ASSIGNMENT 6.1 – [Retail audit & Consumer Panel][Mai Bằng – Minh Vũ]

Marketers need detailed insights into market dynamics in order to harness category opportunities and plan for the future

• Company audit specialist

• Company department manager

• Outside auditor

Who

• Done on a MONTHLY Basis

• Yearly subscriptions are bought by companies

WHAT IS A RETAIL AUDIT ?

Is a full process which systematically examines and evaluates the firms total retailing effort to measure brand performance & idealing from key objective-related findings.

When

• Urban and Rural regions

• Various Retail Channels: GT, MT, On premises, Off premises

Where How

Data is based on measurement of consumer sales from asample of outlets designed to reflect the channel beingmeasured.

The same fixed sample is audited on a monthly basis withfield auditors physically counting retail stock holdings, thenrecording store purchases from any source (warehouse,wholesaler or direct).

The ongoing measurement of these variables producesconsumer sales as well as vital in-store information.

6 MAIN POINTS IN RETAIL AUDIT REPORT

Measure Market Size & share by:• Volume/ Value sales & share• Volume/ Value share of trade

• Numeric/ Weighted distribution• Numeric/ Weighted out of stock

Average Sale Per Point of Distribution

• Retail purchases• Retail purchase share

• Stock share• Forward/reserve stock• Stock to sales ratio• Stock turnover ratio• Stock cover day

• Price per pack• Average price per unit

PURCHASE

STOCK

PRICE

CONSUMER SUPPORT

DISTRIBUTION

VOLUME/VALUE

RETAIL AUDIT

1. Improve Category Understanding: Where arethe opportunities for category growth?

2. Track Retail Performance: What is my marketshare and trends?

3. Manage Distribution: Where are thedistribution gaps and opportunities? Are out-of-stocks an issue?

4. Analyze Promotion Efficiency andEffectiveness: Which product promotions havethe most impact on the company / brandgrowth?

5. Evaluate New Launches: How much has theoverall market share grown as a result of thenew launch? What is the post-launch distributionbuild up in successful cases?

Key Objectives

Standard Report must have three part:

I. OVERVIEW ABOUT TREND OF CATEGORY

II. REVIEW BRAND PERFORMANCE

III. CONCLUSION & RECOMMENDATION

Identify potential segments/sources of growth

Nielsen identify the strong growth dominated by middle

class need for ‘Affordable Premium’ so that they do

retail audit to check & improve store performance

for better capture the consumer demand

Help business capture better the consumer demand

Sources: Nielsen Retail Audit Report 2012

Identify potential markets for expansion

Nielsen find out the opportunities to grow and

increase the profit at drinking yoghurt market (+27%)

Nielsen figure out the new trends in F&B market ( from out of home to in home

entertainment) and this is an opportunity for business to drive category further

Listerine recovered share via higher growth vs. competitors

TOP BRANDS SHARE

Source: Nielsen

• MW category decline 16% in volume while flat at 0%

mainly via price increase and premium launch

•Drive penetration but needs learning to define going with barrier or motivators

• Building trial crucial to get new users

EXAMPLE:

Panel consists of persons, households or business firms who report their purchase activities at periodic intervals

and who are selected based on a combination of their willingness and representativeness.

In a consumer panel, there is a permanent sample of respondents.

CONSUMER PANEL DEFINITION

Consumer panel different from a survey. In a survey, a fresh sample is selected In a panel research, the same panel is used again and again for the collection of information

Average number of times each buyer

purchases the brand during the given time

period

Average purchase volume purchased each

time the product is bought

Average volume purchased by buyers during the given time

period

Number of Household purchasing the product at least once during the

time period

Purchase Frequency Purchase SizeBuying ratePenetration

Purchase cycle only considers the number of purchase occasions among repeat buyers (in number of days) and gives a feel for the consumer usage rate of the product

It represents the percentage of category volume purchases among item buyers who are satisfied by that item

Percentage of buyers that make 2 or more purchases during a given time period

Percentage of Brand volume show that a panelist reported “ On Deal “E.g: Manufacturer coupons, Store coupons, Store Deals

Purchase Cycle Brand LoyaltyRepeat rateDeal Propensity

By answer these question, we can find out some key measures about

consumer in order to reach the objective

KEY MEASURES ABOUT CONSUMER

UNDERSTAND why consumers choose & switch brand Measuring short and long term purchase patterns with the effect of promotional deals Acceptance of new products How long after introduction consumers tend to buy new products

CONSUMER PANEL OBJECTIVE

Who are your consumers ?How often do they buy ?Where do they shop ?Are they loyal to your brand ?How do they respond to your marketing efforts ?Why did sales increase ? To which competitor did my brand lose share ? What caused my shares to decline ? Purchase Frequency or Purchase size ?

