Ddma china-market-research-credentials-f&b-q2-2015

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An introduction to Data Driven Marketing AsiaFood & Beverage Research Experience in ChinaQ2, 2015

Shanghai headquartered China-wide market research and consultancy

www.ddm-asia.com

mailto:[email protected]

http://www.ddm-asia.com/

www.ddm-asia.com Private and Confidential – Prepared for Weber Shandwick 2

Introduction to DDMAThe facts

Founded in 2002

Independent full service agency providing qualitative and quantitative market research

Headquartered in Shanghai with coverage across 28 cities in China

Clients include major multinationals, with particular strength in FMCG and retail

DDMA works closely with Chinese companies such as the China Sports Lottery and leading baijiu brands


Introduction to DDMA Business UnitsDDMA Group has three divisions working across multiple categories & disciplines

DDMA Market Research:Provides clients quantitative consumer, trade and retail distribution research across China and Asia Pacific. DDMA Market Research is best able to recruit and quantitatively research decision makers and consumers. (www.ddm-asia.com)

Focus Group China: One of largest independent qualitative research networks in China. Provides international standard research at independent agency prices. Highly experience moderators, and excellent facilities in all major China markets. (www.focusgroupchina.com)

DDMA Business Consulting: Led by a highly experienced management team of people with Fortune 500 experience our team consults on: market entry, corporate restructuring, business development and joint venture formation. Clients include private equity companies, finance groups and large scale brand owners.

www.ddm-asia.com Private and Confidential – Prepared for Weber Shandwick

Consumer Products

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Our Industry ExperienceWe bring China experience in these industries with particular strength in FMCG and Retail

Food & Beverage

Banking & Finance

Retail & Hotel

Healthcare & Government

DDMA China Market ResearchExamples of Our Work


DDMA Case Study – Norwegian Seafood CouncilIncidence Check - China

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Project Outcome: Helped Norwegian Seafood Council to understand the market in terms of consumption habits, spending, preference and image.

Project Objectives:To measure the incidence of last twelve months salmon consumption across markets and all relevant demographic subgroups. To identify the most important channels for salmon consumption and determine how these vary in importance across markets. To determine the most preferred salmon format, the incidence of sashimi consumption and the most preferred types of sashimi. To identify the key drivers of salmon consumption and the key barriers that prevent salmon consumption To highlight the key off premise retail channels for at home consumption of salmon. To measure the perceived origin of salmon in China, the awareness of and familiarity with Norway and the consumer perceptions of salmon from Norway.

Project Methodology: A total of 5,043 telephone interviews were conducted across Shanghai, Beijing, Guangzhou, Chengdu and Wuhan. All interviews were conducted via telephone. Target respondents were aged between 21 years old and 60 years old and lived in a household with a monthly income above RMB 4,000 per month


Project Objectives:

Understand the structure of the Japanese restaurant channel

Determine the type of fish these accounts sell, what the share of seafood is within the total portfolio, with particular emphasis on salmon and mackerel.

Understand the role of country of origin and its importance to restaurants and determine awareness of Norwegian mackerel versus mackerel from other countries.

Test and recommend strategy and alliance concept.

Methodology: Stage One: 2,500 Mystery shopping of Japanese restaurants. 1500 in Shanghai and 1,000 in Beijing.

Stage Two: 175 In-depth Interviews to Store Manager of Japanese restaurants.

Project Outcome: Japanese restaurants were profiled and segmented.The supply model of salmon & mackerel for Japanese restaurants was identified and mapped.On-site storage and preparation of salmon and mackerel profiled and the impact on supply chain management identified.The NORGE Logo and alliance concept was tested.

DDMA Case Study – China Salmon and MackerelMystery shopping and in-depth interviews – Shanghai and Beijing


DDMA Case Study – Silere Merino LambA three stage study for premium New Zealand Merino lamb

Methodology: DDMA recruited head chefs from 4/5 star hotels and high-end

restaurants for a three stage study consisting of pre FGDs, In

Restaurant Placement Trial, then post FGDs. Through this

research, the chefs’ opinions, preferences, and

recommendations were collected towards the concept and

product in terms of taste, aroma, texture and colour.

Project Outcome: As a result of the conclusions and recommendations Silere Merino proceeded to launch and occupies a premium position for lamb in the Foodservice category.

