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303
Consumer panels
302 Denis Delmas, Dominique Levy
represents on average 86.4% of their milk purchases. It is also noted that this To illustrate these different situations, let us imagine three consumers, each of
loyal customer group is composed of light buyers of the category. them making six purchases within a given category and sharing their three
purchases equally between two brands (A and B).
Figure 12 Their buying patterns are as follows:
BRAND OF MILK -
1 A/A/A/B/B/B
BREAKDOWN OF CUSTOMERS BY SHARE OF REQUIREMENTS
2 A/B/B/A/A/B
50
NAP100
Share
Share
21.7
154.1
78.4
90.2
OAiNA
119.7
5.3
31.0
30
=ofof
50.4OAiNA
requirements
average
quantities
(100"10 28 Brand
"10
LLC) L in L 26 Lin L
Category 3 A+B / A+B / A+B / A+B / A+B / A+B
3320
52 8.1
67.7 L L
loyal
(10.0)
(25.2)
(15.3)
Share of
The first consumer may be considered as a lost consumer for A: he has chosen
B. The last does not see the necessity to choose between A and B, both of
which he is buying regularly. Only the second buyer seems to make a genuine
choice between the two brands at every purchase and he really puts them in a
competitive situation. It can be seen here that the concept of mixture or share
of requirements cannot be sufficient to distinguish between those three buyers.
To do this, we have to analyse their purchasing patterns.
This is the objective of competition studies, also referred to as studies of brand
switching, which analyse the purchasing patterns of each household to
measure the intensity of exchanges between brands and to arrive at a
representation of the categories (usually in the form of a map) which showS in
June 1996 to May 1997 visual form the proximities thus measured.
Figure 13 is about the toothpaste market in France, where most brands (A, B,
Through this example we measure how relative the notion of loyalty is.
e, D, E, F, G) present several varieties corresponding to consumers' needs
Depending on the richness of the universe of competitors considered, the
(anti-tartar, special gums, 2 in 1, etc.). The question here is to find out if the
share of requirements recorded for the same brand will vary enormously and,
consumers go from one brand to another choosing the same variety or if they
with it, the reading that will be obtained of the loyalty of its consumers. Take circulate between varieties within the same brand.
the case of a brand of chocolate biscuits. The share of requirements varies
from 5% to 25% according to whether it is calculated on the basis of the whole Figure 13
category of biscuits or on the basis of the category of chocolate biscuits. A PROXIMITY OF PURCHASES OF VARIETIES
poor definition of the universe of competition (overmuch or insufficiently
large) can lead to important errors of interpretation of the performance of the
brand.
The competition study shows that this universe is more organised by brand
(since there are strong proximities between varieties of the same brand), with
--- - Consumer panels
the exception of the two in one varieties, which seem to be a segment in dangerous competitors can be identified.
themselves.
Customer and competition studies enable us to place the brand within its
A competition study will enable us to understand which products in the category, to understand who the consumers are and how the purchases are
category the brand is compared with by its buyers. The study focuses on the organised. They allow us to identify a number of marketing activities (policies
process of choice between brands, but it does not quantify the volumes lost or for range, price, promotional activity) of which we will try to understand the
gained by one brand to the loss or profit of another one. operation and to measure the impact.
If we wish to quantify exchanges between brands in terms of volume, we will
The variations of the mix
use a study of transfer. This study will separate out, household by household,
the trend of the volumes of a brand consumed between two periods. This The first objective of analysing the variables of the mix is to adapt the offer to
decomposition will be in terms of: consumers. Once it is understood who our consumer is and what he is buying,
the next task is to try to find out how he is buying.
o 'retained' volumes, that is where identical volumes are consumed by the
household during period 1 and period 2 Is the formulation especially important for him? Is he particularly sensitive to
o purchase variations: increase or decrease of the consumption of a brand promotions? How important is the price in his selection process?
without any modification of the consumption of the other brands in the The analysis of the panel will permit us to:
UnIverse
o identify the problems (failure of recruitment, insufficient share of
o gains and losses from the competition: from which will be identified the requirements among heavy buyers, weakness of penetration among
transfers (positive or negative) to each brand in the universe. households with children, insufficient frequency, strong competition with
The example in Figure 14 refers to a brand of mayonnaise, for which the gain low priced brands, etc.)
