Nielsen/IRI Intro Session

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

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 Data Dimensions

• Market

• Product

• Time

• Measure

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

UAP CATEGORY- Size Trend - by COT

YTD 00 YAG % Chg 3-O Small 46% -5% Large 54% +10%

Food Small 54% -9% Large 46% +10%

Mass Small 37% -3% Large 63% +12%

Drug Small 53% -1% Large 47% +7%

•Large sizes are increasing, small decreasing

Dimension: Product

• The Brand?

• Particular Flavor?

• Particular Size?

You can select more than one SKU (including competitors).

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

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

Measures

• Volume

• Distribution

• Sales

• Price

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

Changes in Volume (Baseline)

• Distribution Related

• Velocity Related – Price– Support (coupon, TV)– Awareness/Image– Competition

Volume

• Promoted– Sold on either

• Display

• Feature

• Price Decrease (TPR)

• Non-Promoted– Actual sales recorded for the weeks with no

promotional activity.

Comparison of Promoted and Incremental Volume

60

40

50

50

0

20

40

60

80

100

120

Base & Incremental Promoted & Non-Promoted

Base Incremental Promoted Non-Promoted

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

Measure: Distribution

• All Commodity Volume (ACV)

• ACV Weighted Distribution

• % Stores Selling

• Average Weekly ACV Wtd

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 YorkA&P

$15MM (15%)

Measure: DistributionHow Much Distribution Does My Brand Have?

Measure: ACV Weighted DistributionDefinition: The % of total ACV represented by stores where at

least one of a product was scanned.

ACV Brand X Brand Y

Store A $30 MM X

Store B $40 MM X

Store C $15 MM X

Store D $15 MM X

Total Mkt $100 MM 70% 30%

Measure: DistributionHow Much Distribution Does My Brand Have Over a 4 Week Time Period?

Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total

Store A 30% X X X X 30%

Store B 40% 0%

Store C 15% 0%

Store D 15% 0%

Total Mkt 100% 30% 30% 30% 30% 30%

Answer: 30%

Measure: DistributionHow Much Distribution Does My Brand Have Over a 4 Week Time Period?

Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total

Store A 30% 0%

Store B 40% X X 40%

Store C 15% 0%

Store D 15% X X 15%

Total Mkt 100% 40% 55% 15% 0% 55%

Answer: 55%

Measure: DistributionACV Weighted Distribution vs. Stores Selling Over a 4 Week Time Period?

Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total

Store A 30% 0%

Store B 40% X X 40%

Store C 15% 0%

Store D 15% X X 15%

Total Mkt 100% 40% 55% 15% 0% 55%

ACV Wtd Distribution=40% + 15%= 55%

% Stores Selling=2/4=50%

Measure: DistributionACV Weighted Distribution vs. Avg Weekly ACV Weighted Distribution Over a 4 Week Time Period?

Store %ACV Wk 1 Wk 2 Wk 3 Wk 4 4Wk Total

Store A 30% 0%

Store B 40% X X 40%

Store C 15% 0%

Store D 15% X X 15%

Total Mkt 100% 40% 55% 15% 0% 55%

ACV Wtd Distribution=40% + 15%= 55%

Avg Weekly ACV Wtd Distribution=(40+55+15+0)/4=27.5%

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.

(Product’s Volume in Market/Population in Market)

(Product’s Volume in Total U.S./Population in Total U.S.)

X 100

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.

Sales

Example: Product Development Index

Sales Population Sales/Pop.

NY Mkt. 150,000 8,484,000 .01768

Total U.S. 4,550,000 206,000,000 .0221

PDI = (.01768/.0221) x 100 = 80

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

Sales

Basic Merchandising Conditions:• Any Merchandising

– Includes all types of trade merchandising

• Feature • Display • Feature and Display• Special Pack• Price Reduction (5% or greater)

SalesFeature Only vs. Any Feature

DisplayOnly

FeatureOnly

Any Display Any Feature

Feature & Display

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

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

COT Segmentation - EQ Share

Mass is the largest and fastest growing COT

1999 Category EQ Volume by Class of Trade(% Change vs. YAG)

Food34.4%(-1.3%)

Mass46.3%

(+2.0%)

Drug19.3%(-0.7%)

Category Dynamics -Consumer Hierarchy of Needs

LowTransferableDemand

HighTransferableDemand

1. Form 2. Gender 3. Brand 4. Type 5. Scent 6. Size

•Sticks•Gels•Aerosols•Roll-On•Soft Solids

•Male•Female•Unisex

•Speed Stick•Right Guard•Lady Speed Stick•Secret

•AP•Deo

•Scented•Unscented

•Large•Small

• Consumers choose an AP/Deo product based on a hierarchy of needs which begins with form, first and foremost

Source: Nielsen Household Panel

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)

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

Okay, so how does this relate to Brand Management and my job

this summer?

3.1%

7.9%

1.2%

13.1%

5.5%

3.8%

5.8%

6.9%

5.3%

2.6%

13.0%13.7%

0%

5%

10%

15%

1998 1999 YTD

Hey Fuqua Intern, How can we sell the sales force on supporting Diet Mtn Dew?

Source: IRI G/D/M 7/00

Volume % Chg vs. YAG (G/D/M)

Diet Dew

Diet Colas

Diet Flavors

Diet CSDs

So, How Does This Apply to BM?

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%

Hey Fuqua Intern, which SKUs do we really need to get out on shelf?

Channel ACV Weighted Distribution

Source: IRI ‘99

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

So, How Does This Apply to BM?

Market BottlerF'99 Diet

CDIF'99 Reg Dew PDI

F'99 Diet Dew PDI

F'99 Diet CSD

Volume Sales

F'99 Diet Coke Share

F'99 Diet CSD Per Cap

1 168 360 581 3,466,558 9 5.72 162 378 563 4,108,059 9 5.53 158 234 336 13,342,060 11 5.34 PBG 153 401 427 4,598,626 11 5.25 140 202 165 7,845,883 10 4.86 PBG 140 257 308 10,477,238 8 4.77 138 150 199 5,102,365 11 4.78 134 207 250 8,362,537 11 4.59 PBG 130 177 236 4,135,501 11 4.4

10 PBG 127 154 160 6,602,234 13 4.311 PBG 127 215 217 11,582,494 13 4.312 126 90 38 11,927,926 12 4.213 124 251 193 8,379,668 8 4.214 PBG 123 110 97 11,628,930 11 4.215 120 232 394 10,056,763 9 4.116 119 166 136 2,568,449 12 4.017 118 99 79 9,828,287 12 4.018 PBG 116 106 90 2,829,239 6 3.919 PBG 115 107 99 9,109,999 11 3.920 PBG 115 163 200 16,170,348 10 3.921 114 160 163 10,812,777 10 3.922 111 202 366 7,157,525 8 3.723 Detroit, MI PBG 108 134 104 17,392,666 10 3.724 Tulsa, OK PBG 105 144 129 3,089,248 8 3.625 Peoria/Springfield 102 155 116 6,674,394 10 3.526 Baltimore/Washington PBG 101 54 47 23,253,498 12 3.427 Nashville, TN PBG 100 125 130 4,455,948 9 3.428 Richmond/Norfolk PBG 100 105 113 8,475,255 10 3.429 Mississippi 99 106 125 7,650,893 12 3.330 Birmingham/Montgom 99 160 262 11,909,382 9 3.3

Questions?