Project Objectives: Silere Merino was considering the launch of a range of premium lamb from New Zealand Merino sheep into the China market. DDMA was appointed to research the market structure for lamb in China, identify opportunities and recommend a strategy for launch into the Foodservice market.


DDMA Case Study – Treasury Wine Retail AuditRetail Audit - China

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Project Outcome: We checked the penetration and price point of target brands and SKUs to help Treasury develop channel strategy.

Project Objectives:To get the incidence of Treasury brands in both on premise channels and off premise channels.To gauge the price point of Treasury brands at SKU level and Brand Family level.To obtain the incidence for key competitor brands.To obtain the highest and lowest price for key competitor brands at Brand Family level.To understand the city differences in distribution for both Treasury brands and key competitor brands.

Project Methodology: A total of 3,200 mystery store visits were conducted by DDMA researchers, with 800 store visits in each city.There were 11 key distribution channels checked in each city, including international supermarket, international hypermarket, domestic supermarket, domestic hypermarket, convenience store, high-end wine stores, high-end restaurants, five star hotels, bars, chained restaurants, independent restaurants.


DDMA Case Study – Pop WeaverProduct Taste Test – Shanghai & Beijing

Methodology: We recruited 200 white collar consumers to attend a sensory test at our focus group facilities in Shanghai and Beijing. All were frequent consumers of concession popcorn aged between 20 and 35 years old. Also we researched 32 respondents for focus groups to test their consumption behavior and opinions of the test products.

Project Outcome: We determined the preferred taste and appearance profile.

Project Objectives: Our objectives were to identify the preferred taste profile for a concession popcorn in terms of overall flavor, butter flavor, crunchiness, and appearance, including kernel size. We were also tasked with identifying the ideal price level for on-premise consumption.


Project Objectives: Objectives were to measure the level of acceptance among Chinese consumers for Icelandic Glacial Mineral Water. We were also tasked with identifying preferred brand name, packaging and label design, acceptable price point, taglines and most compelling brand positioning and brand communication strategy for the brand. In addition, we were charged with measuring brand positioning relative to key competitors and identifying strengths and weaknesses relative to key competitors.

Methodology: We conducted a total of 24 focus groups were across four key markets. We recruited white collar respondents aged between 25 and 45 years old. All respondents were current buyers of premium bottled water.

Project Outcome: We determined final brand name and brand positioning as well as pricing strategy for various different SKUs.

Brand communication strategy was finalized as a result of this research and Icelandic Glacial was successfully launched in Shanghai and Beijing in mid-2010.

DDMA Case Study - Icelandic Glacial Mineral Water Brand & Packaging Evaluation – Shanghai, Beijing, Guangzhou , Chengdu


DDMA Case Study - V&S Group/Absolut Vodka New Product Development - China

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Project Objectives: V&S(Absolut Vodka) commenced a project to identify potential opportunities within the Chinese domestic baijiu market.

Methodology: Our team conducted extensive market and industry research among consumers, business leaders in producer and distributor companies and senior government officials. The result of this research was the identification of several key opportunities within the baijiu category. As the project moved forward we held direct negotiations with over 20 leading baijiu producers. From this process three potential partners were identified. Negotiations progressed with one key company and a joint venture was formed in 2007. In addition, two new baijiu brands were developed, and are the property of the joint venture. The first of these is a super-premium baijiu that has won awards for taste and design. The second is a completely new type of baijiu for young drinkers.

Project Outcome: The joint venture has been successful in the development of new brands and demonstrated that the new brands have high potential in the market. These brands are imbedded in and sold through the Pernod Ricard China network.


Project Objectives: Objectives were to Develop a new and fashionable baijiu for Chinese consumers, determine brand name, packaging, advertising concept, tagline design and price point for Purfeel 21. We were charged with measuring channels Purfeel 21 is perceived as being most suitable to be consumed in and on which type of drinking occasions Purfeel is most suitable for. We also were responsible for testing which flavor is most liked by Chinese consumers.

Methodology: We held 48 focus groups across four key markets. In addition, our team invited 150 respondents to Chinese restaurants for taste testing and perceived suitability testing. We recruited 300 respondents to participate in our online research.Target respondents were white collar consumers aged between 25 and 40 years old and drink baijiu at least once every three months.

