Upload
donald-hume
View
168
Download
0
Embed Size (px)
Citation preview
Transitions Integrated Marketing Analytics- Achieving Growth By Identifying and Quantifying Marketing Opportunities –
August 27, 2009
2
Project Objectives
• Understand how consumers are behaving in the prescription lens market and which brands/ categories are “real” competitors.
• Develop a mathematical model of the prescription lens market that can be used as a basis for forecasting the impact of its own marketing activities as well as the impact of competitive initiatives.
• Integrate findings of the Market Structure Analysis into Market Mix analysis in order to further increase ROI
– Where no Market Researcher has gone before…
3
The Business Intelligence Vision
Consumer Segmentation (2008)
Awareness-Tracking-Usage (Ongoing)
Market Structure (2009)
Brand Awareness Category Awareness
Market Mix (2004)
Consumer Awareness
Marketing Data ECP/Lab Data Retail Data Sales Data
A data driven approach to monitor and track the effectiveness of
Marketing and Sales activities
TIGER Data Warehouse
(2006)
4
Where no one has gone before…
• Consumer segmentation pushed through all phases of research• Integration of A&U, Market Structure and Market Mix
– Goal is improved ROI
A&U
Brand AwarenessUsage & SatisfactionPurchase Intent
Market Structure
Switching LevelsMarket DefinitionOptimal Spending
Market Mix
Relative Performance ofMarketing Tactics
Media Optimization
Integrated Strategic Platform
5
HMO Generation
22%
Blasé/No Frills28%
Sharper Image Seekers
25%
Short-Sighted Followers
25%
• The prescription lens population can be divided into four distinct segments, each differing in their attitudes about prescription eyewear in general and eyeglass lenses specifically.
– The segments are fairly equal in size, with each representing about one fourth of prescription eyeglass wearers.– Summary profiles of each of these segments are provided on the following four pages.
Target Segments Overview
“I don’t need my glasses 24/7—they get in the way of everyday life! I just hate shopping for new eyeglasses. The only time I make an appointment with an eye care provider is if something is wrong. I don’t know much about different types of lenses. Why would I need glasses that adapt to changing light conditions?”
“I want and deserve the best when it comes to eyewear, with the latest technology and style. I take care of myself, including my eyes, and I believe any eyeglasses you buy should provide UV protection. I really trust my eye care provider, although I can go wherever I want for eye care—I’m not restricted by insurance.”
“I can only go to certain eye care providers because I want to stay in the range my policy covers. It’s really important to me that prescription eyeglass lenses are totally covered by my insurance plan.”
“I can’t function without my glasses—I take them off only when I’m showering or sleeping. Shopping for eyeglasses is a drag. The only time I visit an eye care provider is when my glasses are broken or something is wrong. Eyeglass lenses are all the same—I don’t need any bells or whistles when it comes to eyewear.” Segment 1:
Segment 2:Segment 3:
Segment 4:
6
Priorities of Target Segment
86
117
107
94
Short-Sighted Followers
Sharper Image Seekers
HMO Generation
Blasé/ No Frills
Potential Value Investment Required
119
74
77
124
Higher Index Is Better Lower Index Is Better
86
117
107
94
Short-Sighted Followers
Sharper Image Seekers
HMO Generation
Blasé/ No Frills
Potential Value Investment Required
119
74
77
124
Higher Index Is Better Lower Index Is Better
potential value since they spend the most for prescription eyeglasses and are more likely to buy multiple pairs. Their higher awareness, usage, and purchase interest in the brand make this segment the “easiest” to attract and retain.
The HMO Generation segment represents a secondary target. This segment has a fairly high potential value—driven in part by their category spending, but also their high incidence of carrying
vision insurance. Since their awareness, usage, and buying intent for Transitions are not quite as strong, the investment required to attract and retain consumers in the HMO Generation segment is a little higher than for Sharper Image Seekers.
Blasé/No Frills and Short-Sighted Followers are low priority targets for Transitions lenses. These segments spend less in the category (especially Short-Sighted Followers), and they demonstrate lower awareness, usage,
and future purchase interest for Transitions. Attracting them will be a challenge since they are lesstrusting in ECPs and are less likely to actively seek UV protection for their eyes.
Despite their similar sizes, the four consumer segments represent differing opportunities for Transitions Optical.
The segments vary in their potential value to the franchise as well as the investment required to attract and retain Transitions users.
Sharper Image Seekers profile as a primary target for Transitions lenses.
Sharper Image Seekers have the highest
7
Profile Of Short-Sighted Followers
“I don’t need my glasses 24/7—they get in the way of everyday life! I just hate shopping for new eyeglasses. The only time I make an appointment with an eye care provider is if something is wrong. I don’t know much about different types of lenses. Why would I need glasses that adapt to changing light conditions?”
Least dependent on eyeglasses (average: 4.8 hrs/day) Least experience wearing eyeglasses (average: 12 yrs) Less likely to wear photochromic lenses (15%) More likely to wear glasses and contacts (14%) Lower awareness and usage of several eyeglass lens brands Less confident knowing what each type of ECP does Visit ECP less often Purchase frames/lenses less often Lowest prescription eyeglass spending ($150)
Category Dynamics
Lower awareness, usage, and future purchase interest for Transitions lenses (45% aware; 12% currently use; 21% positive purchase interest)
Lower impression of Transitions lenses Less positive toward Transitions concept across all key
metrics Less likely to believe Transitions positioning statement Lower satisfaction among Transitions users (overall, indoor
clarity, and indoor/outdoor adaptation speed)
Transitions Brand Dynamics
Somewhat lower self esteem—less likely to see themselves as: family oriented, having a style that catches attention, brand loyal, buying products based on quality/not price
More likely to see themselves as price sensitive Less health-conscious Least likely to have health problems Average participation in most activities
Personality, Health, And Interests
More often female (57%) Younger (average age: 42) More singles (30%) Larger households with younger kids (6 and under) More likely to live in suburbs (51%) More often not employed (28%) Average household income ($52.2K)
Demographics
More influenced by word of mouth; average in terms of all other media influence
Watch less TV Online more often More likely to download music and search for employment
online More likely to own an MP3 player or iPod, less likely to
own a TV (although most do), fax machine, or DVR
Media
Segment SizeRecommended Action
Low Priority
8
Profile Of Sharper Image Seekers
“I want and deserve the best when it comes to eyewear, with the latest technology and style. I take care of myself, including my eyes, and I believe any eyeglasses you buy should provide UV protection. I really trust my eye care provider, although I can go wherever I want for eye care—I’m not restricted by insurance.”
More likely to wear photochromic lenses (35%) More likely to own multiple pairs of glasses (47%) Higher awareness and usage of several eyeglass lens brands More confident knowing what each type of ECP does Visit ECP more often Purchase frames/lenses more often Highest prescription eyeglass spending ($244) More likely to buy multiple pairs (20%) Least likely to have vision insurance (37%)
Category Dynamics
Highest awareness, usage, and future purchase interest for Transitions lenses (64% aware; 30% currently use; 44% positive purchase interest)
More positive impression of Transitions lenses More positive toward Transitions concept across all key
metrics, although uniqueness perceptions are low More likely to believe Transitions positioning statement Higher satisfaction among Transitions users (overall, indoor
clarity, and outdoor adaptation speed)
Transitions Brand Dynamics
Higher self esteem—more likely to see themselves as having a wide variety of personal characteristics, including: family oriented, down-to-earth, like myself as a person, excellent taste, and buy products based on quality/not price
Less likely to see themselves as price sensitive Most health-conscious Spend more time driving More active; participate in a wider variety of leisure
activities
Personality, Health, And Interests
Older (average age: 50) More often married (62%) Smaller households/less likely to have kids (72% don’t) More likely to own home (70%) More educated More often retired (30%) Highest household income ($61.7K) More likely to live in the South, less likely to live in the
West
Demographics
More influenced by word of mouth, product or brand websites, and magazines
Watch more TV and a wider variety of TV shows More likely to read a variety of magazines More likely to visit a variety of Internet sites, but less likely
to visit social or networking sites Most likely to do a variety of online activities More likely to own a variety of electronics
Media
Segment SizeRecommended Action
1 Top Priority
9
Profile Of HMO Generation
“I can only go to certain eye care providers because I want to stay in the range my policy covers. It’s really important to me that prescription eyeglass lenses are totally covered by my insurance plan.”
