Nielsen/IRI Intro Session

1. Nielsen/IRI Intro Session

2. What are Nielsen & IRI? • Supplier of information to consumer packaged goods industry • Information supplied: • Scanner data • Manufacturer coupons & features • Manufacturer displays • Information helps companies to make more informed decisions

3. How is Data Collected? • Sample of stores (Grocery, Drug, Convenience, Mass Merch., Warehouse stores) • Scanner data • UPC info, Price, Quantity all recorded • Features • Centrally collected and coded (daily) • Displays • Collected by store auditors (1X/week)

4. 4 Data Dimensions • Market • Product • Time • Measure

5. Dimensions:Markets • Markets can be organized by class of trade, region, or both (also custom markets created by firms) • COT • Food • Drug • Mass • Combined • Region (usually dependent on company’s sales force organization, I.e. Colgate= North, South, Pacific) • North • South • East • West

6. UAP CATEGORY- Size Trend - by COT • Large sizes are increasing, small decreasing

7. Dimension: Product • The Brand? • Particular Flavor? • Particular Size? You can select more than one SKU (including competitors).

8. Product Category: Carbonated Soft Drinks Manufacturer: Pepsi-Cola Company Type: Pepsi Colas Trademark: Pepsi Colas Flavor: Pepsi Colas-Wild Cherry Diet Regular: Pepsi Colas-Wild Cherry R Caff. Free: Pepsi Colas-Wild Cherry Regular C Size: Pepsi Colas-Wild Cherry Regular Caff.12oz. 6 ct can

9. Time • Generally 2 years available in database • Broken into periods by Weeks • 52 Weeks • 26 Weeks • 13 Weeks • Months – 4 or 5 Weeks • Individual Weeks • Customizable periods • Back data available

10. Measures • Volume • Distribution • Sales • Price

11. Measure:Volume • Baseline • Normal expected volume for the product in absence of any store level promotional activity • Estimated through modeling • Incremental • The proportion of total volume exceeding expected (baseline) volume. • Incremental Volume = Actual - Baseline

12. Changes in Volume (Baseline) • Distribution Related • Velocity Related • Price • Support (coupon, TV) • Awareness/Image • Competition

13. Volume • Promoted • Sold on either • Display • Feature • Price Decrease (TPR) • Non-Promoted • Actual sales recorded for the weeks with no promotional activity.

14. 10 cases of subsidized volume (volume that would have been expected without a promotion)

15. Measure: Distribution • All Commodity Volume (ACV) • ACV Weighted Distribution • % Stores Selling • Average Weekly ACV Wtd

16. Measure: Distribution Measure: All Commodity Volume (ACV) Definition: The total annual dollar sales of all items sold. ACV can be expressed for a particular geographic area, retail outlet type (Food, Drug, Mass), key account or RMA. New York Total Market $100MM ACV New York Pathmarks $30 MM (30%) New York A&P $15MM (15%)

17. Measure: Distribution How Much Distribution Does My Brand Have? Measure: ACV Weighted Distribution Definition: The % of total ACV represented by stores where at least one of a product was scanned.

18. Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period? Answer: 30%

19. Measure: Distribution How Much Distribution Does My Brand Have Over a 4 Week Time Period? Answer: 55%

20. Measure: Distribution ACV Weighted Distribution vs. Stores Selling Over a 4 Week Time Period? ACV Wtd Distribution=40% + 15%= 55% % Stores Selling=2/4=50%

21. Measure: Distribution ACV Weighted Distribution vs. Avg Weekly ACV Weighted Distribution Over a 4 Week Time Period? ACV Wtd Distribution=40% + 15%= 55% Avg Weekly ACV Wtd Distribution=(40+55+15+0)/4=27.5%

22. (Product’s Volume in Market/Population in Market) (Product’s Volume in Total U.S./Population in Total U.S.) X 100 Measure: Sales • Development Index: Per capita sales of a product/category/brand in a particular geography indexed to per capita sales of the same product/category/brand at Total U.S.

