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Confidential & Proprietary Copyright 2008 The Nielsen Company
Nielsen Training
Katz Graduate School of Business
January 16, 2009
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data
Slide 2
Agenda
Overview of NielsenData CollectionFoundation of Analysis
4 Dimensions Overview of terms,
definitions
Nitro training /demonstration
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Company Overview
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Foundation of Analysis:Retail Measurement Data
Slide 4
We are the worlds leading providerof marketingand media information, leading publisher of
business-to-business magazines and e-media and
leading producer of trade shows and conferences.
We harness the power of our informationand theexpertise of our people to help businesses of all kindsdiscover their growth opportunities through betterunderstanding of consumers, markets and industrytrends.
Who We Are
What We Do
Why We Do ItWere in business to serve businessand aim toprovide our clients with superior service and value, togrow our business profitably, and to deliver superiorreturns to our shareholders.
The World Leader in UnderstandingConsumer Behavior
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Foundation of Analysis:Retail Measurement Data
Slide 5
Nielsen Global ReachServices in over 100 countr ies
TheAmericas
Schaumburg, I ll inois
Europe, Middle East and AfricaWavre, Belgium
AsiaPacificHong Kong,
China
World HQNew York, NY
ACNielsen Presence
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Foundation of Analysis:Retail Measurement Data
Slide 6
Provides millions of people around theworld with business and professional
intelligence
Market leader with premium brands
New York (USA)
42,000 employees worldwide
$4.3 billion (2005)
Quick FactsThe Nielsen Company
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Foundation of Analysis:Retail Measurement Data
Slide 7
Our History
Founded in 1923: Arthur C. Nielsen, Sr.
Pioneered retail, media measurement disciplines
Developed concept of market share
Developed original television & radio ratings business:
Nielsen Families
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Foundation of Analysis:Retail Measurement Data
Slide 8
Our Assets & Brands are Leveraged toSupport and Grow our Partners
businesses
Client
Bus iness
Partner
http://www.tdlinx.com/http://www.claritas.com/7/27/2019 Katz Training 01.20.09
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Nielsen Client Partners
Many of the Worlds Best-Known Brands
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Data Collection & QualitySource of Scanning Information
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Foundation of Analysis:Retail Measurement Data
Slide 12
A Look at the Consumer PackagedGoods [CPG] Industry
Consumer
Manufacturer
Retailer
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Foundation of Analysis:Retail Measurement Data
Slide 13
Nielsen Collects Data fromRetailers & Consumers...
Consumer
Manufacturer
Retailer
Data
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Foundation of Analysis:Retail Measurement Data
Slide 14
Nielsen Collects Data fromRetailers & Consumers...
& sells / trades data to the
manufacturer & retailer
Consumer
Manufacturer
Retailer
Data
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Foundation of Analysis:Retail Measurement Data
Slide 15
Data Collection & QualitySource of Information
Consumer sales Retail price
Retailer SampleStores
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Foundation of Analysis:Retail Measurement Data
Slide 16
Data Collection & QualitySource of Information
Consumer sales Retail price
Retailer SampleStores
ACNielsens Field
Auditors
Display presence Custom observations(inventory
levels, facings, linear shelfmeasurements, etc.)
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Slide 17
Data Collection & QualitySource of Information
Retailer SampleStores
ACNielsen's FieldAuditors
ACNielsens
Feature Coders
Consumer sales (audit or scan) Retail price
All retailer print advertising Standardized ABC feature coding
Display presence Custom observations(inventory
levels, facings, linear shelfmeasurements, etc.)
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Foundation of Analysis:Retail Measurement Data
Slide 18
We Collect Data Across Multiple Outlets ...
Drug Stores
Gas ConvenienceStores
IndependentFood Stores
Supermarkets Mass
Merchandisers
Chain ConvenienceStores
Supercenters
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Foundation of Analysis:Retail Measurement Data
Slide 19
We Use Two Primary Methods to CollectRaw Data . . .
Scanning
and
In-Store Field Audits
Retailers provide salesand pricedata scanned purchases all UPC-coded items each week for every store included in sample
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Slide 21
Provide an overall approach to analysis of data Provide analysis tips for using facts in an analysis Determine the best fact to use in a particular situation
Provide a foundation for understanding some ofthe common differences in facts and helpdetermine the best choice for an analysis.
Goal and Objectives
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Slide 22
Accurate Data Consists of Four Parts
Periods When did it occur?
Markets Where did it happen
geography, sale territory or Retailer
Products What item(s), brand(s), flavor(s) am Iinterested in?
Facts What type of issue?