More likely to wear photochromic lenses (31%) More likely to own multiple pairs of glasses (43%) Higher awareness and usage of several eyeglass lens brands More confident knowing what each type of ECP does Visit ECP more often Purchase frames/lenses more often More likely to purchase lenses from private practice
provider Most likely to have vision insurance (79%)
Category Dynamics
Average awareness and usage for Transitions lenses, but above average future purchase interest (58% aware; 21% currently use; 36% positive purchase interest)
More positive impression of Transitions lenses More positive toward Transitions concept across all key
metrics, although uniqueness perceptions are low More likely to believe Transitions positioning statement Higher satisfaction among Transitions users (indoor clarity
and indoor adaptation speed)
Transitions Brand Dynamics
Somewhat higher self esteem—more likely to see themselves as having a variety of personal characteristics, including: family oriented, down-to-earth, like myself as a person, and buy products based on quality/not price
More health-conscious Most likely to have health problems, especially high blood
pressure, high cholesterol, and diabetes More likely to watch sports on TV Less interested in participating in athletics
Personality, Health, And Interests
Older (average age: 50) Less likely to own home (57%) Less educated More often retired (27%) Lower household income ($48.4K) More ethnically diverse More likely to live in the West and Northeast, less likely to
live in the South
Demographics
More influenced by word of mouth, media or informational websites, TV shows, newspaper ads, and e-mails sent from a company
Watch more TV and a wider variety of TV shows Online less often More likely to play games online, less likely to make online
purchases or blog More likely to subscribe to cable television or own a DVR,
less likely to own an MP3 player or iPod
Media
Segment SizeRecommended Action
2 Second Priority
10
Profile Of Blasé/No Frills
“I can’t function without my glasses—I take them off only when I’m showering or sleeping. Shopping for eyeglasses is a drag. The only time I visit an eye care provider is when my glasses are broken or something is wrong. Eyeglass lenses are all the same—I don’t need any bells or whistles when it comes to eyewear.”
Most dependent on eyeglasses (average: 9.5 hrs/day) Less likely to wear photochromic lenses (16%) Less likely to own multiple pairs of glasses (32%) Lower awareness and usage of several lens brands Less confident knowing what each type of ECP does Visit ECP less often More likely to buy lenses from mass merchandiser Lower prescription eyeglass spending ($172) More likely to have kids who need corrective lenses (18%)
Category Dynamics
Lower awareness, usage, and future purchase interest for Transitions lenses (48% aware; 14% currently use; 19% positive purchase interest)
Lower impression of Transitions lenses Less positive toward Transitions concept across all key
metrics Less likely to believe Transitions positioning statement Lower satisfaction among Transitions users (overall,
indoor/outdoor clarity, and indoor/outdoor adaptation speed)
Transitions Brand Dynamics
Lower self esteem—less likely to see themselves as having any personal characteristics, except two (where they are average): price sensitive and old-fashioned
Least health-conscious Less likely to have health problems Spend more time working at job (indoors) Less interested in a handful of activities—cooking, reading,
watching sports, and gardening
Personality, Health, And Interests
More often male (54%) Younger (average age: 43) More singles (30%) Larger households with tweens/teens (age 10-15) Less likely to own home (57%) More often employed (62%) Lowest household income ($47.5K)
Demographics
Less influenced by word of mouth, as well as several other media sources
Watch less TV Less likely to read a variety of magazines Less likely to engage in a variety of online activities, but
more likely to blog Less likely to own a variety of electronics
Media
Segment SizeRecommended Action
Low Priority
11
Transitions Awareness, Trial & Usage (ATU) Study Wave 1- 2009
12
Key Research Objectives
• Understand awareness, trial and usage (ATU) of Transitions Optical Photochromic eye glasses, including:
– Unaided/aided awareness– Satisfaction– Purchase Intention– Users/Non-Users
12
13
Purchase Intent
Top Of Mind Awareness
Unaided Awareness
Media
TVMagazinesRadio
Trial
Usage
Satisfaction
Product Loyalty
Reliability
Sales
Source> Internally developed based on U.S. market research
13
Relationships of key ‘soft’ metrics
Social Medial
14
Research Methodology
• Online 40-minute survey conducted with consumers, including– A representative sample of the US (based on sex, age and
region)• 904 total respondents• 212 (23%) self-reported current Transitions lenses users• 112 (12%) self-reported past Transitions lenses users
– An over-sampling of Transitions lenses users for additional analyses
• 360 self-reported Transitions lenses current/past users in over-sampling• 679 self-reported Transitions lenses current/past user in rep sample
and over-sampling.
• Primary screening criteria:– Primarily wore Rx eyeglasses in the last 7 days.
14
15
Executive Summary – Key Findings
Conclusions• About 90% of consumers (who are
aware that they use Transitions) are satisfied with Transitions.
• About 45% of Transitions users are repeat users.
• Unaided Awareness of Transitions brand name is not high.
• Differences exist across segments that can be leveraged beneficially for Transitions.
Implications• Most Transition users are satisfied with
their lenses and a large percent become repeat purchasers.
• Increase awareness of Transitions via creative advertising to more receptive segments.
15
Results
17
89%
46%
46%
44%
% satisfied with Transitions Lenses
(Top 3 boxes)
% very satisfied with Transitions Lenses
(Top box)
% who are repeat purchasers of
Transitions Lenses
% intending to purchase Transitions at next purchase (Top box)
Current Transitions Users (n=327)
About 90% of consumers (who are aware that they use Transitions) are satisfied with Transitions…Forty six percent are very satisfied, 46% are repeat purchasers and 44% intend to buy Transitions lenses in the future.
Repeat Purchase, Satisfaction & Purchase Intent
17
18
Aided Awareness of Transitions brand name is approximately 74%, but Unaided Awareness is just 2%.
Thirty four percent reported using Photochromics and only about half (18%) could identify their Photochromics as Transitions.
Photochromics Usage
18
Brand Awareness(Among >49 years olds)
34%
15%
18%
Use photochromics
Use photochormics & clear eyeglasses
Reported Transitions use
Representative Sample (n=902)
1.5%
2.0%
74.1%
Top of Mind Unaided Awareness of Transitions - Over 49 Yrs old (n=343)
Total UnAided Awareness of Transitions - Over 49 Yrs old (n=343)
Aided Awareness of Transitions - Over 49 Yrs
old (n=343)
Rep Sample (n=343)
19
61%
27%
8%
10%
5%
25%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=169)
52%
31%
18%
21%
6%
36%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=903)
Thirty-six percent of consumers could not recall any advertisements for eyeglasses while 25% of Transitions lenses current users could not recall any ads for Transitions. TV was reported as the media where most ads were seen.
19
Media Where Advertisement Seen For Eyeglasses
Media Where Advertisement Seen For Transitions
20
Findings for overall consumer attitudes - Transitions(See appendix for details)
• Unaided awareness of Transitions– Important that “lenses are both clear & sunglasses in one so that I do not have to change glasses”– The more important it was to consumers that lenses are both clear & sunglasses in one
(convenience), then the less they worried about their eyeglasses making them unattractive (fashion) and the less they depend on their own internet research concerning lens brands (information seeking).
• Current users of Transitions– Users are likely to purchase Photochromic eyewear in the next 12 months and often likely to
purchase Transitions. – Consumers that plan on purchase Transitions will consider what is heard/seen in ads unless they
can only go to certain ECPs due to their insurance coverage. – Those consumers that are less likely to consider what they heard/saw in ads are concerned about
how they look in their eyeglasses.• Satisfaction with Transitions
– Important that lenses are lenses are clear & sunglasses in one – Important that they trust the Transitions brand– Important that lenses become dark as possible in bright sunlight– High levels of consumer satisfaction tend to offset Transitions’ premium pricing. – Even when perceptions of ‘trust’ are not positive, Consumers will still be likely to purchase
Transitions if an ECP recommends them.
