Case Study

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Introduction
This is a case study in which the typical tools of testing and data
collection are combined with couponing, in-store promotions, sampling,
and in-depth interviews to understand the WHY behind the choices
shoppers are making. Read an interview with Herb Sorensen about the
challenges of this project.
The Product
Nestlé, in partnership with Noble and Associates, developed a new
line of high-end, indulgent, single-serve desserts. These desserts,
Nestlé Pleasures™, targeted affluent, educated women who enjoy
indulgent desserts at
restaurants, and want
to have the same
quality in the comfort
and convenience of
their homes. Nestlé
Pleasures™ was offered
in five different indulgent
varieties including
several cheese cake and
several chocolate cake
varieties.

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 Case Study Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Location, location.
In striving to recreate the restaurant “dessert tray,” Nestlé was
concerned with the best location to offer the product: in the home meal
replacement section of the deli or the in-store bakery, where shoppers
might expect to find this type of high quality, fresh dessert.
Nestlé turned to Sorensen Associates to conduct a Controlled Store
Test. The objectives of the research were to evaluate viability of the new
product in two different shelving locations/conditions in the grocery
store. In addition to understanding volume potential, the test included
many elements uncovering more in-depth insights:

• Assess volume potential when shelved in the deli versus the bakery
• Evaluate product performance and survival throughout the
distribution chain (i.e., spoil rate)
• Evaluate in-store execution problems (i.e., shrink, damage, stock outs,
etc.)
• Evaluate marketing strategy (including in-store sampling and
couponing program)
• Evaluate impact of new product introduction on category and
competitive sales
• Evaluate the impact of the in-store couponing and demo program on
sales volume
• Identify barriers to trial among rejectors
• Determine purchasers’ perceptions and attitudes toward the product
immediately after trial
• Determine repeat purchase and future repeat purchase intent and
perceptions for the product after use
• Identify product improvement opportunities
• Understand how consumers use the product (who eats, meal
occasion, etc.)

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 Case Study Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

The Sorensen Approach

The custom approach developed for Nestlé combined traditional
controlled store testing methodologies with in-store and post-trial
interviews to understand the motivations of potential customers.
Retailer Negotiations
Sorensen Associates negotiated with multiple retail
chains in several markets to identify the ideal retailer

* to participate in the test. The product was well

received by Kroger in Atlanta, Schnucks in St. Louis,
and Stop & Shop in Boston. However, due to the
specific demographic being targeted and profiles
of expected shoppers in the various chains, the
retailer finally selected for the test was Dominicks in
Chicago.

Sorensen Associates’ strong retailer relationships offer manufacturers

hassle-free access to many markets and chains.
Our flexibility and focus on your needs means last minute changes are
easily accommodated and typically with very little additional cost.

Store Matching
Two panels of stores were identified, one to sell the product in the deli
and the other in the bakery. Stores were matched to ensure comparable
category and store sales volume between the two panels. To match
the product’s target, stores located in affluent areas were selected for
participation.

Using categorical cluster analysis, Sorensen Associates not only

matches stores for sales measures, but also ensures the shoppers in
the stores are comparable demographically (using SPECTRA data,
including the Market Demand Index).

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 Case Study Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Warehousing, Distribution, and In-Store Execution

Due to the unique and delicate nature of the product, it was important
to warehouse and distribute Nestlé Pleasures™, as if it were a true
market launch. Sorensen Associates coordinated with warehouses,
distributors, and store staff to ensure the products were not given any
special treatment. Loss, spoilage,and damage (shrink) at each stage of
the distribution process were tracked. These steps were especially
important because the product was delivered and maintained at the
stores in frozen condition, with only enough product slacked out at a
time to keep the shelf stocked. Audits of each store were conducted
twice per week to evaluate in-store execution and identify stockouts.

Sorensen Associates will execute the test to meet the needs of the
study. Our flexibility enables you to conduct a more comprehensive
test, even for products that require special attention and care. We
can handle all aspects of distribution and in-store execution, or we
coordinate and verify test execution provided by the manufacturer’s
normal channels.

Sampling and Couponing

To evaluate the impact of sampling and couponing (50 cents off) on sales
performance, a sampling and couponing program was conducted in the
first few weeks of the test. Sampling occurred in all test stores for a half
day on Saturday and Sunday for the first two weeks of the test. In-store
signage, balloons and a full shelf display created awareness of the new
products.

Sorensen Associates can either manage the sampling and couponing

program, or coordinate with an agency of your choice. We have
helped evaluate the effectiveness of direct mail campaigns and POP
support (floor graphics, door clings, or shelf talkers).

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 Case Study Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

In-Store Interviews
Interviewers were placed in the test stores during product sampling and
couponing for Nestlé Pleasures™, which was an excellent method for
generating a significant number of interviews efficiently.
The interviewers observed shoppers who tried the samples and received
a coupon. Purchasers were interviewed to evaluate awareness, source of
awareness, past purchase, reason for purchase, likes/dislikes, impressions
of the product for quality, value, taste, etc. Those who did not purchase
(rejecters) were also interviewed and asked why they didn’t buy, likes/
dislikes, product impressions (quality, value, taste, etc.). Respondent
name/phone, detailed product usage, and demographic information were
also collected.

In addition to quantitative interviews, Sorensen Associates can conduct

qualitative AisleTalk™ interviews, ethnographic analysis of shopper
behavior, and analysis of a shopper’s path using PathTracker™ to
understand the WHY behind the choices consumers make.