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Slide 23
Periods
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Foundation of Analysis:Retail Measurement Data
Slide 24
Periods
Monthly (4 wk) and Weekly hard-coded time periodsreside on all Heinz databasesMonthly data goes back 5 yearsWeekly data goes back 3 yearsWe also have stored several years of hard coded 52 week time
periods
Custom time periods have also been created for your use(Latest 4, 12, 24, & 52 Wks, Fiscal Quarters, etc.), built offof the monthly & weekly periodsWhen using the custom time periods, be sure to select the correct
ones for the measure you selected Monthly time periods should be used for all ACV-based measures Weekly time periods must be used for all promotion-based
measures (including ACV by promo type)
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Foundation of Analysis:Retail Measurement Data
Slide 25
Markets
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Foundation of Analysis:Retail Measurement Data
Slide 26
4 Regions & 9 Divisions for Census
Pacific
Mountain
West South
Central
West North
CentralEast North
Central
New
England
Mid-
Atlantic
South
Atlantic
East South
Central
West
Central
East
South
26
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Foundation of Analysis:Retail Measurement Data
Slide 27
West Pacific
California Oregon Washington
Mountain Arizona Colorado Idaho Montana
Nevada New Mexico Utah Wyoming
East New England
Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont
Mid Atlantic
Pennsylvania New Jersey New York
Census Regions & Divisions
Central West North Central
Iowa Kansas Minnesota Missouri Nebraska North Dakota South Dakota
East North Central
Illinois Indiana Michigan Ohio Wisconsin
South West South Central
Arkansas Louisiana Oklahoma Texas
East South Central Alabama Kentucky Mississippi
Tennessee South Atlantic
Delaware Florida Georgia Maryland North Carolina South Carolina Virginia West Virginia
27
Note: Markets Defined by US Government
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Slide 28
ACNielsen Total U.S. 52 SCANTRACK Markets
Portland
Seattle
Sacramento
San Francisco
Los Angeles
Salt Lake City/Boise Denver
PhoenixLas Vegas
San Diego West Texas/
New MexicoOklahoma City/Tulsa
San Antonio
Dallas
Houston
Omaha Des Moines Minneapolis
TampaKansas City
Little Rock
Memphis
New Orleans/Mobile
Birmingham
Grand Rapids
Milwaukee
St. Louis
Chicago
Cleveland
Detroit
Indianapolis
Cincinnati
ColumbusPittsburgh
Buffalo/Rochester
Nashville
Miami
Atlanta
Orlando
Louisville
Charlotte
Jacksonville
Richmond
Raleigh/Durham
Washington DC
Baltimore
Philadelphia
Hartford/New Haven
New York
Boston
Syracuse
Albany
Note: Markets Defined by Nielsen
E l ACNi l SCANTRACK
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Foundation of Analysis:Retail Measurement Data
Slide 29
Maps are a geographic representation at the time of development and may not reflect recent changes. Please refer to the market profile for county listings.
Example: ACNielsen SCANTRACK
Atlanta - Food
Whitfield
MurrayGilmer
Fannin Union
Towns
White
Clay
Lumpkin
DawsonPickensGordon
BartowFloyd
Chattooga
Cherokee
Cleburne
Polk
Carroll
HeardRandolph
Chambers
Harris
Troup
Meriwether
CowetaFayette
Clayton
Henry
Spalding
Pike
Upson
Lamar
MonroeJones
Baldwin
Hancock
PutnamJasper
Morgan
Greene
OglethorpeClarke
Oconee
Walton
Gwinnett
Rockdale
Newton
De Kalb
Fulton
Fulton
Douglas
PauldingCobb
CherokeeForsyth
Hall
Banks
Jackson
Barrow
Haralson
Butts
Talbot
Alabama
Tennessee
South Carolina
Georgia
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Foundation of Analysis:Retail Measurement Data
Slide 30
_______________________________________________ ATLANTA __________________________________________________________|
Supermarket Composition and | Claritas EstimatesNSUS Sample Representation | as of January 1,2004as of Mar04 | % US
Number NSUS | TOTAL POPULATION 5,905,600 2.0%Over Sample | TOTAL HOUSEHOLDS 2,163,200 2.0%$2MM Cooperation | EFFECTIVE BUYING INCOME($000) 119,291,928 2.2%
|____________________________________________________________________
Major Retail Chains |KROGER 143 YES | ACNielsen Type Food StoresPUBLIX 135 YES | ACNielsen Control EstimatesINGLES 70 YES | as of December 31,2001SAVE RITE 43 YES | Number % US ACV ($000) % USBI LO 17 YES | TOTAL FOOD STORES 2,592 1.6% $ 9,258,802 1.9%FOOD LION 13 YES |QUALITY FOODS 12 NO | STORES $4MM AND OVER 555 7,892,907
WAYFIELD FOODS 12 NO | STORES $2MM AND OVER 623 8,103,955|____________________________________________________________________|| Market by County
Wholesaler Representation | CHAMBERS AL CHEROKEE AL CLEBURNE AL RANDOLPH ALSUPERVALU YES | BALDWIN GA BANKS GA BARROW GA BARTOW GAPIGGLY WIGGLY ALABAMA DIS YES | BUTTS GA CARROLL GA CHATTOOGA GA CHEROKEE GA
MERCHANTS DISTRIBUTORS YES | CLARKE GA CLAYTON GA COBB GA COWETA GAMITCHELL GROCERY YES | DAWSON GA DE KALB GA DOUGLAS GA FANNIN GAASSOC WHOLESALE GROCERS YES | FAYETTE GA FLOYD GA FORSYTH GA FULTON GA
| GILMER GA GORDON GA GREENE GA GWINNETT GA| HALL GA HANCOCK GA HARALSON GA HARRIS GA
Wholesaler Information from | HEARD GA HENRY GA JACKSON GA JASPER GA
Trade Dimensions' Store File | JONES GA LAMAR GA LUMPKIN GA MERIWETHER GA| MONROE GA MORGAN GA MURRAY GA NEWTON GA| OCONEE GA OGLETHORPE GA PAULDING GA PICKENS GA| PIKE GA POLK GA PUTNAM GA ROCKDALE GA| SPALDING GA TALBOT GA TOWNS GA TROUP GA| UNION GA UPSON GA WALTON GA WHITE GA| WHITFIELD GA CLAY NC||| COPYRIGHT 2004 A.C. NIELSEN COMPANY 04/12/04
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Foundation of Analysis:Retail Measurement Data
Slide 31
Trading Areas & Competitive Markets
Sample/Census Trading Area: counties it includes aredefined by the particular retailer, data reported is for thatretailers stores only
Competitive Markets: all retailers within the trading areacounties that participate in the sample are included in thedata reported, this includes the trading area particularretailer sales as well
E l C t SCANTRACK T d A
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Slide 32
Maps are a geographic representation at the time of development and may not reflect recent changes. Please refer to the market profile for county listings.