20
21
Findings for overall consumer attitudes - Transitions(See appendix for details)
• Intention to purchase Transitions– Likely to purchase Photochromics in next 12 months if ECP recommends.– Important that lenses become dark as possible in bright sunlight. – Some consumers believe that eyeglasses make a person look more professional, particularly if a family member or friend reinforces this
notion, and if they have insurance to cover part or all of the eyeglass price– Consumers that don’t plan on purchasing Transitions’ are primarily concerned about price and will not buy even if recommended by an ECP.
21
Results: Segment 1 - Short Sighted Followers
23
89%
46%
46%
44%
84%
30%
41%
33%
% satisfied with Transitions Lenses
(Top 3 boxes)
% very satisfied with Transitions Lenses
(Top box)
% who are repeat purchasers of Transitions
Lenses
% intending to purchase Transitions at next purchase (Top box)
Current Transitions Users (n=327)
Short-Sighted Followers (n=37)
Eighty-four percent of short sighted follower consumers (who are aware that they use Transitions) are satisfied with Transition – This is slightly lower than other segments.Thirty percent are very satisfied, 41% are repeat purchasers and 33% intend to buy Transitions lenses in the future.
Repeat Purchase, Satisfaction & Purchase Intent
23
24
Awareness of Transitions brand name among short sighted followers is not high – this segment has lower Transitions usage, and awareness when compared to the other segments. 23% reported using Photochromics and only about half (12%) could identify their Photochromics as Transitions. Unaided awareness of Transitions (i.e., when a list of brands is not provided to respondent) was 0% while aided awareness (i.e., when list of brands is provided) is 67%.
Photochromics Usage
24
Brand Awareness(Among >49 years olds)
1.5%
2.0%
74.1%
0.0%
0.0%
66.7%
Top of Mind Unaided Awareness of Transitions - Over 49 Yrs old (n=343)
Total UnAided Awareness of Transitions - Over 49 Yrs old (n=343)
Aided Awareness of Transitions - Over 49 Yrs
old (n=343)
Rep Sample (n=343)
Short-Sighted Followers (n=72)
34%
15%
18%
23%
13%
12%
Use photochromics
Use photochormics & clear eyeglasses
Reported Transitions use
Representative Sample (n=902)
Short-Sighted Followers (n=226)
25
61%
27%
8%
10%
5%
25%
46%
36%
14%
14%
0%
29%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=169)
Short-Sighted Followers (n=28)
52%
31%
18%
21%
6%
36%
46%
28%
13%
20%
6%
43%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=903)
Short-Sighted Followers (n=226)
Twenty-nine percent of short sighted followers who claim to use Transition have not seen any ads for Transitions – this segment seems to see fewer ads.Forty-three percent of consumers could not recall any advertisements for eyeglasses. TV was reported as the media where most ads were seen.
25
Media Where Advertisement Seen For Eyeglasses
Media Where Advertisement Seen For Transitions
There are only 28 short-sighted followers represented so there is a potential for a high degree of sample error
26
Factors associated with favorability to Transitions – Short sighted followers(See appendix for details)
• Unaided awareness of Transitions N/A
• Current users of Transitions– Users are likely to purchase Photochromics in the next 12 months as long as an ECP
recommends them. – Non-users are often unfamiliar with Transitions.
• Satisfaction with Transitions– Satisfaction with Transitions’ lenses within this consumer segment is entirely predicated
upon whether or not the consumer felt Transitions’ lenses were worth paying extra for.• Intention to Purchase
– About smaller percent of this segment plans on purchasing Photochromic lenses in the next 12 months.
– The remaining consumers are concerned with how stylish Transitions’ lenses are.– Consumers who have issues with the stylishness of Transitions’ lenses also have greater
distaste for shopping for eyeglasses.
26
Results: Segment 2 – Sharper Image Seekers
28
Ninety percent of sharper image seeker consumers (who are aware that they use Transitions) are satisfied with Transitions. Fifty-two percent are very satisfied, 53% are repeat purchasers and 52% intend to buy Transitions lenses in the future.
Repeat Purchase, Satisfaction & Purchase Intent
28
29
34%
15%
18%
43%
17%
26%
Use photochromics
Use photochormics & clear eyeglasses
Reported Transitions use
Representative Sample (n=902)
Sharper Image Seekers (n=225)
Unaided Awareness of Transitions brand name among sharper image seekers is not high (3.1%) – this segment, though, has higher Transitions usage and higher Aided Awareness(75.3%). Forty-three percent reported using Photochromics and more than half (26%) could identify their Photochromics as Transitions.
Photochromics Usage
29
Brand Awareness(Among >49 years olds)
1.5%
2.0%
74.1%
1.0%
3.1%
75.3%
Top of Mind Unaided Awareness of
Transitions - Over 49 Yrs old (n=343)
Total UnAided Awareness of
Transitions - Over 49 Yrs old (n=343)
Aided Awareness of Transitions - Over 49
Yrs old (n=343)
Rep Sample (n=343)
Sharper Image Seekers (n=97)
30
61%
27%
8%
10%
5%
25%
61%
25%
2%
7%
8%
25%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=169)
Sharper Image Seekers (n=59)
52%
31%
18%
21%
6%
36%
63%
31%
18%
19%
8%
26%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=903)
Sharper Image Seekers (n=226)
Twenty-six percent of consumers could not recall any advertisements for eyeglasses while 25% of Transitions lenses current users could not recall any ads for Transitions. TV was reported as the media where most ads were seen.
30
Media Where Advertisement Seen For Eyeglasses
Media Where Advertisement Seen For Transitions
31
Factors associated with favorability to Transitions – Sharper image seekers(See appendix for details)
• Unaided awareness of Transitions– Likely to purchase Photochromics in next 12 months if ECP
recommends.– Without these recommendations, Transitions must successfully
differentiate itself from other brands (have a fairly strong brand identity).
• Current users of Transitions– Importance of lenses being clear and sunglasses in one. – Importance of lenses for outdoor use.
• Satisfaction with Transitions– Willingness to pay more for Transition lenses.
• Intention to purchase Transitions– Likely to purchase Photochromics in next 12 months– Not likely they may buy eyeglasses without guarantee– Most use eyeglasses all the time.
31
Results: Segment 3 – HMO Generation
33
About 90% of HMO Generation segment consumers (who are aware that they use Transitions) are satisfied with Transitions. Fifty-four percent are very satisfied, 49% are repeat purchasers and 53% intend to buy Transitions lenses in the future.
Repeat Purchase, Satisfaction & Purchase Intent
33
34
34%
15%
18%
45%
18%
26%
Use photochromics
Use photochormics & clear eyeglasses
Reported Transitions use
Representative Sample (n=902)
HMO Generation (n=198)
Unaided Awareness of Transitions brand name among HMO generation segment is not high – this segment does have higher usage and Aided Awareness, though.
Forty-five percent reported using Photochromics and more than half (26%) could identify their Photochromics as Transitions. Unaided awareness of Transitions (i.e., when a list of brands is not provided to respondent) was 3.6% while aided awareness (i.e., when list of brands is provided) is 81%.
Photochromics Usage
34
Brand Awareness(Among >49 years olds)
1.5%
2.0%
74.1%
3.6%
3.6%
80.7%
Top of Mind Unaided Awareness of Transitions - Over 49 Yrs old (n=343)
Total UnAided Awareness of Transitions - Over 49 Yrs old (n=343)
Aided Awareness of Transitions - Over 49 Yrs
old (n=343)
Rep Sample (n=343) HMO Generation (n=83)
35
61%
27%
8%
10%
5%
25%
73%
24%
14%
14%
6%
20%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=169)
HMO Generation (n=51)
52%
31%
18%
21%
6%
36%
56%
39%
24%
26%
5%
30%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=903)
HMO Generation (n=198)
Twenty percent of HMO generation segment who claim to use Transitions have not seen any ads for Transitions – this segment seems to see more ads, though.