in volume between two years (+2,500 litres) arises 20% from a positive o improve our understanding of the mechanisms which bring this situation
change in its consumption, and 80% (= 2,000 litres) from transfers from about (the heavy buyers are essentially buyers of large pack sizes, and my
competitive brands. These 2,000 litres are the balance of gains from other brand does not offer any; on the other hand, the failure in recruitment can
national brands, and moderate losses to distributors' and premium price come from the lack of a trial pack in the range)
brands. It can be seen that 60% of the volumes gained are at the expense of o propose actions
brand B, the market leader. o me~sure their impact.
Figure 14 The establishment of a formulation policy proceeds through the analysis of the
COLD SAUCES AND MAYONNAISES: BRAND A
customer base (penetration, profiles) of the different existing formats and of
the buying behaviour related to them (comparative frequency of purchase of
Bdcnceof Duetoc:hcng3s in Duetocomr:Bition
trens fers t:etv.een oonsumpion
the different formats). This procedure next concentrates on the analysis of
T 1 a'dT 2
2800 QA/purchase occasion (quantities bought per purchase). Depending on the
2500
60%Bra'dB problem identified and the targeted population, one will look for the most
40%Bra'dC
suitable format to propose: trial format, format adapted for heavy consumers,
format adapted to the socio-demographic characteristics of the population
500
targeted.
65%MDD The analysis of QA/purchase occasion is also useful for defining promotional
36% Other B rmet
packages. If we offer a 'three for two', what is the duration of consumption of
-800
an average household in relation to it? What proportion of consumers do we
exclude with a quantity that is too large?
T1: November 1992 - October 1993; T2 November 1993 - October 1994; volume in tons
r-~...----------------"'--'r
306 Denis Delmas, Dominique Levy
----
Consumer panels · 307
With the introduction of a promotional activity, the buying frequencies and this risk is improved by studying the proportion of buyers attached to the
their distributions are also analysed, whether to fix an optimal promotional promotion within the customer base of the brand and its development.
cycle or to fix the number of 'eligible' purchases in the case of a promotional Another essential variable in the mix of which consumer panels permit us to
mechanism based on repetition.
improve our understanding is the price. When devel?ping a pri~ing policy, it
It is also common practice to produce information on the promotional is essential to understand how consumers perceIve the pnce. Do they
conditions in which a purchase is made. We can capture certain types of systematically buy products located around the same price range, or, on the
promotion (coupons, game gifts) in the records of the panel members. We can contrary, do they go from one price level to another depending on the segment
also note special formats (bonus packs, 'giraffe', sets, three for two, etc.). In of the market considered or on the occasion of buying? Does the price of a
these two cases, we have the ability to isolate purchases made under product or a type of products change from one store to another?
promotional conditions. This information is used mainly in two ways. To answer this question, consumer behaviour is analysed in terms of price
o The record of purchases made under promotional conditions is used paid during a year. To do this, the purchases of a category, segment or brand
primarily to measure the impact of these activities. If these are effectively are segmented according to their price level. The behaviour of consumers is
identifiable, and sufficiently widespread, or of long enough duration, to then analysed in terms of their mixture of purchases in accordance with price
obtain a satisfactory number of observations, we will be able to treat the levels. The objective of this analysis is to draw a distinction among customers
promotional format as a new 'product'. If we apply to it the investigative between 'expensive buyers' (most of whose purchases are in the highest range
methods used for the analysis of new products, it will be possible to identify of prices), 'low price' buyers (most of whose purchases in the lowest range of
the buyers of the offer (are they already buyers of the brand? From which prices) and mixed buyers (who spread their purchasing across all price
competitive brand are they coming?) and we will be able to follow their ranges). If the market offer requires it, the population can be segmented into
behaviour beyond the promotional purchase (do they go back to their more tightly defined groups (that is, defining a larger number of price ranges).
original brand? Does their loyalty to the brand increase? Where there are Where does this analysis lead?