Example: Custom SCANTRACKTrade Area -Cub Minneapolis
St. Croix
Wright
Sherburne IsantiChisago
Anoka
Hennepin
Carver
Scott Dakota
Ramsey
Washington
Minnesota
Wisconsin
Counties within the circle make up the trading area, all participating retailer storesfalling within those counties make up the data reported for Cub Minneapolis
CUB TWIN CITIES TRADING AREA
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Slide 33
________________________________________CUB TWIN CITIES TRADING AREA________________________________________________|
Supermarket Composition and | Claritas EstimatesNSUS Sample Representation | as of January 1,2003as of Jan04 | % US
Number NSUS | TOTAL POPULATION 3,021,600 1.1%Over Sample | TOTAL HOUSEHOLDS 1,161,800 1.1%$2MM Cooperation | EFFECTIVE BUYING INCOME($000) 73,989,445 1.3%
|____________________________________________________________________
Major Retail Chains |CUB FOODS 48 YES | ACNielsen Type Food StoresRAINBOW (ROUNDY'S) 31 YES | ACNielsen Control EstimatesBYERLYS 11 NO | as of December 31,2001
| Number % US ACV ($000) % US| TOTAL FOOD STORES 881 0.5% $ 5,124,729 1.1%|
Wholesaler Representation | STORES $4MM AND OVER 214 4,569,714SUPERVALU YES | STORES $2MM AND OVER 252 4,679,638
NASH FINCH YES |____________________________________________________________________|| Market by County
Wholesaler Information from | ANOKA MN CARVER MN CHISAGO MN DAKOTA MNTrade Dimensions' Store File | HENNEPIN MN ISANTI MN RAMSEY MN SCOTT MN
| SHERBURNE MN WASHINGTON MN WRIGHT MN ST CROIX WI||| COPYRIGHT 2004 A.C. NIELSEN COMPANY 01/23/04
Comp Market data is composed of the Major Retail Chains thatcooperate in the sample in these counties. They include only Rainbowand Cub Foods for the Minneapolis Cub Comp Market
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Foundation of Analysis:Retail Measurement Data
Slide 45
Products
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Slide 46
Product Overview
Industry Subtotals
Heinz defined aggregates based on how company views the category Only available on custom databases
Hierarchy
Nielsen defined department, category and brand aggregates across thegrocery store
Only available on Strategic Planner
Characteristics
Ability to filter through all database UPCs based on unique characteristicsof products
Ex: size, flavor, meat type, container type
Characteristic availability differs by category
Uses: UPC level output, need to create custom aggregates based onproduct characteristics when not available via Industry Subtotals
Available on all databases
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Slide 47
Facts
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Foundation of Analysis:Retail Measurement Data
Slide 48
There are a tremendous numberof facts
The difference between similarfacts is important
The application drives the
correct choice of fact There is never any one correct
fact There is always a best fact for
the specific application inquestion
Why is it important to understandfacts?
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Slide 49
Analytical Thinking
Certain mathematical toolsand calculations can be veryhelpful, but...
knowing how to use them,more so than actuallyderiving them, is mostimportant.
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Slide 50
Numbers tell you little bythemselves.
Usually you look atnumbers in terms of other
reference points Or you combine them with
other information to form aconclusion, answerquestions, set objectives,make plans, etc.
So, What Do I Do With the Numbers?
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Slide 51
Analysis TipThe Analytic PathMost issues can be addressed by drilling down this path
Issue
Base Volume Incremental Volume
Distribution Velocity
% ACV(Breadth)
# of Items(Depth)
Base Price
CompetitiveActivity
Other Factors
PromotionSupport
(Quantity)
PromotionEffectiveness
(Quality)
Level ofSupport
Promo Mix
Promo Price
Price Discount
Competitive Activity
A l i Ti P i iti K I
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Slide 52
Analysis TipPrioritize Key Issues
To set up a logical flow and to avoid analysis paralysis,
start with the higher level trends then work into theindividual drivers
Level of Detail
Category
. Segments
Manufacturers
Competitive Brands
Your Brand
DistributionEverydayPricing
TradeSupportDiscount
Total VolumeTrends
Basevs
Incremental
Base&
Incremental
DriversRecommended Level
of DetailDependent upon
level of chg
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Slide 53
Volume and Share
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Slide 54
Sales Volume
Measures the amount of product sold over a given timeperiod
Sales DollarsDollar value of total sales Sales UnitsTotal package sales Equivalent Unit SalesTotal sales on an equivalized
basis (pounds, cases, servings, etc.)