Thirty percent of consumers could not recall any advertisements for eyeglasses while 20% of Transitions lenses current users could not recall any ads for Transitions. TV was reported as the media where most ads were seen.
35
Media Where Advertisement Seen For Eyeglasses
Media Where Advertisement Seen For Transitions
36
Factors associated with favorability to Transitions – HMO Generation(See appendix for details)
• Unaided awareness of Transitions– Greater importance of lenses being appropriate for children, as determined through an
ECP recommendation• Current users of Transitions
– If consumers in this segment plan on buying Transitions in the future, then most plan to buy them within the next 12 months.
– The majority of this segment hate shopping for new eyeglasses so they consider things that they’ve seen or heard in advertisements to save time during the shopping process
– If consumers are less likely to buy Transitions in the next 12 months, then it’s because they feel Transitions fail to make them look professional.
– Lack of trust is the major reason given by consumers for not planning on purchasing Transitions within this consumer segment.
• Satisfaction with Transitions– Not likely that they will buy eyeglasses without guarantee
• Intention to purchase Transitions– Likely purchase Photochromics in next 12 months, particularly if they visit their ECP.
Even if they weren’t likely to purchase Transitions, their ECP could actually talk them into purchasing them.
36
Results: Segment 4 – Blasé No Frills
38
Ninety percent of blasé no frills consumers (who are aware that they use Transitions) are satisfied with Transitions – This is lower than Sharper Image Seekers and HMO generation.
Thirty eight percent are very satisfied, 36% are repeat purchasers and 35% intend to buy Transitions lenses in the future.
Repeat Purchase, Satisfaction & Purchase Intent
38
39
1.5%
2.0%
74.1%
1.1%
1.1%
72.5%
Top of Mind Unaided Awareness of
Transitions - Over 49 Yrs old (n=343)
Total UnAided Awareness of
Transitions - Over 49 Yrs old (n=343)
Aided Awareness of Transitions - Over 49
Yrs old (n=343)
Rep Sample (n=343) Blase No Frills (n=91)
34%
15%
18%
29%
14%
12%
Use photochromics
Use photochromics & clear eyeglasses
Reported Transitions use
Representative Sample (n=902)
Blase No Frills (n=253)
Unaided Awareness of Transitions brand name among blasé no frills segment is not high - this segment has lower user & has lower awareness. Twenty-nine percent reported using Photochromics and less than half (12%) could identify their Photochromics as Transitions. Unaided awareness of Transitions (i.e., when a list of brands is not provided to respondent) was 1.1% while aided awareness (i.e., when list of brands is provided) is 73%.
Photochromics Usage
39
Brand Awareness(Among >49 years olds)
40
52%
31%
18%
21%
6%
36%
43%
28%
17%
21%
5%
42%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=903)
Blase No Frills (n=253)
61%
27%
8%
10%
5%
25%
55%
26%
6%
6%
3%
32%
Television
Magazines
Newspaper
Internet
PGA
Not seen any
Representative Sample (n=169)
Blase No Frills (n=31)
Thirty-two percent of blasé no frills segment who claim to use Transition have not seen any ads for Transitions – this segment seems to see the fewest ads. Thirty percent of consumers could not recall any advertisements for eyeglasses while 20% of Transitions lenses current users could not recall any ads for Transitions. TV was reported as the media where most ads were seen.
40
Media Where Advertisement Seen For Eyeglasses
Media Where Advertisement Seen For Transitions
41
Factors associated with favorability to Transitions – Blasé no frills (See appendix for details)
• Unaided awareness of Transitions– Likely to purchase Photochromics in next 12 months – Not likely to purchase eyeglasses without a guarantee.
• Current users of Transitions– Likely to purchase Photochromics in next 12 months– Believe that Transitions helps maintain the health of eyes– Important how others think of them because of their eyeglasses & that others
care about the lenses they wear.• Satisfaction with Transitions
– Important that lenses adapt their tint to match the level of light,– Agree Transitions are worth paying more for– Important that lenses are appropriate for children.
• Intention to purchase Transitions– Likely to purchase Photochromics in next 12 months– Believe that Transitions help maintain the health of eyes – Agree Transitions are worth paying more for
41
Market StructureMarket Structure
43
What is Market Structure?
Market structure defines the market for a product:
– Behaviorally based approach to define the landscape in which a product competes (dimensions on which product competes)
– It explains the extent that products are substitutable
– It identifies and explains the hierarchy of decision making processes based on consumer needs, products’ performance, attitudes, and market environment
Market structure provides insights:– On expansion opportunities and
broad strategies to realize them– For effective lifecycle management– To proactively manage product
portfolio – For competitive strategy and
refinement of the value proposition
Competitors and market segments
Brand ABrand F
Brand Z Brand Q
Brand Y
Brand X
Brand B
Brand EBrand F
Brand QBrand CBrand Y
Brand ZBrand B
Brand A
Brand E
Brand CBrand D
Brand ABrand B
Segment 1
Segment 2
Segment 4
Segment 3
New Product?
New Product?
Brand ABrand F
Brand Z Brand Q
Brand Y
Brand X
Brand B
Brand EBrand F
Brand QBrand CBrand Y
Brand ZBrand B
Brand A
Brand E
Brand CBrand D
Brand ABrand B
Segment 1
Segment 2
Segment 4
Segment 3
New Product?
New Product?
MXMX
Map to your business strategy
1
2
3
44
Typical Questions Answered by Market Structure
• Is our brand positioning relevant to our target consumers ?
• What is the optimal spending on Marketing?
• What is the upside to additional marketing Investment?
• What is the share potential of a new brand?
• What is the critical level of investment in Marketing required to maximize a new brand introduction?
• What is the new brands likely source of volume and cannibalization?
45
Analysis of Actual Results Have Validated Media Spend Forecasts
• Even with large changes in media, has been validated. (Brand spend varied significantly - either more than doubled or spending was cut by more than 50% - from year 1 to year 2.
% Deviation from Forecast
Roughly 90% of forecasts were +/-10% from actual
5% 6%
18%
35%
18%
9%5%
3%
<-10 -9 to -6 -5 to -3 -2 to 1 2 to 5 6 to 9 10 - 13 14
46
– Market Structure suggests that the more ‘switchers’ there are between brands, the more responsive the brands should be to marketing.
– By understanding the non committed consumer base and the attributes important to them, we can Drive Incremental Trial by positioning to these consumers in more relevant ways.
0%
5%
10%
15%
20%
25%
30%
35%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100Brand B Loyalty/Share of Requirements
% of Buyers
%Buyers %Buyers influenced by Brand B Advertising
Brand A Exclusive
Advertising shifts consumers from one group to another
Consumers with Mixed Purchases
Brand B Exclusive
Driving Trial with Market Structure
47
Here’s How It Works for Spending Simulations
21.6
7.6 8.0 7.7 7.29.7
8.47.1 7.6
15.1
00 to 10
10 to 20
20 to 30
30 to 40
40 to 50
50 to 60
60 to 70
70 to 80
80 to 90
90 to100
Step 1: Identify the opportunity from “switchers” available in the market
0
5
10
15
20
25
30
35
40
45
Share opportunity from “switchers”.
Buy
er S
hare
Total Media Spend
Step 2: Estimate share/volume opportunity attainable from switchers (based on media spend)
0
5
10
15
20
25
30
35
40
45
0
100
200
300
400
500
600
700
800
900
1000
Buy
er S
hare
Gross P
rofit(M
Ms)
Total Media Spend
Step 3: Incorporate profitability
48
Reading Interaction Tables…
BRAND A BRAND B BRAND C BRAND D
BRAND A 180 102 102
BRAND B 250 85 65
BRAND C 108 80 320
BRAND D 98 100 285
Interaction tables provide snap shot of switching between products (or product attributes) when a consumer moves from one purchase to the next
ο Index of the actual switching / expected switching» An index of 100 represents brands switching at fair share» An index > 100 indicates increased likelihood (over the fair-share expected) of switching products
from one purchase to the nextο In below example, “Brand A” buyer is two and a half times (2.50X) as likely to purchase “Brand
B” on the subsequent purchase.