Project Outcome: Our research determined final brand name, packaging, tagline and key advertising concept. Pricing strategy for on-premise and off-premise channels was completed. We determined most popular flavors among target consumers. Purfeel 21 was successfully launched in Shanghai market in December 2009.

DDMA Case Study – Purfeel 21 BaijiuBrand, Taste, Packaging & Advertising Evaluation – Shanghai, Beijing, Guangzhou , Chengdu


Product Concept, Brand & Packaging Evaluation, Taste Test – Shanghai, Beijing, Guangzhou , Chengdu

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Project Objectives: Objectives were to identify an appropriate modern baijiu product concept that meets the needs of modern successful Chinese business people. We were tasked with measuring the acceptance of Tianchengxiang’s taste, packaging design and brand name. Our team was also responsible for testing the most suitable drinking occasions as well as ideal price relative to competitors.

Methodology: A total of 48 focus groups were conducted across four key markets. Target respondents were aged between 30 years old and 50 years old. All respondents were current premium baijiu drinkers and consume baijiu most often in business occasions.

Project Outcome: Based on target consumer insight attained through the research process a complete brand positioning, brand value and brand vision was developed.Final brand naming and packaging was determined. Pricing strategy for various different SKUs was determined. Brand communication strategy was finalized as a result of this research and Tianchengxiang was successfully launched in Chengdu and Shanghai.

DDMA Case Study – Tianchengxiang Baijiu



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Other Relevant DDMA Case Studies A selection of other projects that DDMA Management and DDMA have conducted

Budweiser – Anheuser Busch: China and North Asia DDMA has conducted multiple projects in the areas of new product and brand development, brand positioning and the development of brand communication strategies. DDMA and DDMA management have worked with Anheuser Busch for over 20 years in Asia.

Johnson & Johnson: Asia Pacific DDMA management led the new product development research for Johnson and Johnson for many years across Asia Pacific markets. The specific area of specialization was in new product idea screening. Once the winning ideas were identified, these ideas would then transition into the formal new product development process.

Brown Forman – Jack Daniel’s: China and North AsiaDDMA has worked with Brown Forman for over 12 years in China and North Asia. Our research work includes new product development and brand positioning and communication research across multiple product categories including ready to drink cocktails, full strength American whisky, aged American whisky.

Multiple retail projects – China. DDMA has also conducted multiple research and research based strategy development projects for leading online and offline retailers in China. Clients include Tesco Express, Walmart, 7-11 China, Reliance Retail of India and Yihaodian – the largest online supermarket in China.


Relevant Client References - Food and Beverage in China

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Over a 10 year period DDMA have delivered major customer insight and Market research projects for me.The briefs have originated from China, India and Thailand and required an in depth knowledge of both the originating market and the target market of China. DDMA have always delivered to brief, on time and given high quality, valuable and actionable insight and recommendations.DDMA are a truly first class team that deliver first class results and I look forward to many more successful years of working togetherBig C Supercenter Public Co Ltd, President and CEO Rob Cissell

I have worked with DDMA for more than 3 years on numerous projects. The projects has included a whole variety of tasks, from classic focus groups and quantitative research to complex restaurant U&A studies, product pre-launch studies and complicated value chain analysis. DDMAs strengths are decomposing the client’s needs, high analytical skills, and a flexibility to set up the research design far outside classic research products in order to meet the client’s needs. DDMA is our preferred research company in China, and it is a pleasure to work with their team.Norwegian Seafood Council, Director of Mainland China and Hong Kong, Sigmund Bjørgo

Over the years, DDMA has proven to be an extremely valuable partner in helping Jack Daniel's develop its consumer brand building platform in China. No one knows the Chinese alcohol beverage market better than DDMA. They have assembled an exceptional team, which is the key ingredient to delivering exceptional consumer and market insights.Jack Daniel's (Brown Forman), Global Director Consumer Insights Daniel Schapker


Overview of the food market in China – 1

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Repeated food scandals and changing buying behavior have created great opportunities

With an established middle class, growing disposable income levels and repeated food scandals, demand and consumption of imported foods has increased greatly. Core reasons for growth are listed below and should be imbedded inside the core positioning for a foreign food brand, particularly the no additives and the origin. In addition, shopping behavior is changing with increased purchase in international retail channels, convenience stores and in particular, online supermarkets.