UsesTrackingRankingShare calculationsShow a brands importance to the category
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Slide 55
Share
Measures the % of salesthat a product accountsfor
Influenced by two different
measuresBrand Sales and
Category Sales
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Slide 56
What do the following salesscenarios have in common?Brand sales flat, category
declinesBrand sales up, category
flatBrand sales up a lot,
category up a little
Share Activity
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Slide 57
When to UseVolume and Share
When concerned with UseAbsolute volume;Absolute volume change
Unit, Dollar, Eq Salesvolume
Comparing performance relative to the
category or segment
Unit, Dollar, Eq Share
Relating volume to profit;Comparing across different categories
Dollar Sales
Controlling for disparate package sizes Equivalized Sales
Absolute item movement;Comparing sales to shipments
Unit Sales
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Slide 58
When concerned with Use
Analyzing category growth in a retailer or channel that is growingsignificantly.
Example: Category B grew 16% in Kroger last year. However, sinceKroger grew its total $ sales by 22%, Category B is not keeping pace
with its potential growth in Kroger.
ACV growth /Total $ RingGrowth
Analyzing mature categories that have not seen significant innovation
Examples: Categories that are considered staple items. If population
is growing at 3% a year, a staple category should see growth just bymaintaining its penetration and buying rate.
PopulationGrowth
Evaluating categories that have restricted shelf space
Examples: Frozen departments, Checkout-aisle racks, coolers
Department
Growth
Macro consumer trends affecting your category and related categories
Examples: Categories affected by Low Carb diets, Convenience,Trans-fats
EquivalizedSales
When To UseVolume Benchmarks
Use Benchmarks to compare category and brandtrends
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Slide 59
Different Ways to Look at Volume
TOTAL VOLUME
+PromotedVolume
Non-PromotedVolume
+BaselineVolume
IncrementalVolume
Th B fi f Id if i P d V
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Slide 60
The Benefits of Identifying Promoted Vs.Non-Promoted Volume
Provides an indication of what percent of a brandsvolume came from stores with a promotion.
Provides an indication of what percent of a
manufacturers deal was passed on to the consumer bythe retailer.
Retailers trade promotion execution can be observed.
A l i Ti P d V l
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Slide 61
Analysis TipPromoted Volume
Promoted volume is useful for determining
how deal reliant a brand is
Interpretation: Our brand receives a higher share of category promoted volume compared to its
share of sales Our competitors promoted volume share is under-indexed relative to its market share
Brand Share Trend
17.5
13.1
19.7
11.2
Our Brand Competitive Brand
Total Volume Share Promoted Volume Share
B li V l
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Slide 62
Baseline Volume
Normal expectedeveryday sales in the absence of anystore-level promotion
A statistically calculated measureNOT adjusted for FSIs,print, TV and market-level affects
UsesTrack the underlying health of a brand and compare it
to its competition
Analyze merchandising effectiveness in conjunctionwith incremental volume
Baseline Calc lation
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Slide 63
Baseline Calculation
week 1 week 2 week 3 week 4 week 5
170
Unit Sales
75 75 75 75
DisplayWeek
Baseline Calculation
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Slide 64
Baseline Calculation
170
week 1 week 2 week 3 week 4 week 5
Unit Sales
75 75 75 75
In Week 4 Baseline estimate would be75 units based on pre and post weeksales
75
DisplayWeek
B li V l I l d M k t l
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Slide 65
Baseline Volume Includes MarketplaceConditions that Affect Sales of a Product
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
CategoryTrends Long-Term
SeasonalityMarket-Level
Effects
BrandTrends
Baseline
R f T t l/B li V l
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Slide 66
Total volume belowbaselineCompetitive activityOut of stockSeasonal/holiday
Total volume abovebaselinePromotions or advertising not
captured by regular meansMarket-level influences (e.g.,
battery sales during ahurricane in Miami)
Reasons for Total/Baseline VolumeDifferences
I t l V l
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Slide 67
Incremental Volume
Represents the additionalpredicted volume that resultsfrom in-store promotion
Calculation:Total Actual Volume -Baseline Volume =Incremental Volume
Incremental Volume
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Slide 68
Incremental Volume
Unit Sales
In Week 4 Incremental volumewould be 95 units
170
week 1 week 2 week 3 week 4 week 5
75
DisplayWeek
95
75 75 75 75
How Can Incremental Volume Be Negative?
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Slide 69
How Can Incremental Volume Be Negative?
If actual sales are less than expected sales
Out-of-stocksCompetitive activity
week 1 week 2 week 3 week 4 week 5
Unit Sales
75 75
75
75
Actual sales are belowestimated BaseIncrementalis negative 15 units
75
170
60
Analysis Tip Base and Incremental Volume
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Slide 70
Analysis Tip - Base and Incremental Volume
Category Volume TrendCurrent 12 Weeks vs. Year Ago
(25,000)
(12,500)
0
12,500
25,000
37,500
Total FDM ex
WM
Food Drug Target K-Mart
Total EQ Base EQ Incr EQ
Interpretation: For the Food and Drug channels, an increase in Incremental EQ volume is not enough
to offset a decline in Base EQ volume. Target is showing significant growth, driven by both base and incremental volume.