11stst PURCHASE PURCHASE
SUBS
EQU
ENT
SUBS
EQU
ENT
PURC
HAS
EPU
RCH
ASE
ο Increased likelihood of switching suggests perception of substitutability in the minds of the consumer
49
Key Findings
• Combination purchases represent 22% of all Transactions and a higher percentage of units.
– Partially driven by Retailer promotional Strategy– Combination purchases increased by 31% among Survey
respondents from previous to most recent purchase.
• Photochromics increased from 7% of all Combination Transactions to 10.4% of all Combination Transactions; a share increase of almost 50%.
– Consumers buying both Photochromics and Clear lenses increased faster than consumers buying both Photochromics and Sunglasses.
• It is important that Transitions participates in these types of promotions and not be perceived as a possible “cannibal” to multiple unit transactions.
50
Key Findings – Distribution Implications
• The Data indicates that consumers tend to switch between two groups of distribution channels:
– LensCrafters and Pearle Vision affiliate strongly for Photochromic lenses; The implication is that Transitions needs these outlets as consumers are seeking Photochromic lenses in these chains.
– Sears and WalMart affiliate strongly for Clear lenses
• These findings might be driven by regional presence as well as by actual consumer affiliation.
51
Key Findings
• Transitions is clearly gaining buyers (and share of buyers) in the Prescription Lens Market.
• The predominant source of buyers is CLEAR lenses due to the relative size of the buyer pool.
– But Transitions gains greater than its fair share of buyers from OTHER PHOTOCHROMIC BRANDS at a statistically significant rate
• Transitions is also sourcing greater than its fair share of buyers from Sunglasses and Contacts.
52
Affiliation Indices – Transitions affiliates significantly with other Photochromic Brands
CombinatioClear
Lenses Transitions AO PC Sunglasses Contacts
Combinatio NA 90 71 66 57 168
Clear Lenses 101 NA 98 100 141 106
Transitions 58 71 NA 136 57 42
AO PC 66 89 167 NA 81 28
Sunglasses 111 244 137 157 NA 45
Contacts 461 261 142 76 64 NA
First Purchase
Subs
eque
nt P
urch
ase
53
Total Short Sighted Blasé No Frills HMO Sharper Image
Clear 63 55 57 68 74
Photochromic 16 22 17 13 12
Sun glass 11 11 13 10 8
Contact 9 11 11 8 6
Other 1 1 1 1 0
Photochromic Transaction shares are relatively low in the HMO and Sharper Image Segments
● Acquisition is key for the Sharper Image segment as higher Transitions repeat rates make acquisition more valuable.
54
Transitions Repeat rates are consistent with other studies and are relatively high compared to premium brands in other categories
Repeat Rates
79
5263
21
45
CLEAR TRANSITIONS AO PHOTOCHROMIC SUN GLASS CONTACT
55
Blasé No Frills HMO Sharper Image Short Sighted
CLEAR 79 83 88 78
TRANSITIONS 49 50 63 53
AO Photochromic 51 74 25 69
SUN GLASS 23 NA 20 20
CONTACT 38 67 50 47
Repeat Rates by Segment show that Transitions repeat rate is highest in the Sharper Image segment
• Price point for Transitions might be impacting the HMO segment vs. other photochromic brands.
56
The HMO and Sharper Image segments will be less responsive to Marketing than the other two segments.
2833
36
22 20
Total ShortSighted
Blasé NoFrills
HMO SharperImage
Switching Coefficients
57
Optimal Spend Analysis
• Optimal Spend is merely the point on the marketing response curve where profit is optimized.
– The Marketing Response curve shows the tradeoff between share and profits.
– The amount spent on a brand should be consistent with corporate strategy; what is the brand’s role in the corporate portfolio?
– The “right” point on the curve will partially depend upon where the product is in its life cycle.
58
Optimal spend for Transitions across all segments is around $41MM
Transaction Share
Marketing Dollars ($MMs)
0
5
10
15
20
25
0 12 24 36 48 60 72 84 96 108 120 132 1440
50
100
150
200
250
Share ReturnGross Profit ($MMs)
Optimal SpendCurrent Spend
59
Optimal Spend for the Blasé No Frills Segment is about $9 MM
Gross Profit ($MMs)Transaction Share
Marketing Spend ($MMs)
02468
101214161820
1 5 9 13 17 21 25 29 33 37 41 45 490510152025303540
Share Return
Optimal Spend
60
0
5
10
15
20
25
30
0 4 8 12 16 20 24 28 32 36 40 44 480
10
20
30
40
50
60
70
Share Return
Optimal Spend for the Sharper Image Segment is about $10MM
Gross Profit ($MMs)Transaction Share
Marketing Spend ($MMs)
Optimal Spend
61
02468
101214161820
0 4 8 12 16 20 24 28 32 36 40 44 480
5
10
15
20
25
30
35
40
Share Return
The Optimal Spend for the Short-Sighted segment is approximately $12.8MM
Gross Profit ($MMs)Transaction Share
Marketing Spend ($MMs)
Optimal Spend
62
05
10152025
3035
0 4 8 12 16 20 24 28 32 36 40 44 480
10
20
30
40
50
60
Share Return
Optimal Spend for the HMO segment is approximately $9MM
Gross Profit ($MMs)Transaction Share
Marketing Spend ($MMs)
Optimal Spend
63
Allocation Analysis: Spending across segments at different overall spend levels
• The Market Structure Simulator can allocate spending across segments that will optimize share. These are the results for two spending levels: $54MM and $66MM.
– These spending levels represent different strategies in terms of profit/share tradeof.
$54MM $66MMShort Sighted 12.37 15.55Sharper Image 13.76 16.39HMO 13.08 15.53Blasé No Frills 14.80 18.53
ο The $54MM scenario would generate an incremental 10% share year over year and would grow the Photochromic segment as well.
ο The $66MM scenario would generate an incremental 14% share year over year and would grow the Photochromic segment at a slightly faster rate.
MARKETING MIX MODELING
65
Marketing Mix: Total Business Insights
66
Business Impact Overview
Total Transitions: ECP + Retail
67
Elasticity/Sensitivity% Change in Transitions Lens Sales Volume per Percent Change in Model Variable (Support)
* 2007 Analysis Result
Sensitivity is read as the percent change in Pair Sales from a 1% change in the below variable. For instance, a 1% increase in Retail Store Count would yield a 0.26% increase in Pair Sales.
68
Media and Marketing Insights
69
Wins & Losses2007 Learning 2008 Execution Impact
The increase in Partnership Agreements had a significant impact on sales accounting for about half of the total modeled TOI sales increase .
The total number of agreements continued to grow year over year, though they were correlated with the T6 Launch
Partnership Agreements and the T6 Launch accounted for more than 6% of the total sales increase of 12% in 2008.The lack of a new product in 2007
had a negative impact on sales
Consumer PR is an efficient driver of incremental sales
Consumer PR Impressions increased +161.8% partly due to increased support surrounding the PGA announcement
Cost per inc pair decreased even further from $11 in 2007 to $6 in 2008. This is a result of most of the increased support coming from the cost-efficiency of online media.
Consumer PR – Print activity drove more incremental pairs per impression than Radio, TV or Online support.
Print effectiveness decreased significantly, and execution decreased by 50%
This decrease in support resulted in a loss of approximately 16,000 pairs or 0.1% of total sales.
TV cost per incremental pair increased from 2006 to 2007
Primetime (Network/Syndicated) spots are efficient in driving incremental pairs, however, most support is Cable/All Other
Cost per GRP decreased -14.0% in 2008.
Cable/All Other support increased, while Primetime support decreased
Despite reducing support in the most efficient delivery types (Primetime) TV cost per incremental pair decreased from 2007 to 2008. This is more a result of the decreased cost per point rather than increased TV effectiveness.
