The Martec Group Confidential

1. Product Intelligence Competitor Intelligence Market Intelligence Customer Intelligence The Martec Group, Inc. Enabling Execution Through Insight Capabilities Overview Customer Intelligence Clinics C H I C A G O • D E T R O I T • F R A N K F U R T • S H A N G H A I • B E I J I N G The Martec Group Confidential

2. When your list of goals looks like a Post-It explosion… Q1 Goals Stronger price positioning Better marketing and sell-in materials Support demand creation at the retailers Provide information to retailers that they may not know about their customers Optimize product offerings, placement, and merchandising support Uncover unique segmentation perspectives

3. …Martec has a unique “one-stop shop” solution to gather a range of B2B or B2C buyer/customer insights Buyer Insights Customer Insights Purchase Occasion New Product/Concept Testing Channel/Store Selection & Loyalty Product Attitudes, Usage Customer Intelligence Clinic Planned vs. Impulse Purchases Price Elasticity Market Basket Brand Preference, Imagery and Loyalty

4. The core process involves multiple steps/methods of gathering information. • Prior to arrival, respondents complete a screening questionnaire • Serves to recruit and pre-qualify each respondent in terms of demographics and attitudinal/background information • Respondents can include end-users/customers, dealers, distributors, installers, contractors, etc. • A participant background worksheet is completed upon arrival to more fully understand shopping patterns/behavior • Preferred channels/stores; frequency of shopping; market basket, etc. • Brand perceptions captured via PC-basedexercise • Self-administered surveys are used in the product and simulation rooms • Simulated aisles; new products; new packaging concepts; new formats; etc. • Ethnographic • Merchandising and promotions testing • Respondents participate in a group discussion to fully explore attitudes/perceptions regarding the products/issues Simulation Room (simulated shopping) Product Room (hands-on product testing) VIEWING 15x26 Discussion Groups LOUNGE 11x14 CLT VIEWING 24x12 - 6 PHONE CLIENT OFFICE 12x10 OFFICE 11x9 COPY ROOM 16x14 SERVICE AREA AV 11x8 RECEPTION 24x18 VIEWING 14x17 - 6 PC-based Exercise Participant Background ENTRY

5. Case Study: Customer Intelligence Clinic - “Product X” in the Automotive Retailer Channel -

6. Project Background • Our client sells “Product X” into multiple segments, including manufacturing (food processing, oil/mining, and other areas of manufacturing) and vehicle service and repair, both DIY and DIFM (dealerships, repair shops, etc.). • Our client was developing marketing and sell-in materials for leading automotive retailers and needed to better understand what was driving customers’ purchase decisions and usage (past, current, and future) of similar products. • Client management used our information and analysis to more effectively address and impact the customer purchase decision (current and future), ultimately driving growth in this important channel. • The Martec Group was commissioned to conduct proprietary market research to assist our client with the required customer insights.

7. Research involved 200 customers of similar products, covering a variety of demographic and behavioral segments. • Conducted in multiple locations. • Selected due to representative mix of demographics along with coverage of key retailers (Advance, Auto Zone, O’Reilly’s, etc.) • Target audience: Customers who utilize “Product X” and similar products and purchase via “retail” stores • Auto retailers – Advance Auto, Auto Zone, O’Reilly’s, CARQUEST, NAPA • Mass merchandisers – Wal-Mart, Sam’s Club, Sears, Dollar Stores • Home center/hardware stores – Ace, True Value, Tractor Supply, Home Depot, Lowes • Currently purchasing or recent purchasers of these types of products • Demographics • 75% male/25% female • Variety of occupations (targeted ~25% professional trades/mechanics) • Shopping behavior • 55% of respondents “preferred” retailer = automotive retailer (remainder split between mass merchandisers and home center/hardware) • Mix of buyers – for work, for home, purchasing for family/business, etc.

8. Specific insights gathered… • Understand typical usage and purchase patterns for these products, brand(s) purchased • Preferred retailers and brands – with reasons (why do you shop at _____?) • Purchase frequency and occasion • Intended place of use and frequency • Understand the customer Decision Tree • Key purchase criteria and importance (brand, make-up/format, container size, price, etc.) • What does the end customer know about the product, how do they get their information? • Measure brand perceptions and performance • What are the drivers or triggers that cause a Customer to consider and purchase specific brands? • Evaluate new products/concepts • Current competitive set of products on hand for evaluation by respondents • Included product trial and fragrance testing • Measure price elasticity for current competitive set as well as product concepts