Identifying whether a volume change is coming primarily frombase or incremental volume is a good way to start an analysis
Analysis Tip Base and Incremental Volume
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Slide 71
Analysis Tip - Base and Incremental Volume
Base and Incremental trends will determine potentialstrategies
Base Volume = Non Promoted Volume
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Slide 72
Base Volume =Non-Promoted Volume
Base vs. Non-Promoted Base volume estimates sales in all stores Non-Promoted volume is measured only in stores that
did not run a promotionSubset of stores
Incremental vs. Promoted Incremental volume estimates additional sales due to
promotionsVolume sold above the base
Promoted volume measures all volume sold on deal
Incremental Volume =Promoted Volume
When to Use Base Incremental Promoted
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Slide 73
When concerned with Use
Understanding the underlying health andtrends of a brand
Baseline Volume
Measuring the effectiveness and efficiency oftrade promotions Incremental Volume
Quantifying the importance of promotionalactivity to a brand
Promoted Volume
Quantifying the amount of volume sold in
stores that did not provide trade support
Non-Promoted Volume
When to UseBase, Incremental, Promoted,Non-Promoted Volume
Sales Volume is influenced by
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Foundation of Analysis:Retail Measurement Data
Slide 74
Sales Volume is influenced bySeasonality
Consumers value certainproducts more (or less) duringthe year.
Examples of seasonalityHolidays or event driven: 4th of July,Thanksgiving, Cinco de Mayo, Backto School, etc.
Seasonal: BBQ sauce and ice creamduring the summer or soup andcrackers in the winter
Seasonality Calculation
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Foundation of Analysis:Retail Measurement Data
Slide 75
Seasonality Calculation
1. Divide annual base volume by 52 to get expected weekly sales
(in the absence of seasonality and promotion).
2. Divide actual base weekly volume by expected weekly sales(just calculated in step 1) to derive a seasonality index
Battery Powered Toothbrushes
75
100
125
150
175
200
225
Jan
Feb
Mar Ap
rMa
yJu
nJu
lAu
gSe
pOc
tNo
vDe
c
Se
asonality
Index
TOTAL BASELINE-UNITS
Analysis Tips Seasonality
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Foundation of Analysis:Retail Measurement Data
Slide 76
Analysis Tips - Seasonality
Use Base Volume when calculating seasonality to negatepromotion-driven volume spikes
Be careful of moving holidays and market level effects In a category that has encountered a lot of activity 2 years
of history should be used Compare versus the year-ago period rather than a prior
period For categories with extreme seasonality look at on
season versus off season periods
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Foundation of Analysis:Retail Measurement Data
Slide 77
ACV Distribution and Velocity
Understanding the Whys to Changes in
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Foundation of Analysis:Retail Measurement Data
Slide 78
Velocity
Baseline Volume
Distribution
Base PriceSeasonality*Advertising Support*Manuf. Coupons/FSIs
*Brand Awareness/Image*Product Quality*Weather*Consumer Promotions*Sampling
Competitive:DistributionPriceMerchandising
*Advertising*Coupons
% ACV(Breadth)
# of ItemsCarried(Depth)
* Non-Nielsen measures
Baseline sales can be impacted by different market factors.
Understanding the Whys to Changes inBaseline Volume
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Foundation of Analysis:Retail Measurement Data
Slide 79
How Is Distr ibut ion Measured?
ACV Distribution
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Foundation of Analysis:Retail Measurement Data
Slide 80
ACV Distribution
ACV Distribution is a measure ofa products availability
Can be measured in terms of
breadth and depthBreadth: percent of All
Commodity Volume that carriesyour brand
Depth: number skus that are
carried in the stores that sellyour brand
What is Distribution?
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Foundation of Analysis:Retail Measurement Data
Slide 81
What is Distribution?
Distribution is the measure of the availability of a product.For an individual item, distribution depends on two basicvariables:
How many stores stock the item?
How large are those stores?
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All Commodity Volume $ (ACV) Explanation
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data
Slide 83
The 7 Food Stores
In This Market Sell
$300,000 Per Week
JONESsD) $36,000 (12%)
JONESs
A) $60,000 (20%)
SMITHsB) $48,000 (16%)
SMITHsC) $48,000 (16%)
SMITHs
A) $36,000 (12%)
JONESsB) $36,000 (12%) JONESs
C) $36,000 (12%)
SMITHs Grocery Chain
* Has 3 stor es in the mark et
doin g $132,000 per week
for a total of 44% of the ACV
JONESs Grocery Chain
* Has 4 stor es in the market
doin g $168,000 per week
for a total of 56% of the ACV
All Commodity Volume $ (ACV) Explanation
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Slide 84
If These 3 Stor es
Sold Your
Produ ct This Week,
What Would The%ACV Be?
JONESs
A) $60,000 (20%)
SMITHsC) $48,000 (16%)
SMITHs
B) $36,000 (12%)
JONESsB) $36,000 (12%)
SMITHsB) $48,000 (16%)
JONESsD) $36,000 (12%)
JONESsB) $36,000 (12%)
All Commodity Volume $ (ACV) Explanation
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Slide 85
JONESsD) $36,000 (12%)
SMITHsB) $48,000 (16%)
JONESsA) $60,000 (20%)
ANSWER:
20% ACV +16% ACV +
12% ACV = 48% ACV
y ( ) p
Breadth of Distribution -- % ACV
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Slide 86
Breadth of Distribution % ACV
% ACV Selling serves as a good weighting factor whenmeasuring distribution.All stores are not created equal Higher ACV stores serve more consumers
A measure of breadth, or reach, indicates howmany consumers have the opportunity to buy theproduct
% ACV Selling is NOT Distribution
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Slide 87
% ACV Selling is NOT Distribution
Real on-shelf distribution isalmost always higherMost products do not
sell in every store everyweek
Out-of-stocks canhappen
One other point to rememberJust because an item is authorized
at Chain Headquarters does notmean that every store actually
stocks it.