70
Total Transitions – Marketing Performance
Spend(MM)
Efficiency(Cost per Inc Pair)
* Total National Media = Total TV + Consumer Print + Zenith fees + Active fees
** Includes 33% allocation of $2.3 MM Pre-sale buying program fee for Eyeglass Guide
***Directional insights
71
TV
72
Transitions – TV Performance2006 - 2008
Effectiveness(Pairs/GRP)
36 Months Ending December 2008
Efficiency(Cost per Inc. Pair)
All Other: Daytime, Morning, Overnight, Late News, Fringe
2006 2007 2008 2006 2007 2008 2006 2007 2008 2006 2007 2008
GRPs 252 383 282 433 392 374 1,360 1,395 1,782 1,044 1,040 1,234
Spend (MM) $2.5 $4.4 $3.5 $5.7 $5.4 $4.2 $5.9 $6.1 $7.1 $5.3 $4.8 $5.8
Cost Per Pt. $9,811 $11,441 $12,433 $13,195 $13,838 $11,342 $4,307 $4,338 $3,992 $5,051 $4,624 $4,708
This Year’s TV is showing strong performance vs. the prior year. The factors contributing include a stronger pair sales per GRP and a lower CPP. Prime Access Syndication is still the strongest performer per spend dollar.
73
74
Transitions – Print Performance2005 - 2007
Effectiveness(Pairs/TRP)
36 Months Ending December 2008
Efficiency(Cost per Inc. Pair)
Total TRPs 117 116 116
Total Spend $1,049,832 $2,573,937* $1,939,422 *
*Includes 1 year of allocation from “Presale Buying program”
Print performance declined vs. last year, though costs include amortized costs from eyeglass buying guide. Without those costs, 2008 performance would be in par with 2006.
75
PR
76
Transitions – Total PR Performance2006 - 2008
Effectiveness(Pairs/MM Impressions)
Incremental Volume(‘000 Pairs)
2006 2007 2008 2006 2007 2008 2006 2007 2008 2006 2007 2008 2006 2007 2008
0.5% 0.5% 0.7% 0.1% 0.2% 0.0% 0.1% 0.1% 0.1% 0.1% 0.1% 0.2% 0.2% 0.6% 0.6%% Volume Contribution
2006 2007 2008 2006 2007 2008 2006 2007 2008 2006 2007 2008 2006 2007 2008
157.9 121.8 242.1 68.7 45.2 22.7 18.6 25.3 98.0 13.7 32.4 29.3 32.1 45.1 45.6Impressions (MM)
Total Consumer PR gained vs. last year, mostly due to strong performance by TV. Effectiveness of trade PR was flat vs. last year, but declined due to increased spend per impression.
77
Solutions Team Deep Dive
78
Approach and Methodology
• Study Goal: Assess the immediate sales impact of the field sales force.
• Approach: By examining the naturally occurring instances of sales rep outage, the sales loss can be measured by a multivariate regression analysis.
• Data:– Using sales force activity as an indicator for the presence of a Solutions Team member in a
territory, Transitions coded outages as periods with no activities for a minimum of 12 weeks.
– Outages were coded as “ECP outages” or “Total Outages.” ECP outages were those in which there were no activities at ECPs but there were activities at labs in a territory.
79
Territory
Territories by Sales Team Activity
2006 2007 2008
146891319202121011141537121617185
No ECP Activity No ECP Activity
No ECP Activity
No ECP Activity
No ECP Activity
No ECP Activity
No ECP Activity
No Sales Team Activity
No Sales Team Activity
No Sales Team Activity
No Sales Team Activity
No Sales Team ActivityNo Sales Team
ActivityNo Sales Team Activity
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Continuous Activity 2006 - 2008
Transitions Total Account Activity: Total US
80
Outage
Sales from ECP Activity contribute noticeably to overall sales during periods of support. These sales are lost during sales force outage.
81
Findings
82
Total ECP Pairs Sold*
Average Weekly Pairs
Weeks with no Contact
Weekly Impact of Sales Force
Outage (Pairs)
% of Total ECP Sales Lost Territory
Territory 3 792,785 5,082 52 203 4.0%
Territory 7 406,992 2,609 49 42 1.6%
Territory 12 1,737,257 11,136 27 462 4.1%
Territory 16 857,693 5,498 21 38 0.7%
Territory 17 840,966 5,391 58 171 3.2%
Territory 18 977,010 6,263 16 54 0.9%
Total 5,612,703 5,996 162 2.7%
Impact of Sales Team Total Absence on Transitions Lens Sales
The absence of a sales rep in both the ECP and lab cost a territory 2.7% of its weekly pair sales on average.•The average length of the sales rep outage was 37 weeks.
*Based on a three year range from 2006-2008
83
Total ECP Pairs Sold*
Average Weekly Pairs
Weeks with no Contact
Weekly Impact of Sales Force
Outage (Pairs)
% of Total ECP Sales Lost Territory
Territory 2 1,212,854 7,775 19 147 1.0%
Territory 3 792,785 5,082 52 192 3.8%
Territory 7 406,992 2,609 49 57 2.2%
Territory 10 1,192,138 7,642 20 223 3.0%
Territory 11 758,801 4,864 20 100 1.2%
Territory 12 1,737,257 11,136 50 148 1.6%
Territory 14 652,585 4,183 19 64 1.8%
Territory 15 690,370 4,425 31 137 4.2%
Territory 16 857,693 5,498 21 26 0.5%
Territory 17 840,966 5,391 51 233 4.5%
Territory 18 977,010 6,263 16 63 1.0%
Total 10,119,451 5,897 126 2.1%
Examining absences just at the ECPs, the average weekly pair loss was 2.1%.•The average length of the sales rep ECP outage was 29 weeks•Comparing the 2.1% pair loss due to ECP outage with the 2.7% loss due to the total outage indicates that the majority of the sales rep impact happens through the ECP channel
Impact of Sales Team ECP Absence on Transitions Lens Sales
*Based on a three year range from 2006-2008
84
What is Total Sales Impact of Sales Reps?
Using the average weekly loss due to sales rep outages as experienced in 2008, the lost profit equates to roughly $2.5MM
55% of 2008 Total At-Market Sales (Pairs)*
% of Sales Lost During Sales Rep Outage
ECP Pairs Impact
Profit Margin per Pair
Profit Impact
7,174,013
2.7%x
x $15.77
$3,054,622
193,698
Base Case
* 55% of Total At-Market sales represents all of ECP channel plus a portion of Retail channel
85
There is evidence that as the duration of the outage increases, the impact gets more severe.
•Duration of outage explains ~30% of the differences in sales loss by market (as measured via regression analysis).• The long-term impact of the sales team appears to be greater than that seen across a 29 week average outage (Projected loss after one year is approximately 3.0%).
Territories with Periods of ECP AbsenceOutage Week
Projected Loss
0 0.91%1 0.95%2 0.99%3 1.03%4 1.07%5 1.11%6 1.15%7 1.19%8 1.23%9 1.27%
10 1.31%… …52 2.99%
86
What about long-term outages?• An extended one year outage is reflected by the profit impact measure of $2.8 MM illustrated on the right below.
7,174,013
2.99%x
x $15.77
$3,382,712
214,503
7,174,013
2.7%x
x $15.77
$3,054,622
193,698
Base Case ExtendedOutage
55% of 2008 Total At-Market Sales (Pairs) *
% of Sales Lost During Sales Rep Outage
ECP Pairs Impact
Profit Margin per Pair
Profit Impact
* 55% of Total At-Market sales represents all of ECP channel plus a portion of Retail channel
87
Total TOI Pairs Sold (M)(2006-2008)
Total Account Activity(2006-2008)
TV % Contribution(2006-2008)
Account Activity tends to have a synergistic effect with National TV - more sales team activity is associated with higher response to National TV.
88
Transitions Account Activity and National TVTransitions Account Activity and National TVTerritories with constant supportTerritories with constant support
There is also evidence that increased account activity drives better marketing performance as measured by % TV Contribution.