9. Sample Insights • Key takeaways/ insights are highlighted

10. There is significant cross-over between product usage at home and at work, particularly among men (~48%). • Predominantly an “individual” purchase – not a significant share for “family use” or “employee use”. • Also evident in attitudinal responses – don’t see much reliance on “others” for advice, etc. Which of the following best describes your purchases of these types of products within the past 12 months? Percent of Respondents

11. Purchase Occasion Insights How often do you purchase for home/work? • The more frequent buyers (weekly/monthly) are less prices sensitive, more brand loyal and prefer to shop at auto retailers. Percent of Respondents

12. Shopping Behavior Insights Please rate your level of agreement with each of the following statements regarding your purchase, and usage, of the product. One to seven scale – where one indicates completely disagree and seven indicates completely agree. Customers are purchasing from multiple stores. Although familiar with many brands, they seem to be fairly brand loyal. Percent of Respondents

13. Purchase Insights(e.g. “Impulse” and “Planned”) Which of the following best describes your purchase? • Planned buyers tend to buy less frequently; tend to shop more often at auto retailers; buy larger sizes; are more loyal to a “store” and brand Impulse buyers tend to buy more frequently; shop more often at mass merchandisers; buy smaller sizes; are not as loyal to a “store” or brand Percent of Respondents

14. Store/Brand Selection and Loyalty Insights • Approximately 55 percent of the participants “preferred” purchasing at auto retailers (AutoZone, Advance, O’Reilly’s, NAPA and CARQUEST). From which of the following places have you purchased within the past 12 months? Which is your preferred source? • Many retailers widely shopped, but a couple of clear favorites. Client didn’t realize non-auto (i.e. Wal-Mart) was so prominent. Percent of Respondents

15. Market Basket Insights When you are purchasing, how frequently do you purchase the product categories below at the same time as the product in question? @ Auto Parts Retailers @ Home Centers/Hardware Stores Customers often bundled the subject product with other products. @ Mass Merchandisers Percent of Respondents

16. Quantitative Usage Insights • Predominantly an “individual” purchase – not a significant share for “family use” or “employee use”. Which of the following best describes your purchases within the past 12 months? Percent of Respondents

17. Quantitative Usage Insights • Leading activities where the product is used… Automotive Auto repair Restore classic cars Home Improvement Initial focus was on Automotive Retailers only…research highlighted need for a dual channel strategy Painting Furniture refinish Plumbing Home repair Usage Percent of respondents that “regularly” use after this activity Gardening Camping Fishing Landscaping Motorcycles/ dirt bikes Arts & crafts Hunting Appliance repair 4x4 off road Ceramics/pottery Hiking Biking Boating/ Jet ski Snowmobiling Frequency of Activity Percent of respondents that “sometimes” or “often/regularly” participate in…

18. Key Purchase Criteria Insights Stated vs. Derived Importance Quadrant Analysis 1 2 Entry Tickets Critically Important 5 3 15 14 • Several purchase criteria were classified as “critically important” that were previously thought to be “entry tickets” 4 7 Stated Importance – Top 2-Box Ratings 6 17 18 16 8 19 10 25 9 22 20 24 11 12 13 23 21 26 Undeveloped Intrinsically Important Derived Importance (based on overall satisfaction)

19. Price Elasticity Insights Acceptable Price Range ~$4.25 to $6.50 Optimal Price ~$5.75 Analysis of multiple brands Customers consistently had higher acceptable price ranges for client brand vs. competition PME PMC

20. Additional merchandising and improved packaging for the offering are needed. • Merchandising is required to take advantage of the high percentage of impulse purchases. • Merchandising issues seem to focus less on deals (coupons, sales, etc.) and more on samples ("get them to try it") • Bundling with other products could improve top-of-mind awareness in general and specifically for our client • Multiple “baskets” are possible – automotive (cleaning, oil change, etc.); indoor home; outdoor home “I would consider purchasing a package with oil, an oil filter and a small bottle of heavy-duty hand cleaner.” • Samples are essential – meet customers at the door of the retailer with opportunities to try product • Most arrive in need of your product

21. Purchase Intention Insights How likely would you be to purchase the brand/product at the price you identified as “expensive, but still a possible purchase”? Bottom 2 - Box Top 2 - Box 36% 16% • Confirmed that there was purchase activity at the high end Percent of Respondents

22. Contacts Thank you for this opportunity. Detroit 27777 Franklin Road Suite 1600 Southfield, Michigan 48034 (248) 327-8000 Chicago 105 West Adams Street Suite 2125 Chicago, Illinois 60603 (312) 606-9690 China 121 Yanping RoadSanhe Plaza 10BShanghai 200042  China +86 (21) 6246-2121 Europe Berliner Strasse 219 63067 Offenbach/Main Germany + 49 69 80903 60 martecgroup.com