23. Sales • CDI – Category Development Index • Measures the Category’s volume development in a market compared to the category’s development in the Total U.S. • BDI – Brand Development Index • Measures the Brand’s volume development in a market compared to the brand’s development in the Total U.S. • PDI – Product Development Index • Measures the Product’s volume development in a market compared to the product’s development in the Total U.S.

24. Sales Example: Product Development Index PDI = (.01768/.0221) x 100 = 80

25. Sales Why use Development Indices? • Help you to understand development by market • Identify needs and opportunities Guidelines for Reading Development Indices: 89 or below: Underdeveloped 90-110: Average Development 111 or above: Highly Developed

26. Sales Basic Merchandising Conditions: • Any Merchandising • Includes all types of trade merchandising • Feature • Display • Feature and Display • Special Pack • Price Reduction (5% or greater)

27. Any Display Any Feature Display Only Feature Only Feature&Display Sales Feature Only vs. Any Feature

28. Sales Merchandising Measures: • % of Volume • Percent of retail volume sold in conjunction with trade merchandising activity • % of ACV • Measures “support” • Percent of geography ACV that participated in the trade merchandising activity

29. Measure: Share • Share is a calculation based on unit, equivalized unit, or dollar volume. • Share measures • Share = (product vol/ category vol) * 100 • EQ share (EQ units = # of equivalent weighted units scanned for a product class or item) • Share change vs. year ago (point change) • This year’s share – last year’s share • Look at relationship between share changes and category volume changes

30. COT Segmentation - EQ Share • Mass is the largest and fastest growing COT 1999 Category EQ Volume by Class of Trade (% Change vs. YAG)

31. Category Dynamics -Consumer Hierarchy of Needs • Consumers choose an AP/Deo product based on a hierarchy of needs which begins with form, first and foremost 1. Form 2. Gender 3. Brand 4. Type 5. Scent 6. Size • Sticks • Gels • Aerosols • Roll-On • Soft Solids • Speed Stick • Right Guard • Lady Speed Stick • Secret • Male • Female • Unisex • AP • Deo • Scented • Unscented • Large • Small Low Transferable Demand High Transferable Demand Source: Nielsen Household Panel

32. Measure: Price • Retail price facts are gathered from: • Retailer’s tapes • Retail displays (marketing reps) • Feature ads (feature coders) • Price data is gathered separately from store movement data (if feature prices found are lower than tape prices, tape price is over-ridden)

33. Price • Price Metrics • Price per unit • Package price for all scanned sales of a particular product • Price per Equivalent Unit • The package price for all sales of a particular product divided by the custom-defined unit equivalency (i.e., price per pound) • Average price • Weighted average price for all scanned sales of a product (weighted average price for a period is computed by dividing total dollars during the period by total units sold [instead of dividing total price each week by the number of weeks]) • Non – promoted price • Actual product price in absence of a trade promotion (feature, display, tpr) • Promoted price • Price in stores with a feature, display, or tpr

34. Okay, so how does this relate to Brand Management and my job this summer?

35. So, How Does This Apply to BM? Hey Fuqua Intern, How can we sell the sales force on supporting Diet Mtn Dew? Volume % Chg vs. YAG (G/D/M) Diet Dew Diet Flavors Diet CSDs Diet Colas Source: IRI G/D/M 7/00

36. So, How Does This Apply to BM? Hey Fuqua Intern, which SKUs do we really need to get out on shelf? Channel ACV Weighted Distribution Grocery C&G Diet Dew Diet Pepsi Diet Dew Diet Pepsi 6 Pack 45% 76% 9% 43% 12 Pack 88% 99% 22% 79% 24 Pack 28% 67% NA 12% 2 Liter 92% 98% 25% 85% 20 oz 48% 87% 91% 98% TM 99% 100% 92% 100% Source: IRI ‘99

37. So, How Does This Apply to BM? Hey Fuqua Intern, Which 15 markets should we sample Diet Mtn Dew in? Source: IRI G/D/M 7/00

38. Questions?