After Use Interviews

One week later, respondents who had purchased were telephoned and
interviewed about their reactions to Nestlé Pleasures™. They were
asked if they had or intended to repeat purchase, likes/dislikes of the
product, comparison to expectations, perceptions of price/value, quality,
brand, and taste. Respondents were also asked what flavors they tried,
who ate the desserts, meal occasion, meal accompaniments and the
appropriateness of the location in the store where it was purchased.
This after use feedback provides invaluable learning about perceptions
of the product among those who actually trialed the product and
those who actually used it. Controlled store tests that don’t track this
information lose out on understanding the difference between store
interest and home use. Nestlé now had a full picture of how their
product fared with target shoppers.

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 Case Study Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Key Findings
Sales results were analyzed to determine how the products performed
against the competition. Analysis of sales for the full line, as well as
individual SKU’s, was conducted.
Product performance in the distribution channel, the amount of
shrinkage (a combination of spoils and other unaccounted for losses
including pilferage) was tracked and reported. Suggestions for
improvement during distribution and warehousing were identified.
The impact of sampling and couponing on line performance, during the
promotion and after, was reported.
Sales performance of Nestlé Pleasures™ in each store location (bakery
and deli) was reported. Consumer feedback identified a third location
that might have been a better opportunity.
Critical consumer perceptions and attitudes toward the Nestlé
Pleasures™ products helped identify important areas of how the
product could be improved. Knowing why certain shoppers would or
would not select the products and how they perceived them (occasion
versus everyday) gave Nestlé the kind of data that a typical controlled
store test would not provide.

Key Findings Outline

1. Sales results against competition
2. Product Performance in the distribution channel
3. Impact of sampling and couponing on line performance
4. Sales Performance in each store location
5. Critical consumer perceptions and attitudes

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 Interview
Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

An
interview
with Herb Sorensen,
founder and President of Sorensen Associates

?
What were
the particular
Sorensen:
“Operationally, this was incredibly complex. We handled delivery
from their warehouse, stocking of stores, audit, and assisting with
shelf sets through the test, as well as providing continuous reports
on project status with adjustments and accommodations practically
challenges
on a daily basis. We also needed to monitor how the bakery and
of this project?
deli departments were going to handle this product, since slacking
the product properly and presenting it as fresh was critical to how it
was received by shoppers. It also can be very challenging working
with different retailers.”

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 Interview Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Sorensen:

?
“On viewing prototypes of the product, most retailers would have
immediately stereotyped the product and wanted to place it in a
location/department completely at variance with the positioning
that the client desired. One of the reasons for contacting Sorensen
How did was that the client wanted to avoid both internal and trade biases
Sorensen’s in positioning the product. Sorensen’s extensive experience working
experience help directly with store managements gave us an advantage in negotiat-
find the right retail ing difficult terrain. Successively, Sorensen presented the Pleasures
partner? concept to four different chains, and in each case received prelimi-
nary chain approval to proceed with the test. However, marketing
was looking for a very special shopper psychographics, matched
with particular Home Meal Replacement strategies in the store.
This led to successive store matching processes at Kroger in Atlanta,
Schnuck’s in St. Louis, Stop & Shop in Boston, and, finally, Dominick’s
in Chicago.”

?
How did Safeway’s
acquisition of
Sorensen:
“We not only negotiated approval of the selected stores, but also
“
managed the delivery, in store handling, and merchandising of the
product. The process was seriously impacted by Safeway’s acquisi-
tion of Dominick’s the week the test was initiated. A temporary
Dominick’s in the
interruption of available scan sales data was managed by the use
middle of the test
of very careful weekly audits of store inventory and velocity, which
affect the process?
were later confirmed by data supplied directly by Dominick’s, as
well as small custom store panels created by IRI in response to the
limitations that had developed.”

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 Interview Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Sorensen:

?
“Although not directly responsible for the demo program, our years
of experience working with and around demos provided helpful
guidance to marketing management on the process as it unfolded
in the stores. Management often is shielded from the operational
How did Sorensen realities in the marketplace. Sorensen is well familiar with the
help with the conditions and many of the practices in the stores.We are known
in-store for our street smarts and flexibility. If there’s an area where we can
demo program? help with a product launch, we are available.”

Sorensen:
“We were able to cover multiple stores in eight weeks, reaching
several key demographics, and providing the rich consumer compo-

?
nent, necessary for further development. Because we can intercept
customers at the point of purchase, it was a lot more efficient for
callbacks and screening for focus groups. The quicker turn around
time and lower cost allowed the developer group and Nestlé to
What was obtain key field data to further develop the product and determine
the benefit of the the right marketing and merchandising strategy. At the end, we
research for were able to tell them how often people intended to buy it, what
Noble and Nestlé? they liked about it, and how to merchandise it.”

www.sorensen-associates.com Oregon: 800.542.4321 • Minnesota: 888.616.0123 • Pennsylvania: 866.993.0123

 Interview Continued

Nestlé Pleasures
In-Market Studies - Controlled Store Test:- Challenges and Learnings
™

Sorensen:
“In several ways: First, we are actually in the store to make sure

?
the product is shelved and priced correctly. In this case, we were
able to see how the product was handled and presented. For a
high-end product, that’s very important. Secondly, we combined
traditional sales data with qualitative research that we conducted
How is a Sorensen
both in the store and on the phone as a follow up. This is the real
Controlled Store Test
difference of what we offer: the key to why or why not people will
unique?
buy. The information we gathered and analyzed was critical to
further development of the product and the merchandising. Lastly,
we are extremely flexible and don’t turn from a challenge. A six
month Controlled Store Test is great when you have six months, but
sometimes that’s just not feasible for the client. We have the opera-
tion and retailer network to quickly deploy a test to find out what is
needed right away. If the client wants to find out something ad-
ditional while we are in the store, we can easily build that into the
program.”

www.sorensen-associates.com Oregon: 800.542.4321 • Minnesota: 888.616.0123 • Pennsylvania: 866.993.0123