• An activity level of 750+ calls can achieve a synergistic effect with TV advertising• Those territories with an activity of 2000+ calls also show the highest TV contribution. • The average TV contribution of 1.4% is projected to go to 0.35% if account activity goes to zero over time, a loss of 1.05% of market sales.
89
What about synergies of Solutions Team activity with marketing factors?
•The relationship between account activity and TV contribution shows that increases in activity drive higher response to TV. • Reducing Solutions Team activity to zero would reduce TV contribution by 1.05% (2.99% + 1.05% = 4.04%).
7,174,013
2.99%x
x $15.77
$3,382,712
214,503
7,174,013
2.7%x
x $15.77
$3,054,622
193,698
7,174,013
4.04%x
x $15.77
$4,570,621
289,830
Including TV Impact
Base Case ExtendedOutage
55% of 2008 Total At-Market Sales (Pairs)*
% of Sales Lost During Sales Rep Outage
ECP Pairs Impact
Profit Margin per Pair
Profit Impact
* 55% of Total At-Market sales represents all of ECP channel plus a portion of Retail channel
90
Findings and Implications
• Avoid prolonged Solutions Teams outages.
• Work with the team to establish a visiting schedule that ensures appropriate ECP coverage.
– Ensure outages at ECPs don’t last more than a week or two.
• Explore other opportunities to capitalize on the synergy between media and sales efforts
• Continue to log activity data for further analytics
91
Retail Promotion
92
Transitions – Retail Promotion Performance
Effectiveness(Inc. Pairs/1,000 Dollars)
*Does not account for cost of coupon redemptions
$1,931,722
$53,000
$46,000
$1,311,022
$448,200
$73,500
Total Spend*
24 Months Ending December 2008
Non-Walmart NVI showed the best performance in retail promotions
93
Online
94
Transitions – Online Performance
Effectiveness(Inc. Pairs/1,000 Impressions)
Efficiency(Cost per Inc. Pair)
Spend $97,954 $446,938 $154,609
Online activities are showing a tremendous response despite a fairly low spend. Given the consideration involved with a Transitions purchase, online spend might be considered more of a channel spend rather than marketing spend. Online vehicles are often the first stop for consumers looking for further information after awareness.
12 Months Ending December 2008
95
Macroeconomic
96
Macroeconomic TrendsMacroeconomic Trends
‘07 –’08 % Change: -44.2%
2006 2007 2008
‘07 –’08 % Change: +24.1%
‘07 –’08 % Change: -1.2%US Retail Total:
‘07 –’08 % Change: +8.6%US Retail Club/Superstore:
97
‘07 –’08 % Change: -44.2%
‘07 –’08 % Change: +24.1%
‘07 –’08 % Change: -1.2%
‘07 –’08 % Change: +8.6%
Macroeconomic Impacts2007 - 2008
Total Change in Pairs(National Retail + ECP)
(Impact on Wal-Mart and Costco only)
98
Spend Reallocation
99
Budget Reallocation
• Using 2008 actual marketing spend as a baseline, there is opportunity to drive an 0.8% increase through budget reallocation.
Tactic Type2008 Actual
SpendReallocated
Spend
NATIONAL TV Consumer-Focused $20,100,000 $19,000,000
CONSUMER PRINT Consumer-Focused $1,970,000 $2,360,000
RETAIL PROMO Consumer-Focused $1,520,000 $1,820,000
NATIONAL PROMO Consumer-Focused $1,010,000 $810,000
TRADE JOURNAL ECP-Focused $620,000 $740,000
TRADE PR ECP-Focused $1,380,000 $1,650,000
ACADEMY ECP-Focused $1,770,000 $2,120,000
TRADE SHOW ECP-Focused $740,000 $880,000
POS ECP-Focused $1,640,000 $1,470,000
BBF ECP-Focused $2,714,041 $1,680,000
PAID SEARCH PR/Online $98,000 $117,000
BANNER PR/Online $450,000 $540,000
CONSUMER PR PR/Online $1,000,000 $1,200,000
TOM Tool OOH/Other $269,119 $269,000
City Tours OOH/Other $1,100,000 $1,100,000
TypeOptimal Spend Allocation
Consumer-Focused $23,990,000 65.9%ECP-Focused $ 9,164,041 25.2%OOH/Other $ 1,369,000 3.8%PR/Online $ 1,857,000 5.1%
INTEGRATED BUSINESS INTELLIGENCE RESEARCH
PUTTING IT ALL TOGETHER:
101
Transitions Business Intelligence Framework
102
Bringing the Individual Pieces Together
• Consumer Segmentation– Which consumers are my BEST customers?– How are consumers different?
• Attitude and Usage– Now that I know there are different consumers:
• Do consumers know about my brand?• How did they find out?• Can I target these consumer groups?
• Market Structure– Are these different consumer groups behaving differently?– How much behavior can I influence through marketing?– Which groups am I more likely to influence?
• Marketing Mix Modeling– Which marketing tactics worked most effectively in driving sales?– Can I allocate my spend differently by tactic to improve results?
103
Integrating Various Viewpoints
Assembling and integrating the various research techniques into one cohesive vision allows informed marketing decisions around the right target audience and the best communication vehicles.
?
104
Step 1: Optimize Total Spend Across Segments
Short-Sighted
Followers
Sharper Image
Seekers
HMO Generation
Blasé – No Frills
Total
Optimal Total Spend $13 MM $10 MM $9 MM $9 MM $41 MM
Using the Market Structure approach, it’s possible to obtain optimal spend levels across the Transitions Customer Segments:
105
Total
Consumer-Focused
$27.0MM(65.9%)
ECP-Focused
$10.3MM(25.2%)
PR/Online $2.1MM(3.8%)
OOH/Other $1.5MM(5.1%)
$41MM
Step 2: Using Total Spend, Allocate Across Tactics
Once optimal total spend is established, that can be allocated across tactics using the Marketing Mix Model results:
Short-Sighted
Followers
Sharper Image
Seekers
HMO Generation
Blasé – No Frills
Optimal Total Spend
$13MM $10MM $9MM $9MM
106
Step 3: Using Media Usage Metrics, Find The Hot Points
Short-Sighted
Followers
Sharper Image
SeekersHMO
GenerationBlasé –
No Frills Total
Consumer-Focused
$27.0MM
ECP-Focused $10.3MM
PR/Online $2.1MM
OOH/Other $1.5MM
Optimal Total Spend
$13MM $10MM $9MM $9MM $41MM
Using survey responses for how each segment became aware of Transitions, we can allocate spend across the tactics and segments.
107
Step 3: Using Media Usage Metrics, Find The Hot Points
Short-Sighted
Followers
Sharper Image
SeekersHMO
GenerationBlasé –
No Frills Total
Consumer-Focused
$7.4MM $6.7MM $6.7MM $6.1MM $27.0MM
ECP-Focused $4.8MM $2.2MM $1.3MM $2.1MM $10.3MM
PR/Online $0.6MM $0.5MM $0.6MM $0.4MM $2.1MM
OOH/Other $0.2MM $0.6MM $0.4MM $0.4MM $1.5MM
Optimal Total Spend
$13MM $10MM $9MM $9MM $41MM
Using survey responses for how each segment became aware of Transitions, we can allocate spend across the tactics and segments.
108
Improving Return on Marketing Investment
• Based on Strategic Integrated Research, target spend and tactics by segment priority
• Allocate across marketing tactics to optimize marketing spend
• Premium brands require continuous marketing spend to justify price
– Transitions can continue to spend without significantly sacrificing profits
• Extend marketing themes through distribution channels
– Leverage solutions team– Explore other opportunities to leverage creative
109
Improving Return on Marketing Investment
• Increase online focus– Drive incremental near-term sales, potentially with attractive
customer segments– Provide vehicle for response to marketing and product
research, especially important for considered purchases
• Explore more specific advertising messaging against priority segments.