Source: DDMA China Market Research -

Changing Chinese Consumer Survey – Wealthy

Chinese Household Grocery Decision Makers –

n=550. January 2015


Overview of the food market in China –2

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EXAMPLE - The UK origin is a strong positive and should be emphasized – this will help justify price

An earlier DDMA study on the impact of country of origin on food from selected companies revealed that England is the 6th most favorable origin for foreign foods among Chinese consumers.

Some core attitudes to foreign food purchase, especially the level of research that goes into the purchase decision are also relevant to the international food marketing challenge.

Source: DDMA Food Safety and Opportunities for Foreign Brands in China Food Market – Jan 2014



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Example of impact of country of origin on acceptable price levels with Chinese consumers

65

75

85

95

105

115

125

135

145

25% 30% 35% 40% 45% 50% 55% 60% 65%

Norway

USA -

Alaska

Canada

Australi

aNew Zealand

United Kingdom

China

Japan

Argentina

Russi

a

Price

Willing to

Pay per 500g

(CNY)

% of consumers that will definitely buy at this price level

Impact of country of origin on acceptable price levels per 500g of seafood & purchase intention at acceptable price point

DDMA – Changing China Consumer Series - January 2015

A recent DDMA study demonstrated the impact of country of origin on the acceptable price levels and purchase intention among Chinese consumers.

A standard seafood concept was tested across a panel of consumers. The only variable that was changed during testing was the country of origin. This test demonstrated that seafood from certain countries or regions – such as Norway or Alaska – could command a very high premium price point relative to the exact same seafood offering from China and a selection of other countries.

Source: DDMA China

Market Research -

Changing Chinese

Consumer Survey –

Wealthy Chinese

Household Grocery

Decision Makers – n=550.

January 2015



Online Supermarkets are a very important channel and not just from a sales perspective

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73%59%

57%57%

53%43%43%43%

39%37%

Snacks - such as potato chips

Coffee

Fresh Fruit

Dairy Products (including…

Cooking oil

Fruit Juice

Tea

Rice

Soft Drinks (such as cola)

Frozen Beef

Top Online Grocery Purchases Over the Last Three Months –

Wealthy Chinese Households - January 2015

Statements on Imported Food , Overseas Processing and Overseas Packaging – Wealthy Chinese Households - January 2015

Statements on Imported Food %

StronglyAgree

I will pay more for imported food than Chinese produced food

75%

I will pay more for food that is processed overseas, not processed in China

65%

I will pay more for food that is packaged overseas, not packaged in China

64%

Source: DDMA China Market Research - Changing Chinese Consumer Survey – Wealthy Chinese Household

Grocery Decision Makers – n=550. January 2015

International Hypermarkets – almost 40% of wealthier Chinese households purchase imported food and groceries in this channel at least once a week.

Online Supermarkets – almost 30% of wealthier Chinese households purchase imported food and groceries in this channel at least once a week. However, this is the most often used channel for the purchase of imported foods among almost 40% of wealthy Chinese households.


DDMA Reports on Food Safety – Extract

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DDMA tracks the changes in food safety concerns among Chinese consumers


Retail Audit and Penetration Check across 3,020 Off premise accounts – China

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Treasury Wine Estates – Report provided via DDMA Online Reporting Platform

The key objectives were:

• To get the incidence of Treasury brands in both on premise channels

and off premise channels.

• To gauge the price point of Treasury brands at SKU level and Brand

Family level.

• To obtain the incidence for key competitor brands.

• To obtain the highest and lowest price for key competitor brands at

Brand Family level.

• To understand the city differences in distribution for both Treasury

brands and key competitor brands.


Retail Audit and Penetration Check across 3,020 Off premise accounts – China

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Complete data profiles provided down to individual account level

Incidence, presence and pricing provided per brand, SKU, brand family and price segment

All data in searchable format – city, channel, district

Each store location mapped and contact details of retail management provided


Retail Audit and Penetration Check – Frozen Seafood

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Focus on key off premise retail channels – final sample of 275 stores completed

Methodology: A total of 275 retail stores were visited across five key markets and five key retail channels. The channels selected were based on research results with consumers and reflected the main channels were consumers buy deep sea white fish.