combinations or bonus packs, how does the interval between two purchases
First, we need to know how many and who are the 'expensive' buyers or
of the category develop?). This type of analysis is only possible if the
'cheap' buyers of a category, and what are their differences in terms of
method of collection is appropriate, and if the penetration and frequency of characteristics or behaviour.
purchasing are sufficiently high to permit robust analysis.
o Apart from this, we will try to validate the existence of a specific customer Next, if we wish to evaluate, for example, the potential of an up-market
base for promotional offers and, should we find one, to characterise it. The positioning, it will be possible to analyse the proportion of 'expensive' buyers.
logic of this analysis is to consider the promotional offer as a whole and to If this proportion is high, that means that a customer base for such an offer
treat it as a brand, observing its penetration (what percentage of buyers of (capable of buying it and being loyal to it) exists. If the proportion is low, that
means that it will be possible to reach a large number of buyers (expensive
the market are making at least one promotional purchase), its QAlNA and
and mix buyers), but it will be difficult to establish a loyal core of buyers if we
QA/purchasing occasion, the frequency of promotional purchases made and
the share of requirements of the promotion. It is this last indicator which keep a mix at the top end of the price range, because the brand will only affect
will enable us to validate whether there really exists a customer base loyal to a small part of the consumption of its buyers (an occasional and festive
the promotion, which can be studied in terms of profile and consumption consumption for example).
(are they heavy or light buyers of the category, what brand(s) do they Depending on the category considered, the price will constitute an axis of
prefer?). segmentation of the customers, and therefore of the market, which is more or
less relevant. If the price is a determining element in the buying behaviour of
Some categories are subjected to particularly intense promotional support consumers, the competitive universe of a brand will be mal up or bramb
(especially food or household product categories). In these cases, it is essential with the same price level. In this case, a modification of the f '" p••..:.ewill
to discover if the purchases made under a promotion are so made by all the lead to an important disturba~ce for the C(~-.:;umcrand his cor lllive choice
buyers in equivalent proportions, or if we can discern a special population of Tt.!s means beth thqT we w:ll ut: "ble to us~ a s!fategy oased 0, -dce, but aha
buyers 'in promotion', which goes from one brand to another depending on that every repositioning of prices will generate a real risk of lo~ : ~)'.1~lers.
the promotional offers. If this is the case, it means that the diminution or
ending of promotional support for a brand is highly likely to show itself in an
important loss of buyers and/or a significant fall in loyalty. The evaluation of
308
Denis Delmas, Dominique Levy
Figure 15
TV EFFECTS
309
1%
Figure 17
1.3%
1.1%
1%
1.4%
category in question), and a repeat buying rate that is good and rapidly 0.6%
0.5%
stabilised.
0.4%
Figure 16
NEW SAUCE
PENETRATION AND REPEAT BUYING CURVES
9505 9506 9507 9508 9509 9510 9511 9512 9513 9601 9602
% Rpt buyers 4. t% 31.5% 30.5% 40.9% 63.5% 54.4% 59.7% 79.5%
6 o Newbuyers 0 Repeatbuyers
5.6
5
11.2
4 NEW SAUCE: VOLUME SHARES DUE TO REPEAT BUYING
3
.3
o
9503 9504 9505 9506 9507 9508 9509 9510 9511 9512 9513 9601 9602
Repeat buying 2.4% 2.5% 23.4% 25.1% 28.4% 32.8% 31.7% 33.3%
The upper line represents penetration; the lower line represents repeat purchases 9505 9506 9507 9508 9509 9510 9511 9512 9513 9601 9602
5.0% 3.7% 38.7% 30.6% 39.4% 61.0% 54.9% 66.1% 78.9%
% Rptpch
l
The proportion of repeat buyers in the total customer base is a sign of OQA Trial o QA Repeat Purchase
customer satisfaction, and as shown by the two graphs in Figure 17, this
reaches nearly 80% less than a month after the launch. The brand seems to
have a promising future. Most of these questions can be answered by analysing the behaviour of the
new brand trialists before and after the trial. The method of this study is to
To diagnose the situation of a brand that has just been launched, it is necessary
isolate the consumers trying the brand, and to observe their purchases of the
to understand how it establishes a position in the market, that is, how the
consumption of this new brand changes, for its buyers, their consumption of category during a certain period before the trial, and during the same period
after. The length of this period is determined according to the buying cycle of
the category and/or the brands composing the category. In the case of our
sauce, we can ask, for example, whether its innovative character has managed the category, selecting a period long enough for the consumers to make (on
to attract households which were not consumers of the category. It can also be average) a significant number of purchases.