• Reallocate sales force time to increase coverage against ECPs rather than labs
– Supplement sales force activity to increase coverage against ECPs
110
Next Steps
• Increase depth and scope of ECP analytics
• Continue growing data coverage across different distribution channels
• Forecast the potential volume of Transitions SOLFX
111
Transitions Awareness, Trial & Usage (ATU) Study
Wave 1- 2009
Appendix 1A - Photochromic lenses – Drivers of Behavior
112
Unaided awareness of Transitions across all consumers is associated with importance of Photochromics being clear and sunglasses in one set of lenses. Attractiveness and researching lenses on the internet become irrelevant if the aforementioned ‘convenience’ factor is met.
All Consumers
112
No Yes
No Yes
No Yes
113
Current users of Transition lenses for all consumers (as compared to non-users) are associated with greater likelihood to purchasing Photochromics in next 1 year, agree transitions is the lenses they will buy in the future and agree that they will consider what is heard/seen in ads unless they can only go to certain ECPs due to their insurance coverage
All Consumers Current Users (vs. Non Users) - I
113
No Yes
No Yes
No Yes No Yes
No Yes
Yes
114
Non users of Transition lenses for all consumers (as compared to current users) are associated with less likelihood to purchase Photochromics in next 1 year, disagreement with Transitions being a good value for money, agreement with buying eyeglasses without guarantees, and less importance of lenses being 2-in-1.
All Consumers – Current Users (vs. Non Users) - II
114
No Yes
No Yes
No Yes
No Yes
No Yes No Yes
No Yes No Yes
No Yes
No Yes
No
115
Satisfaction with Transition lenses for all consumers is associated with importance of lenses that are 2-in-1 (clear & sunglasses in 1), trust in the Transitions brand and importance of lenses being dark in bright sunlight. There is still a tendency for a consumer to purchase Transitions even if they have negative perceptions of them, as long as their ECP recommends them.
All consumers
115
No Yes
No Yes
No Yes
No Yes
No Yes
116
Consumers with intention to purchase Transitions are associated with greater likelihood to purchase Photochromics if recommended by ECP, greater importance of lenses as dark as possible in sunlight and agreement with eyeglasses making a person look more professional.
All Consumers - 1
116
No Yes
Yes
No Yes
No Yes
No Yes
No YesNo Yes
No Yes
No Yes No Yes
No Yes
No Yes No Yes
No Yes
No Yes
117
Consumers who do not intend to purchase Transitions are associated with lower likelihood to purchase Photochromics, even when recommended by ECPs, disagreement with Transitions being as dark as possible or darkening as much as they prefer, and disagreement that Transitions would be as dark as they prefer, less importance of stylishness of eyeglasses and that lenses are worth paying more for.
All Consumers - 2
117
No Yes
No
No Yes
No Yes
No Yes
No Yes
No Yes
No Yes No Yes
No Yes
No Yes
No Yes
No Yes
118
Segment 1 - Short Sighted Followers
119
Current users of Transitions in the short sighted segment (as opposed to non- users in the segment) are associated with a greater likelihood to purchase Photochromics in the next 12 months, as long as an ECP recommends them. From the pattern of the responses by non-users, it appears that about 72.5% of this segment is unfamiliar with out brand, or what it does.
Segment 1: Short Sighted Followers
119
No Yes
No Yes
No Yes Other No Yes
120
Segment 2 – Sharper Image Seekers
121
Unaided awareness of Transitions for Sharper Image Seekers is primarily dependent on ECP recommendations. Without these recommendations, then Transitions must successfully differentiate itself from other brands (have a fairly strong brand identity).
Segment 2: Sharper Image Seekers
121
No Yes
No Yes
122
Current users of Transitions in the sharper image seekers (as opposed to non users in the segment) are associated with more importance of lenses being 2-in-1 (clear and sunglasses) and more importance of lenses for outdoor use.
Segment 2: Sharper Image Seekers
No Yes
No Yes
123
Satisfaction with Transitions among sharper image seekers is associated with a willingness to pay more for Transition lenses.
Segment 2: Sharper Image Seekers
123
No Yes
124
Sharper Image Seekers who intent to purchase Transitions are associated with a greater likelihood to purchase Photochromics in next 12 months, greater agreement that they will not buy eyeglasses without guarantee, and use eyeglasses all the time.
Segment 2: Sharper Image Seekers
124
No Yes
No Yes No Yes
No YesNo Yes
No Yes
125
Segment 3 – HMO Generation
126
Unaided awareness of Transitions for HMO generation segment is associated with greater importance of lenses being appropriate for children.
Segment 3: HMO Generation
126
No Yes
No Yes
127
Current users of Transitions in the HMO generation segment (as opposed to past users in the segment) are associated with a willingness to purchase Transitions in the future and greater likelihood of purchasing Photochromics in next 12 months.
Segment 3: HMO Generation
127
No Yes
No YesNo Yes
No Yes No Yes No Yes
No Yes
128
Satisfaction with Transition lenses for HMO generation segment is associated not buying lenses without guarantee and worried that eyeglasses make them unattractive.
Segment 3: HMO Generation
128
No Yes
No Yes
No Yes
129
HMO generation segment consumers who intent to purchase Transitions are associated with a greater likelihood to purchase Photochromics in next 12 months.
Segment 3: HMO Generation
129
No Yes
No Yes
No Yes No Yes No Yes
No Yes
130
Segment 4 – Blasé No Frills
131
Unaided awareness of Transitions for blasé no frills segment is associated with greater likelihood to purchase Photochromics and need for a guarantee.
Segment 4: Blasé No Frills
131
No Yes
No Yes
No Yes
132
Current users of Transitions in the blasé no frills segment (as opposed to non users in the segment) are associated with greater likelihood to purchase Photochromics in next 12 months, agreement with Transitions maintaining the health of eyes, how others think of them because of their eyeglasses & that others care about the lenses they wear.
Segment 4: Blasé No Frills
132
No Yes
No Yes
No Yes No Yes
No Yes
No Yes
No Yes
No Yes
No Yes
No Yes No Yes
133
Satisfaction with Transition lenses for blasé no frills segment is associated with importance of lenses adapting the tint to match the level of light, agreement with lenses being worth more and lenses being appropriate for children.
Segment 4: Blasé No Frills
133
No Yes
No Yes
No Yes
134
Blasé no frills segment consumers who intent to purchase Transitions are associated a greater likelihood to purchase Photochromics in next 12 months, Transitions will improve health of eyes and willing to pay more for brand.
Segment 4: Blasé No Frills
134
No Yes
No Yes
No Yes
No Yes
No Yes
No Yes
No Yes
No Yes
No Yes
135
Appendix 1B - Photochromic lenses – Other Information
136
At least 22% of consumers who report that they use Transitions lenses are not Transitions users - They reported that their Transitions lenses were clear lenses or sunglasses.
Type of Lenses Reported For Transitions Lenses (Multiple responses permitted)
1. Weighted representative sample.2. Cq9 - When you purchased the following brand(s) of eyeglasses last time, please indicate what types of lenses it had.
Representative Sample 1
136
137
At their last purchase, 89% of Transitions lenses purchasers purchased only one pair of Photochromic eyeglasses and no other eyeglasses.
At last purchase, number/type of glasses purchased along with Transitions Current Transitions users In representative sample (Q2
‘09) 1
137
138
About 90% of consumers believe that Photochromic lenses are useful.
Overall Opinion of Photochromic Rx LensesRepresentative Sample 1
138
139
Information from April 2009 Economic Situation Survey
• About 66% of consumers claim to have had no change in their eyewear buying habits in last 12 months compared to previous 12 months, even in the current economic conditions (28% decreased, 6% increased).
• Two main demographic groups that drive the eyewear industry in the US, women and Americans over the age of 45, have continued to slow their purchases of eyewear.
• Certain demographics have been less affected - men, younger Americans, Americans from higher income households, and Americans with managed vision care coverage.
• Common approaches used by consumers to deal with difficult economic conditions, include:
– Using current eyewear for longer periods of time– Searching harder for the best value – Spending less than they have in the past– Limiting the number of units they purchase