Analysis Tip - % ACV Selling
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Slide 88
Analysis Tip % ACV Selling
Brand ASales
Week1
Week2
Week3
Week4
4-WeekTotal
Store A(40% ACV)
X X
Store B(35% ACV)
X X X X
Store C
(25% ACV)
X X X
Total 40% 60% 60% 35% 100%
Average Weekly % ACV = 48%
Use longer timeframes to get the
best picture of distribution
Use 4 WkPeriods only!
Analysis Tip - % ACV Selling
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Slide 89
Analysis Tip % ACV Selling
In most cases, use the latest period when analyzing %ACV Selling
% ACV Selling7570
55
67
4 wks ending
Apr
4 wks ending
May
4 wks ending
Jun
Latest 12 wks
AVG
Represents the current state of the business Averaging longer time periods may mask more recent trends
Depth of Distribution
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Slide 90
Depth of Distribution
Depth assesses the variety of different itemsbeing sold
Cumulative Distribution Points (CDP) or Total
Distribution Points (TDP)Measures both the number and size of stores that
carry your brand and the number of sku's each storecarries
Average Number of Items HandledOn average, the number of sku's carried in the
stores that sell your brand
Use 4 WkPeriods only!
Cumulative Distribution Points (CDP)
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Slide 91
Cumulative Distribution Points (CDP)
Also called Total Distribution Points (TDP) Calculated by adding the %ACV of each individual sku
%ACV CDP
BRAND X 98% 295
Flavor 1 95% 95
Flavor 2 90% 90
Flavor 3 80% 80
Flavor 4 30% 30} Sum =295
Use 4 WkPeriods only!
Difference from %ACV
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Slide 92
Difference from %ACV
CDP shows us that while Brand A and Brand B are bothsold in 100% of the stores in this market, Brand A hasmore items available in each of the stores.
% ACV CDPBrand A 100% 2100Brand B 100% 990
%ACV tells us
breadthofdistribution
CDP tells us
depth ofdistribution
Average Number of Items Handled
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 93
Average Number of Items Handled
Dividing Cumulative Distribution Points by %ACV givesthe Average Number of UPC's Carried within those storesselling the brand.The average store in this market carries 21 upcs of
Brand A.
AVG #% ACV CDP Items
Brand A 100% 2100 21.0Brand B 100% 990 9.9
Use 4 WkPeriods only!
Analysis TipAverage Number of Items
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 94
y p gHandled
Use Average Number of Items Handled to compute aFair Share index comparing share of items to share ofsales
AVG #Items
Share ofItems
Share ofSales
Fair ShareIndex
Category 57.5 100.0 100.0
Brand A 21.0 36.5 31.0 117
Brand B 9.9 17.2 27.0 64
Interpretation: Brand Bs share of items is underdeveloped
relative to its share of sales. Potential to add additional Brand
B items to the shelf
Analysis TipCumulative Distribution Points
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 95
y p
CDPs may explain volume changes that might not be
seen when looking at % ACV
690 685 693 658
609 584
100 100 100 100 100 100
1 2 3 4 5 6Period
Distribution Points % ACV
Interpretation; The brands base sales began eroding in period 4,
yet % ACV remained at 100%. However, depth of distributiondeclined as the brand lost the equivalent of one item.
When To Use - ACV facts
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 96
When concerned with Use
Breadth of distributionthenumber of stores carryingyour product
% ACV Selling
Trending overall depth or
quality of distribution overtime
Cumulative Distribution
Points;Total Distribution Points
How many skus are carried
in stores that sell your brand;
Fair Share Analysiscomparing share of shelf toshare of sales
Average Number of ItemsHandled
Velocity
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 97
y
Measures brand strength while controlling fordistribution
Sales Per Million ACVAverage sales of a product for every million dollars of
ACV that is scannedComparisons across and within markets
Sales Per PointAverage sales of a product for every percentage point
of ACV distributionComparisons within markets only
Uses of Velocity
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 98
y
Marketing
Is my growth distribution driven or velocity driven? Velocity driven growth can be long term,
signaling consumers like your product and arebuying more.
Distribution driven growth can be limited
because soon you will run out of new stores tocarry your product.
Sales Prove your product sells faster than the competition
and deserves shelf space.
Analysis Tips - Velocity
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 99
y p y
When comparing brands with differing numbers of UPC's,use Sales Per Cumulative Points of DistributionDivide sales by CDPBrands with a greater number of UPC's will tend to
have stronger turns as more items contribute to overallsales
Use caution when tracking Sales Per Point of Distributionfor a new productDistribution will be growing as the product gains
distribution in new retailers and markets, resulting influctuating turns
CDI/BDI MEASURES
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 100
Comparison of CDI and BDI identifies product
opportunity or vulnerability by geographic area.
Category Development Index
Category volume indexed to the population indexin relation to the United states norm. (TTL US =100)
Brand Development Index Brand volume indexed to the population index in
relation to the United states norm. (TTL US =100)
CDI/BDI MEASURES
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 101
% of Total U.S. Population in Chicago: 7%
% of Total U.S. Brand A $ Sales in Chicago: 13%
% of Sales: 13%% of Population: 7% = 1.86, then multiply by 100 to derive an index = 186
This means that for every person in Chicago, Brand A $sales are almost twice as important as the average market.
Population Development IndexThe importance ofproduct sales compared to the importance of the populationin a market.
How to calculate a Development index...
