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ACNielsen recently completed the 15th edition of its annual Trade Promotion Practices Study which has traced industry promotion budget and allocation trends on the manufacturer side for 15 years, and corresponding retailer practices for nine years. The longitudinal view of spending habits and preferences affords unique insights into the ebb and flow of promotional methods through time, and an enlightened look at the similarities and differences between these trade partners.
Conducted via the Internet, the online survey polled senior sales and marketing executives from 61 manufacturers and 38 retailer organizations. The electronic field work was supplemented with in-depth telephone interviews to more fully develop areas of special interest. The Trade Promotion Practices Study has been distributed to ACNielsen clients and is available for purchase on our website at http://www.acnielsen.com/store.
Benchmarking performance
Perennial favorite topics up for debate include the efficacy of frequent shopper programs and an assessment of which elements in the category management tool kit (assortment planning, promotional planning, shelf management, category business planning, everyday low pricing, frequent shopper/loyalty programs, micro-merchandising and micro-marketing) have gained or lost favor in the calendar year.
A matter of opinion
While retailers and manufacturers disagreed on any number of issues ranging from the sufficiency of trade promotion dollars to the effectiveness of shelf management, there were five areas of accord. The following topics were identified by both groups as critical success factors important to their business:
1. understanding consumers
2. new product introductions/implementation
3. category management
4. promotion efficiency/effectiveness
5. variety and assortment
Additionally, each faction identified important subjects specific to their operations. In the case of retailers, those subjects included private label activities and customer loyalty/retention programs. In the case of manufacturers, those subjects included trade partners, vendor relationships and category management.
Tailoring content
With study input available to guide editorial selections, the Fall/Winter issue of Consumer Insight magazine serves up a number of articles that directly address the top-ranked concerns of retailers and manufacturers. When it comes to understanding consumers (factor 1), the publication places the two largest age cohorts in the U.S. squarely in the crosshairsÑBaby Boomers and Millennials.
The article titled “Baby Boomer Segmentation: Eight is Enough” introduces a robust segmentation model from ACNielsen Homescan & Spectra, based on the single
most influential determinant of consumer purchase behavior— household composition, and in particular, presence of
children in the home.
The mantra “it’s all good” describes the teen scene in the article titled “Tune into Teens” for marketers who take the time to understand the zeitgeist of Millennials and their propensity for electronic multi-tasking. While teens may not have the bank accounts to purchase big ticket items, their influence over household spending decisions is undeniable.
New product intros
Opening a window onto the global new product scene
(factor 2), the article titled “Global Household Product Sales: Innovative Items Clean Up” analyzes the packaging, ingredient and social trends that contribute to successful new product uptake. Cleaning products with oxidizing properties swept
the worldwide sales ratings, along with so-called system approaches to cleaning like the innovative Swiffer line.
C.O.D.E. breakers
For a comprehensive view of consumer-driven micro-marketing, readers will want to spend time with the article titled “Cracking the Retail C.O.D.E.”, which touches on
each of the critical success factors from the Trade Promotion Practices Study. Expanded, the acronym C.O.D.E. stands for
1. Consumer Profiling—accurately captures the
demographic profile of the brand’s consumer.
2. Opportunity Gapping—quantifies store-level
opportunities based on consumer demand potential
and diagnoses the prospect.
3. Dynamic Clustering—groups similar stores using
multiple store attributes, including shopper demo-
graphics, the competitive set, and upside opportunity.
4. Executing for the ConsumerÑtakes findings from steps
1–3 and develops store-level tactical plans, giving
the field force the right information to optimize
in-store presence.
Forward-looking insights
With winter and the annual Consumer and Market Trends Report release approaching, more than the ambient
temperature is dropping. The VNU Retailer Sentiment
Index (RSI) saw a continuation of the downtrend which
started in January 2005.
Comprising monthly polls of roughly 500 retailers about
current and future economic conditions, the VNU Retailer Sentiment Index also takes into account indicators such as
store openings, hiring, earnings and general economic trends, synthesizing the input into a comprehensive view of current and future conditions.
Traditionally, retailers cited the competitive environment as their top concern since the inception of the RSI. By mid-year 2006, for the first time, the overall economy knocked competition out of the top spot.
Social responsibility
This year’s Consumer and Market Trends Report exhibits a decidedly altruistic bent, delivered by two articles. One article outlines the rise in organic products and the downstream
influence of Wal-Mart’s green commitment on the environment. The second article discusses how corporate sustainability and consumer pressure for environmental responsibility is sweeping through board rooms.
True blue
Segueing from the green theme, the Consumer and Market Trends Report will also cover the subject of true blue customers in a detailed article on the subject of loyalty marketing. The article walks through a framework for integrating a broad range of data from loyalty programs and POS numbers, to demographic profiles, attitudinal studies, share of wallet and promotional responsiveness to convert regular shoppers into loyal, high value customers.
Classic updates
Now in its tenth year, the Consumer and Market Trends Report will include updates on classic measures of industry
performance including channel blurring and category summaries. The channel blurring article investigates the impact
of consolidation on channel dominance and the behavior of valuable multi-channel shoppers, while the category review
article examines results from the convenience channel.
Pricing it right
Price compression and assortment expansion are two opposing forces that define the fast-moving consumer goods climate of today. From our custom analytical group comes a detailed
discussion of a repertoire modeling approach for simulating the impact of a price change on volume, share, revenue and profit.
It’s all about you
By lifting the curtain on this and future Consumer Insight articles, we hope to have piqued your interest in the publication, while demonstrating that we practice what we preach. You are our readers. You are our customers. And our goal is
to provide customer-centric editorial content that addresses
the fundamental needs of your business.
To make sure that we stay on point, you can e-mail our
editor at CommunicationsDept@Nielsen.com or contact
your client service representative any time to make a
suggestion that will improve our core product set or
thought leadership publications. We’re listening.
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