asked what proportion of the purchases devoted to this sauce are made in The objective of this study is to compare the purchases made by the
addition to previous household consumption, and what proportion have been consumers before the trial with those they made after, so as to be able to
made replacing purchases of other brands. If the purchases are replacements deduce the changes brought about by the introduction of the new brand. To
for other brands, who are the competitors on whom the launch has had the avoid attributing to the new product phenomena which have nothing to do
most impact? with it, a control group is established consisting of buyers of the category who
313
Consumer panels
312 Denis Delmas, Dominique Levy
--
Figure 19
have not tried the new product, which is monitored in the same way. The
WHERE THE NEW SAUCE TRIALISTS COME FROM
results of the study will be read through the comparison of the developments
recorded between the two periods (before/after) in the two groups. 19.7
17.6
Let us return to the example of our new sauce (Figure 18). The first
conclusion is that only 57% of the consumers trying the new sauce had bought 25.7 34.6
another sauce during the sixteen weeks before the trial. Our new product
therefore manages to recruit new consumers for the category. The graph also 15
shows that 35% of the trialist consumers repeat the purchase, and that 40% of 22.4
them will buy a competitor's sauce in the sixteen weeks following the trial. 22.6
17.5
Figure 18 19.1 ::>.\:1
57 -
5.5
QA/NA
7.3
7.1-
40
63 57
-
35 (.:3 - New Sauce
Sauce Before Trial
8
19
10
"7
17
8
18
11
11
(3
12
10 Variety DA I
o V,,;'"
o Variety E
I If, for a manufacturer, the knowledge and understanding of distribution are
becoming more and more essential aspects of the development of marketing
strategy, the retailer must also manage the marketing of his brand name. It is
8 I why he is often a buyer of consumer panels.
7 20 21
32 34 I°Others
OMDD+AM j
In this perspective, his use of the consumer panel will substantially resemble
27 32 9 11 (more and more) th({ use made of it by the manufacturer, but regarding the
15 store name as a brand. He will therefore use analyses very similar to those
-I -- -t- 14
1996 1997 -f-- ---..... -+----- ---+-- applied to products in order to improve his understanding of his customers and
1996 1997 '-j their behaviour.
Total France 1996 1997
Retailer A
Retailer 8 To manage his store brand, the retailer will follow the trend of its market
share, take an interest in its customer base, in their buying behaviour and its
competition with other stores. But whilst a manufacturer works with only a
The inforIrultion will enahle us to ,"entify priorities in terms of commercial few products in, at most, a few categories, the retailer's problem is essentially
and promotional activities. On the basis of these analyses are established the the management of the entire offering within his stores. His questions concern
operations kuown as retaU marketing, which consist of adapting the mix of a the whole of his product range together, or else tens of families of products
product (in tenus of range, formulations, prices, promotions) to the Particular grouped in ranges.
behaviour nf the Customers of a named retailer. It is also true that this
understanding of the particular situation of a category within a specific retailer The first objective of the retailer is to observe those families of products where
(enriched, if Possihle, with information provided from other sources such as he excels and, on the other hand, those in which his performance is low. The
performance of a named retailer is usually measured for a class of product by
the internal databases of the distrihutor or the results of store panels), Iruly
enable a manufacturer and a distributor to set up a partnership to optimise the the ratio: market share of the retailer in the class of product/market share of
'all products' of the retailer.
317
316 Denis Delmas, Dominique Levy
Here is an example (Figure 21) of a French hypermarket chain for which the
-- Consumer panels
CONCLUSION
Consumer panels are, as we have seen, complete tools that permit a variety of
intelligent and relevant analyses. In the years to come, we expect to see the
further spread of their geographical coverage (especially in Asia and Eastern
Europe).
From a methodological point of view, the future lies in the enrichment of
consumer panels by the integration of other information, allowing cross-
analyses or new fields of application.