6 MAIN POINTS IN CONSUMER PANEL REPORT

DATA COLLECTION

AFTER SHOPPING TRIP

PURCHASE RECORDING

STORE/CHANNEL

PURCHASE HABITS AND

DEMOGRAPHIC GROUPS

BUYERS STUDY

QUANTIFICATION AND DESIGN OF

STRATEGIES

CONSUMERPANEL

• Geographically dispersed and demographically balanced

• Sample profile matches the population closer

• Demographics• Attitude and opinions• Projected to census estimates – updated – population changes

• Quantification of composition or brand volume

• Consumer purchase behavior

• Shopping habits

• Collects Consumer shopping and purchase data from all outlet channels

• Sales• Penetration• Buying rate• Switching• Purchase Frequency • Purchase size

1. Purchase information2. Date of purchase3. Age and sex of primary and secondary shopper4. Store name5. Usage of frequent shopper cards5. Complete item description through UPC(Universal Product Code) dictionary.6. 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.7. Source of the coupon – at home, at the register, elsewhere in the store8. Total shopping trip purchase amount.9. Method of payment – cash, cheque, credit card, or debit card.

Example of some main points in a Consumer Panel Report

Standard Report must have three part:

I. OVERVIEW ABOUT TREND OF CATEGORY

II. REVIEW ABOUT CONSUMER U&A

III. CONCLUSION & RECOMMENDATION

DEVELOP SHOPPER STRATEGIES BASED ON CONSUMER PANEL REPORT

Long lasting scentmakes me feel attractive ( esp under 25)One that others comment on ( esp under 25)Makes me feel seductive (esp 25-49s)Changes or enhances the mood

Change of mood (71%)Special Occasion (54%)Change of season (28%)Friend’s recommendation (16%)Popularity of scent (10%)No particular reason (15%)

In choosing to buy, 53% would tend to try a new brand47% would buy their favorite brand

25-49 know what they want but also tend to buy on impulseUnder 25 tend to exlore different scents and brandsThree out of five customers were more likely to buy a fragrance samples in a magazine ( foil pouch samples preferred)Three out of four customers say that when they find a fragrance they really like, they tell their friends about itConsumers on average buy 4 fragrance a year25-49 prefer to shop for fragrance without being bothered

Trend towards fresh, clean, flowery, fruity, citrusTrend away from marine, herbal, musky, spicy, woodyUnder 18 prefer citrus notesUnder 25 prefer fruity and flowery notes

What are consumers looking for in a fragrance

Reason for switching to a different fragrance

Purchase decision making and behaviorFragrance types and propensities

EXAMPLE: FRAGRANCE INDUSTRY CONSUMER PANEL REPORT

Get key information in report: In choosing to buy, 53% would tend to try a new brand - 47% would buy their favorite brand

Develop a shopper strategy:Trying before buying: We give the large number of new and existing brands vying for people’s

attention on- shelf and provide more opportunities for them to test our brands

NoteRETAIL AUDIT CONSUMER PANEL

Precision• Timeliness• Reduced bias : they measure product/brand movement at the

point of sale (retail level)• Sales/ competitive activities are also reported• Data is timely and readily availableAllow to generate information such as:• Product/brand sales in relation to competition• Effectiveness of shelf space and POP displays• Sales at various price points and levels• Effectiveness of in store promotions• Direct sales by store type, product location, territory and region

Continuous supply of information: Any kind of similarity or change in consumption a pattern can be easily gauged.Longer interviews are possible : as the panel members are met on an ongoing basis , the panel members can be interviewed for a longer time ( the panel members know the interviewer)Economical method: as information is collected from same consumers on a regular basis, it’s comparatively cheaper.Time savingReliable information

Advantages

Biased information : Over a period of time , the panel members may give biased answersAbsence of representative character: the small panel can never represent the entire class of consumers. Drawing conclusions based on panel readings can lead to wrong judgements.Panel members drop out : over a period of time , some panel members drop out. In such a scenario, identifying new consumers with similar characteristics is not easy.Limited cooperation: initially the panel members are very cooperative. As time goes by, their cooperation level/ enthusiasm falls.

Disadvantages

CostlyTime-consuming.Performance measures may be inaccurateEmployees may feel threatened and not cooperate as much as desired.Collection of incorrect data Management may not be responsive to the findings.

Advantages

Disadvantages