FDIN Packaging Conference Creating Love at First Sight Pack OxyGen

1. FDIN Packaging Conference Creating Love at First Sight Pack OxyGen Chris Sinclair, Managing Director 30th APRIL 2009 News www.fmcgenews.co.uk Views www.twitter.com/oxfordresearch Web www.tora.co.uk Phone +44 (0) 1865 72 82 72

2. The Oxford Research Agency • 27 years in NPD • Databases for concepts, packs, products and volumetrics • Team of 50+ researchers • Ex- Nestle, Kellogg, Boots, Reckitt Benckiser, Marks & Spencer, Bases, Ipsos, Milllward Brown, AC Nielsen • Experience in every FMCG category • Research conducted In-home, in-hall, in-store, online, worldwide • All logistics in-house • Distribution, de-branding & re-packing, etc • Online, f2f, chilled, frozen, fresh, ambient • All DP, Fieldwork and Online in-house

3. Two Companies with One Shared Vision Qual Quant Deliver the best NPD possible for our clients

4. ROI throughout NPD Most, if not all stages, feature packaging

5. Packaging is the most under-rated part of the NPD process • Significantly improving the appeal of your pack increases sales • The equivalent as spending £1.8m on ATL Advertising • Pack change can seriously damage your brand • - 80% change in sales recorded • But positive effects can be seen • Up to +50% increases seen when improving a poor design Launching new packs with confidence needs excellent market research

6. In the last 18 months, we have tested over £2bn worth of pack designs

16. To Create Love at First Sight • How research helps both pack designers and clients alike • The Pack OxyGen approach and its development • Learning from real case studies • Identifying the impact on sales from changing a pack • Our Top 10 Packaging Golden Rules

17. The pack has many roles Sales tool Research should measure this

18. This is where the battle liesDecisions made here will make or break your product

19. Pack Designers don’t need Research to tell them how to do their jobs !

20. The audience for packaging research is many • We spoke to Clients and Design Agencies • Identified that Clients and Pack Designers have different needs from Packaging Research

21. Different elements from the research needed for clients and pack designers Client • Purchase intent • Winning design • Sales/ volume • Pack diagnostics • Brand Equity • Usability • Differentiation between flavours • Shelf Standout • Potential improvement routes • Changes in brand equity • Feedback on • Purchase intent • Standout • Flavour identification • Generally do not want consumers/ respondents to tell them directly how to do their job ! Pack Designers

22. Consumers are Consumers • They are excellent at telling us what they like and dislike • They know what they want to buy • They know when they see a great pack • Stimulus is needed

23. Consumers are not pack designers • They are not equipped with the tools, brand knowledge or the background to design the pack for you • Research must reflect this and not ask consumers to be designers

24. Research needed at different stages of pack development

25. Pack OxyGen Approach Pack OxyGen

26. 1. Learning from consumers, in-store • In-store observation & filming • Interviewing at fixture, post purchase • Examining other categories for new packs, designs, etc • All conducted on film, with designer and client in attendance if possible In-store Understanding Outputs feed into Packaging Design Brief

27. 2. Pack Enhancement Focus Groups • Development and screening of packs • Used to enhance early designs • Shelves to test different colours • Packs with different communication • Structural changes to test ease of use, for instance • Move from Glass to Plastic to test Worth • Different fonts, icons, etc • Communication of flavour, freshness, variety, etc • Attendance of all involved aids learning and development of final packs Pack Enhancement Focus Groups

28. 3. Volumetric Pack Test • Conducted either face to face or online • 2 cells – Current and New, tested monadically • Volume output optional • Product placement when structure has changed Recruitment & Qualification Volumetric Pack Test Shelf Standout KPI’s Pack Hot Spots Pack Diagnostics Flavour identification Fit with Brand/Food Product Communication Brand Equity Optional Placement

29. Volumetric Pack Test • Developed from our Volumetric Model • Over 3,500 tests and 640+ Validations • Every study includes packaging and the competitive set • Identifies • The overall sales impact of the pack change, in sales and units • Standout in the competitive set • Changes in Brand Equity • Packaging Hot Spots • Research provides the guidance needed for improving the pack design further

30. Volume Impact of Pack Green & Red significantly improve volumes over current 30 (vs Current) (+51%) (+47%) Brand Value (million £) 17.3m 16.8m 11.4m Volume (millions of units) Green Red

31. Better Packaging Can Save You Money • In research, pack performance = Good • Launched with inferior pack, reducing volumes by 19% • Investing £1.8m in advertising to get the same volume generated by a ‘Good’ pack £1.8m Ad spend Pack Visibility

32. Volumetric Pack TestMeasuring Standout

33. Shelf Standout measured by stopwatch

34. Stopwatches Measure Time, Not Sales ! • Current ‘found’ in 4.7 seconds • New ‘found’ in 3.2 seconds What does this tell us? • Importantly, should we launch our design based on this information?

35. Never use stopwatches in pack researchit will serious damage your sales • No proven relationship between how fast you can find a product on-shelf and in-market volume • “Packs with improved ‘speed to find’ in the majority of cases do not generate more volume. Our experience has shown that 1/3rd increase volume, 1/3rd stay the same, and 1/3rd lose volume” – Head of Research, FMCG Client

36. Measuring Standout - Online Which brands do you remember?

37. Spontaneous Shelf Standout Current Pack Shelf New Pack Shelf SPONTANEOUS RECALL FROM DISPLAY % % Spontaneous Recall from Shelf linked to sales improvement

38. New design brings more natural, fresh and wholesome attributes New Design Old Design % % BASE: (All respondents)

39. Examining Packs in Detail

40. Hot Spots aids interpretation of the pack design Likes Dislikes

41. 3. Volumetric Pack Test • Conducted either face to face or online • 2 cells – Current and New, tested monadically • Volume output optional • Product placement when structure has changed Recruitment & Qualification Volumetric Pack Test Shelf Standout KPI’s Pack Hot Spots Pack Diagnostics Flavour identification Fit with Brand/Food Product Communication Brand Equity Optional Placement

42. Learning from the marketCase Studies

43. Case Study: Macleans Toothpaste Relaunch 2004

44. Macleans: Re-Launch Packs, 2004

45. Macleans RelaunchSubstantial Change

46. Macleans Launch: What Happened? • Over 8 months a substantial fall in volumes • Over 70% Why? • The new pack lost its identify • Consumers unable to find it as Macleans ‘disappeared’ on the shelf • Brand Equity lost • Category signposts on the pack were removed • Toothpaste, cleanliness, etc • Pack became ‘Own Label’

47. Cathedral City • Volume declined through: • Pack broke category sign posts - not seen in the real fixture • Zip design made pack ‘Floppy’, hiding brand name • The repair strategy • Heavy sales promotion using Gondola ends and BOGOF • Design has been a huge success, but costly in the initial launch phase

48. Design changed to boost equity and standout under threat of Branston Beans Heinz website states that 10.5M labels printed each week (273M over 26 weeks) If the increased cost of label, for example, was 0.0002p, cost in 6 months of the design change is £54,600 in labels Need to sell 120,000 extra tins of beans at 46p to pay for the change... Heinz Baked Beans

49. The 10 Golden Rules for Packagingfrom a research perspective

50. 10 Golden Rules for Pack Testing • When did you last change? • Consumers are not pack designers • Evolution not revolution • Kill the beauty parade • Measure real standout & avoid stopwatches • There is no pot of gold at the end of the rainbow • Brand equity is king • Your pack is your everyday sales tool • Test structural changes in-home, in the hand • Protect your brand and measure sales impact of the new pack