Analysis TipCDI/BDI
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 102
y p
Use CDI/BDIs to prioritize market opportunities
Analysis TipCDI/BDI
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 103
y p
Calculate an Opportunity Index to further prioritize
markets
CDI BDIOppyIndex
Chicago 106 95 112
Indianapolis 159 116 137
How to calculate an Opportunity index...
CDIBDI
X 100 = Opportunity Index
InterpretationThe brand has a larger opportunity gap inIndianapolis even though both the category and brand indices areabove 100, compared to Chicago where the category is over 100and the brand is under 100
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 104
Promotion, Promotion Effectivenessand Pricing
Understanding the Whys to Changes in
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 105
Incremental Volume
Incremental sales can be impacted by different
merchandising factors.
PromotionSupport(Quantity
Incremental Volume
Promotion Effectiveness(Quality)
Level of Support Promotion Mix
Level of Price Discount
Competitive Conditions inPromoting Stores
Promotion Price
Use 1 WkPeriods only!
Promotions
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 106
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
Sales
What could cause this spike in sales?
Promotion Types
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 107
Temporary Price Reductions (TPR)A 5% discount (or more) off a
product's regular price
FeaturesPrint ad placed by the retailer
used to promote a specificproduct
DisplaysTemporary secondary stocking
location for a product
Nielsen measures three types of trade promotions
Features
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 108
Features are retailer print advertisements or other specialprinted promotions:Ads inserted in NewspapersStore Flyers / Circulars
Nielsen Feature Coders collect and classify all retailerfeatures from the entire Nielsen store sample.
The features are classified into A, B, C or Coupon Ads,based on the size of the ad
FSIs (Free Standing Inserts) are excluded since they aremanufacturer promotions
Displays
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Confidential & ProprietaryCopyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 109
Information collected for all Nielsen sample stores everyweek
Three conditions to be considered a display:Temporary secondary locationSpecial effort by the retailer to attract attention and to
boost sales of the itemContain actual merchandise accessible to the
customer.
Temporary Price Decrease (TPR)
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Foundation of Analysis:Retail Measurement Data Slide 110
Consists of those Stores/Weeks where a Price Decreaseof at Least 5% is present, but no Feature Ad, Coupon Ador Display accompanies the Price Decrease (TPR)
Lower price becomes new base price after 7 weeks
Promotion Conditions
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 111
PromotionalConditions aremutually exclusive atthe UPC level.A UPC is
either Promoted or NotPromoted.
PriceDecrease
(TPR)
Featurew/out
Display
Displayw/out
FeatureF&D
Promotion SupportUse 1 Wk
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Foundation of Analysis:Retail Measurement Data Slide 112
% ACV Promoted% of ACV that sold at least one unit on deal during the
time period
Store Weeks of SupportNumber of weeks a product is on deal weighted by theACV of the stores participating in the promotion
% Base SupportHow much of a brand's everyday business (baseline
volume) is exposed to a deal
Three ways to view Quantity of trade supportUse 1 Wk
Periods only!
% ACV SupportU 1 Wk
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 113
How much support did I receive on this event?
How much of each type of support was received? Did the retailer execute as agreed to? Did the sales force or broker support and/or merchandise
the promotion as required?
Measures the amount of consumer traffic
exposed to a promotion
Use 1 WkPeriods only!
Store Weeks Support
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 114
Measures the quantity of weeks the brand was on
promotion
Actual %
ACV ANY DSP
Week 1 20%
Week 2 100%
Week 3 60%
Week 4 30%
Week 5 50%
260% /100 = 2.6 weeks
Interpretation - Brand received the equivalent of 2.6 weeks ofDisplay activity in the five-week period
% Base Support
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 115
pp
Weights the importance of the store to the brand. Gives more credit for an important SKU
Is additive/combinable across markets, time, productsand retail conditions
Measures the % of Base business exposed to
a particular promotion type
% Base Support Calculation Example
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 116
Base Sales Promotion?
Store 1 10 NoStore 2 10 Feature
Store 3 25 Feature
Store 4 20 No
Store 5 15 Feature
Total Base Volume = 80Feature Base Volume = 50% Base Support = 50/80 = 63%
Interpretation63% of the brands base volume was exposed toa feature during the promotion period
When To UsePromotion Support facts
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 117
When concerned with Use
Level of trade participation in anevent;
Amount of consumer trafficexposed to promotions
% ACV Support
Duration of support Store Weeks Support;Cume Weighted Weeks
How much of a brands base
volume was exposed to apromotion
% Base Support
Promotion Effectiveness
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Foundation of Analysis:Retail Measurement Data Slide 118
Measures how much incremental volume eachpromotion generated
Percent Lift
Promotion Effectiveness Index (PEI) Incremental Weeks Efficiency
Promoted Baseline Volume
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Confidential & ProprietaryCopyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 119
Promoted
Non-Promoted
Incremental
Base Non-PromotedBase
Promoted Base
Incremental
that is a resultof promotion
Also Knownas
SubsidizedBase
Promoted Baseline Volume
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Confidential & Proprietary
Copyright 2008 The Nielsen CompanyFoundation of Analysis:Retail Measurement Data Slide 120
In Week 4 all the volume is
promoted, but only 95 unitsare incremental; 75 unitsare subsidized base
170
week 1 week 2 week 3 week 4 week 5
Unit Sales
75 75 75 7575
DisplayWeek
95
Promotion Efficiency
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 121
Percent of promoted sales that were incremental
Tells how efficient was the promotion What percent was incremental to baseline? What percent was subsidized?