The core research objectives were to:

Measure the incidence of selling deep sea white fish across retail channels

Identify the most prominent type of deep sea white fish that was available

Measure how this deep sea white fish was presented to Chinese consumers in terms of naming, branding, species, packaging, SKU size and format

Research took place during the first two weeks of August 2014 .



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Focus on key off premise retail channels – data on 420 SKUs collected

Incidence by category and brand recorded

Category and brand profiles developed

Analysis conducted on price point, package type, origin, format and SKU size and format included in report



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Brand profiles included

Detailed brand profiles included

Report included price point, distributor details, promotional activity


Route to Market – Frozen Seafood

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Distribution and route to market mapped – 150 interviews with distributors and retailers conducted

Distributor and Retail interviews allowed for a detailed route to market overview to be developed

Cross referenced with retail volumes.


Price Trees – Frozen Seafood

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Margin Pool calculated based on distributor and seafood interviews

Margin pools and price trees developed on a per channel basis


Route to Market – Domestic White Spirits – China

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Route to market based on 220 interviews with distributors, retailers and HORECA

Designed to provide an overview of the route to market for domestic spirits in China


Price Trees – Domestic White Spirits – China

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Based on interviews with distributors and retailers of competing brands

Price trees allowed brand owner to compare planned margin pool to key competitors


Seafood – Building a Database of Potential Distribution Partners

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Study based on interviews with 472 companies in China


Recommended Distributor Profiles

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Those that met pre determined criteria as potential distributors were profiled in detail

Company Profiles & Contact Details Business Scope and Categories Management & Trading Terms


Recommended Distributor Profiles

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Profiles included retail coverage, in store activities and examples of products distributed

Range of Products

Key Accounts and

Retail Coverage and

Activities

Range of Products Range of Products

Market Research

Facilities and Capabilities


Qualitative Research Capabilitieswww.focusgroupchina.com

DDMA in-house qualitative unit Focus Group China provides our clients the following services:

Focus Groups

Mini Focus Groups

In-Depth Interviews

Buddy Groups

Observational and Mystery Shopping

http://www.focusgroupchina.com


Qualitative Research Capabilitieswww.focusgroupchina.com

Our qualitative team of moderators are highly experienced and employ some of the most advanced projective techniques.

Our recent qualitative projects include:

Online Purchase Behavior Studies

Brand Positioning and Repositioning Studies

Communication and Advertising Evaluation and Testing

Concept Screening and Testing

Customer Needs Mapping

Industry Process and Performance

Mystery Shopping

New Product Development

Senior Management/Executive Interviews

http://www.focusgroupchina.com


Qualitative Research Facilities across ChinaMost advanced facilities in Shanghai and coverage across China

Focus Group China research facilities across China offer clients:

Spacious city-center focus group rooms

Seamless online viewing system allows clients to observe and interact with focus groups in real-time from anywhere in the world

Large capacity client viewing rooms with one-way mirror and comfortable client lounges with refreshments

Shanghai headquarter facilities are the most advanced in the market, and are fitted with high-end Logitech and Sony AV equipment


Quantitative Consumer and Trade Researchwww.ddm-asia.com

DDMA Market Research provides data collection capabilities, and conducts large scale consumer, trade and research projects across China, and in other Asian markets. DDMA Market Research uses a variety of different methodologies in our data collection operations including :

Telephone Interviewing

Face to Face Interviews via Central Location, Door-to-Door, and Street Intercept

Mail & Online Surveys

Hall Test

http://www.ddm-asia.com


Quantitative Consumer and Trade Researchwww.ddm-asia.com

Recent quantitative research projects conducted by DDMA Market Research include:

Retail and Channel Evaluation Studies

Retail Audits

Retail Census

Brand Usage and Awareness Studies

Brand and Product Switching Studies

Concept Test

Taste Test

Packaging Test

Advertising Test

http://www.ddm-asia.com


Full China CoverageWe manage research across China from 28 Research Centers

We conduct research in:Shanghai Headquarters

BeijingChangsha Chengdu Chongqing DalianFuzhou Guangzhou GuiyangHaerbinHangzhou HaikouHefei Jinan Kunming

Lanzhou NanchangNanjing NingboQingdao ShenyangShenzhenTaiyuanTianjin WuhanWulumuqi Xiamen Xian