Key path-to-purchase insights were generated and Meyers answered the following questions: • Where does she expect to find lip care in the store + How does she find it finally?• What gives orientation within the category? (brands, colors, formats, price, key

indicators for innovations)• How does she see (BRAND) within the category?• What makes it challenging across the competitive set (for BRAND)?• What is the hierarchy of decision making at the shelf? / What attracts shoppers on

product level? • Planned vs. impulse purchase• What influences loyalty? What are reasons for brand/product switching?• What makes shopping in lip care a pleasurable / engaging experience?• What promotions act as purchase triggers?• Where are shoppers likely to be most responsive (outside the primary set)?

CASE STUDY #2Integrated Promotion Evaluation: Snack Food Product

Objective: To determine the best promotional alternative to reach the targeted upscale audience. The promotion alternatives included extended and limited sampling programs and two coupon alternatives.

Research Design: Matched panels for each promotional variation (10 stores each for the four options). Sales analyzed through the purchase of scanner sales data. Consumer attitudes and behavior collected through in-store intercept interviews (MRC's Purchase Observation Study (tm) service). Chain buyers and store managers interviewed by MRC's TradeSmart Survey (tm) division.

Results: The extended sampling program with one coupon alternative was the most productive promotional option. This was verified by scanner data and consumer feedback. However, the extended sampling was unanimously rejected by the retailers due to excessive clutter and confusion, in the participating stores.

Action Taken: The limited sampling program and preferred coupon alternative were chosen because they involved a smaller but still substantial sales increase---- and did not alienate the trade.

Maybe an insight isn't a new piece of information, but a new way of interpreting existing information. The effect is not so much "I never knew that" as "I never thought of it that way before". Which implies that the insight, as the thing that changes minds, needs to be communicated to the audience, not simply used as a way to get to them or prove that the brand somehow "knows" them.

ABOUT US

Meyers Research Center (MRC) is a full service, state of the art market research and strategic consulting firm. We offer clients a wide variety of integrated services providing inventive solutions to complex marketing, advertising, product, strategic and sales issues.

For over 35 years, MRC has provided clients with quality research, actionable insights, service and support.

MRC specializes in a variety of quantitative and qualitative custom and syndicated market research including:

Shopper Insights: Purchase Decision Research, Consumer Decision Trees, Syndicated Channel Insights Studies (C-Store, Dollar Store, Membership Warehouse Club, Drug, Cross-Channel), Hispanic Multi-Channel Insights, Shopper and Product Segmentation, Shopper Marketing

Observational Insights: Shop-Alongs, Ethnographic Research, Mystery Shopping, Traffic Studies, Shadow Shopping Research

Retail Insights: Controlled Store Tests, Test Marketing, Matched Market Tests, Store Audits, Mystery Shopping, Trade Interviewing

Consumer Insights: Tracking Studies, Brand Awareness Studies, CSL Studies, A & U Studies, Brand Extension Testing, Advertising and Communication Studies, Sensory Testing, Product/Concept/Copy/Package Testing, Market Segmentation, Brand Equity Research, Market-Structure Research

THANK YOU

www.meyersresearch.com