Note: The more subsidized volume that is generatedduring a promotion the less efficient that promotion will
be!
Incremental SalesPromoted Sales
x100
Promotion Effectiveness
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 122
Promotion Effectiveness Index (PEI) Indexes Total volume to Base volume
% Lift Similar to PEI but expressed as a
percentage
Incremental Weeks Similar to Lift but expressed as a number
of weeks
Measures how much incremental volume eachpromotion generated
Promoted Sales
Promoted Base Sales
x 100
Promoted SalesPromoted Base Sales
- 1
Promoted SalesPromoted Base Sales
x 100 - 100
Analysis Tips - Interpreting PromotionResponse
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data Slide 123
Response
PEISales indexed at 227 vs. baseduring the promotion week
% LiftThe promotion drove a
127% increase in sales
Incremental WeeksThe promotion generated1.3 additional weeks of sales
Promotion Efficiency56% of the promoted volumewas incremental to the brand
170
170
75 x 100 - 100 = 127%
17075
- 1 = 1.27
week 4
75
DisplayWeek
95
95170
x 100 = 56%
17075
x 100 = 227
Analysis TipsPromotion Effectiveness
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data
Slide 124
Promotions will yield different results depending on:Type of merchandising occurring in the store - ads,
displays, TPR'sDepth of discount offered to consumersCompetitive activity
When reviewing promotion effectiveness, take intoaccount the size of the brandSmaller players, with small base businesses, have a
much easier time generating big lifts
When to UsePromotion Effectiveness Facts
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:Retail Measurement Data
Slide 125
When concerned with Use
Measuring the increase in volumedue to promotions;
Determining which promotionsgenerate the largest incrementalgains
% Lift;Promotion
Effectiveness Index(PEI);Incremental Weeks
Measuring the ability of a
promotion to minimize subsidizingexisting volume
Promotion Efficiency
Pricing
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 126
Nielsen databases track pricing in four ways:
Average Retail PriceWeighted price of a product, representing both non-
promoted and promoted prices
Non-Promo PriceAverage scanned price of a product in stores where
there was no promotion
Any Promo PriceAverage scanned price of a product in stores where
there was a promotion
Base PriceEstimate of the normal, non-discountedprice of a
product in a store
Base Price =Non-Promoted Price
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 127
Non Promoted Price isbased solely on storeswhere the item in not being
promoted
Base Price is based on allstores, not just non-promoted stores
Price Discount
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 128
Measures the differencebetween Base Price andPromoted Price
The deeper the price
discount the greater theexpectation that consumersales will increase
Average Retail Price - Precautions
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 129
Think when you average across: Products: (10, 26 and 51 oz. sizes) Markets: (Los Angeles vs. Boston) Promotions (display price vs. feature price)
Aggregate price is one big average beware!!! $2.99 =Average of $1.99 & $3.99 $2.99=Average of $0.99 & $4.99 $2.99=Average of $2.98 & $3.00
Analysis Tips - Pricing
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 130
Analyze price at the SKU levelPrices at the brand level are an average of all sizes and
multi-pack counts
Match like items when comparing price to competitionSelect similar-sized competitive items for comparisonOr use equivalized price
Use the most recent period to measure base price
Longer timeframes may mask recent trends
When to usePricing Facts
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 131
When concerned with Use
What consumer is paying on average Average RetailPrice
What is the average price for an itemwhen not on promotion
No Promo Price
What the consumer is paying onpromotion/deal
Any Promo Price
Tracking price trends;
Impact of price on baseline volume
Base Price
Magnitude of savings passed on tothe consumer
% Price Discount
Analysis Tips - RecommendationsIf Volume Change is Potential Actions
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 132
If Volume Change isdriven by:
Potential Actions
An increase in BasePrice
Increase perceived value of product
Decrease price
Increase package size
Increase use of bonus packs, special packs
Launch a product or package innovation
Improve communication of product benefits
Improve product quality
A decrease in BaseVelocity
Improve advertising
Weight, Target, Message, Media Improve consumer promotion
Frequency, Values, Types
Increase shelf presence, change item mix
A decrease in %ACV
If base velocity is competitive with brands on the shelf, conduct adistribution drive
If base velocity is low, improve velocity (see point above) to justify
increased distribution
A decrease in AverageItems Carried
Introduce new products
Change item mix
Address any Out-of-Stock issues
Analysis Tips - Recommendations
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Confidential & Proprietary
Copyright 2008 The Nielsen Company
Foundation of Analysis:
Retail Measurement DataSlide 133
If Volume Change isdriven by:
Potential Actions
An increase in PromotedPrice
Reduce promoted price
Implement a price multiples strategy (e.g. 2 for $5)
A decrease in the %ACVwith QualityMerchandising
Increase number of stores with features or displays
Determine which promotion condition works best for eachbrand / segment
Improve event timing / frequency
A decrease in the # ofPromoted Items
Identify targets for number of items on feature or displayProvide consumer incentives for purchase of multiple items
A decrease in PromotedVelocity
Improve event timing / frequency
Coordinate & integrate trade promotion with other mix elements(e.g., advertising, coupons, consumer events)
Identify stronger items for promotion
Develop promotion themes
A decrease in PromotionEfficiency
Improve event timing / frequency
Improve Customer Targeting (loyals vs. switchers)
Wrap Up
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