consumer360 2005 apples

Information about consumer360 2005 apples

Published on November 5, 2007

Author: Marian

Source: authorstream.com

Content

Slide1:  A Fresh Perspective on Consumer Research Bruce Axtman, President and CEO The Perishables Group, Inc. Steve Kent, Senior VP, Retail Client Service Spectra Marketing Agenda:  Agenda Perishable Industry Background Research Project Goals US/Region Consumer Profile: Apples Market/Chain Dynamics Store Level Performance Research Tools Background:  Background Address the industry question: What information is available to support perishable category management? Integrate the data resources available to support category management efforts for the perishable departments Apply the approach common to CPG category development to the perishable categories Demonstrate the ability to conduct perishable research based on understanding the perishable consumer behaviors and voids What can be learned? :  What can be learned? Consumer category behaviors based upon historical results, consumer purchase intent and predictions Fully understand what perishable segment consumers are purchasing and why? Create merchandising, assortment, promotion and pricing plans based on behavior profiles Ultimately, change the way the perishables industry goes to market with categories through conducting this consumer discovery process Research project goals:  Research project goals Gain true insights into the perishables consumer across segments Who they are? How do they behave in-store? What needs are un-met? Build a structure to bring the consumer into the category management equation Integrate the available data resources to develop a comprehensive consumer profile Showcase a solution to meet clients’ needs at various levels of commitment to perishable category management Demonstrate the value of consumer knowledge in the category management process The Tools:  The Tools Consumer Research Components Project Approach:  Project Approach The tools work together to gain a comprehensive understanding of the consumer opportunity CONSUMER Opportunity POS (Topline, Market, Store Level results) Homescan Panel Data Topline View Internet Surveys Topline View Consumer Purchase History Predictive Consumer Behavior Consumer Purchase Intent and Triggers Spectra Segmentation Market View Spectra Clustering Store Level View Store Audits Market View Consumer Intercepts Store Level View Research approach:  Research approach Develop perishable strategy and supporting tactics National and Regional Consumer Profile:  National and Regional Consumer Profile The Apple Consumer:  The Apple Consumer Key Consumer Profile Female Age 35-54 College graduate Affluent Own home Children in the household Traditional family Opportunity Consumer Profile Single male Getting by or poor No children in the household Source: ACNielsen Homescan Panel Data The Apple Consumer:  The Apple Consumer 80% of US households purchase apples Source: ACNielsen Homescan Panel Data, 2003 The Apple Consumer:  The Apple Consumer 42% of apple consumers purchase the apple category weekly 68% of apple consumers eat apples more than once a week Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Heavy Users vs. Light Users Ethnic - Region Heavy: Hispanic, Asian • Northeast, West Light: Caucasian, African American • Southeast, Midwest Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer 80% of apple purchases are made in a traditional grocery store In the Southeast region, consumers purchase more apples at Supercenters than the national average In the West, farmers markets enjoy a larger percent of the apple category sales Source: ACNielsen Homescan Panel Data The Apple Consumer:  The Apple Consumer Consumer Purchase Decision Tree Crisp, firm quality Blemish free Select your own, loose product Consistent color Apple type Price Promotional influence Organic Packaging convenience Grown in a specific region Quality Flavor Price Promo Assortment Packaging “Brand” Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Apple Quality Almost one third of consumers report sorting through apples to find the quality they seek. Careful handling by store personnel will prevent bruising and provide the quality consumers expect. Store apples in the refrigerator to slow ripening and maintain flavor. Properly refrigerated apples can have a shelf life of 90 days or more. Firm apples provide the best flavor and crunchiness that consumers desire. Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Apple Quality 53% of apple consumers report storing apples on the counter or in the pantry, highlighting the need to educate consumers about maintaining the cold chain for best quality. Midwesterners are most inclined to refrigerate apples Southerners are most likely to store apples out of refrigeration Non-refrigerated displays should be limited to promotional product with high turn expectations. 63% of apple consumers are satisfied with the quality of apples offered for purchase. Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Category Segmentation The Apple Consumer:  The Apple Consumer Consumer Apple Type Preferences Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Consumer Regional Preferences McIntosh Empire Pink Lady Gala Fuji Red Delicious Golden Delicious Granny Smith Jonagold Braeburn Honey Crisp CENSUS PROFILE: Youngest Demographic High Asian and Hispanic CENSUS PROFILE: Oldest Demographic Low Hispanic Good mix of ethnicities CENSUS PROFILE: High Black and Hispanic CENSUS PROFILE: High White Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Consumer Apple Consumption Eat out of hand…89% Slice and eat…82% Baking…44% Slices with dip…43% Recipe ingredient…39% Applesauce…32% Salad ingredient…31% Apple juice…24% Other…2% Midwest West Northeast Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Consumer loyalty to apple type 68% of apple consumers will purchase another type of apple if their variety is not available 19% will delay their purchase until their next shopping trip 10% will go to another store for their apple type 3% will purchase another type of fruit Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Consumer Variety Influence In-store sampling 72% of apple consumers would purchase a new variety based on a favorable sampling experience Word of mouth 51% of apple consumers would take the suggestion of a friend …followed by promotion and price influences Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Category Tiered Pricing Segmentation Consumer Promotion Responsiveness In general, consumers do not wait for apples to go on sale to purchase Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Apple Category Trends 38% of apple consumers report purchasing more apples than the previous year 75% of these consumers report increased usage due to health and nutrition benefits Only 5% of apple consumers report purchasing less volume than previous year 42% of these consumers are concerned that the price of apples has increased Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Category Assortment Trends Consumer focus on healthy eating has increased the demand for organically grown apples. Marketing Organic Highest benefits to expectant mothers and children Low to no promotional support (price reduction) required Loyal consumers Destination items Higher retail price Source: Perishables Group Custom Internet Survey The Apple Consumer:  The Apple Consumer Apple consumers are concerned with quality and prefer bulk apple offerings to pre-packaged product The Northeast and West regions report a higher percentage of sales in bulk The Midwest and Southeast consumers purchase more bagged apples than the national average Percent of US Apple Consumer’s Purchasing Source: Perishables Group Custom Internet Survey ACNielsen Homescan Panel Data The Apple Consumer:  The Apple Consumer African Americans purchase bagged apples more often than other ethnicities Asians and Hispanics tend to predominately purchase bulk/loose apples Caucasians trend with African Americans, buying across both segments Vs. Source: Perishables Group Custom Internet Survey Market and Chain Dynamics:  Market and Chain Dynamics Market/Chain:  Market/Chain Chain Seasonality Trends Q4 and Q1 are the strongest sales quarters Peak crops Product availability plentiful Limited alternative fruit options available 1.09 95.7 78.5 1.17 Source: Perishables Group FreshFacts® Market/Chain:  Market/Chain Chain Promotional Effectiveness October Apple Event Best category sales week of the year .98¢ common price point across segment varieties 3 lb. Red Delicious drove sales and volume Promotional sales contributed 35% of the category volume Source: Perishables Group FreshFacts® Market/Chain:  Market/Chain Chain Promotional Contribution Combined bulk and bag promotional sales contribute 13.6% of total category sales Percent sold on promotion Red Delicious, the #1 variety, is heavily promoted at the chain Source: Perishables Group FreshFacts® Market/Chain:  Market/Chain Apple Varieties Across the US and the region consumer preferences are shifting. Source: Perishables Group, FreshFacts® Market/Chain:  Market/Chain Mainline vs. Varietal vs. Regional The market/chain focus is heavily concentrated in the mainline segment, while the region/total US has shifted to varietal and regional apples. Red Delicious Granny Smith Golden Delicious Gala Fuji Braeburn Cameo McIntosh Empire Jonagold Pink Lady Honey Crisp Source: Perishables Group, FreshFacts® Market/Chain:  Market/Chain Bag vs. Bulk Bulk apples contribute more than 85% to the category in the chain Bulk apple comparison Market < 7 pts Region < 14 pts Total US < 6 pts Source: Perishables Group, FreshFacts® Market/Chain:  Market/Chain Category Contribution The region and total US outperformed the market and the chain In the region/total US, two of the top five items are varietal apples (Gala and Fuji) In the market/chain only one of the top five items is a varietal apple Source: Perishables Group, FreshFacts® Spectra Chain Level Clusters:  Spectra Chain Level Clusters Affluent Suburban/ Families – Children Suburban/Urban Fringe – Older Downscale Urban Ethnic Young Urban Singles Source: Spectra Marketing Spectra Chain Level Clusters:  Spectra Chain Level Clusters Affluent Suburban/ Families – Children Suburban/Urban Fringe – Older Downscale Urban Ethnic Young Urban Singles Source: Spectra Marketing Spectra Chain Level Clusters:  Spectra Chain Level Clusters Four Main Clusters Majority of the chain (78.2%) skews in the suburban, high income, larger household demographics Source: Spectra Marketing Store Level Performance:  Store Level Performance Store vs. Cluster:  Store vs. Cluster Identifying Opportunities at the Store Level One store in the largest cluster of the chain High demand index for apples (114) Underperforming in category contribution Source: Spectra Marketing Affluent Suburban/ Families – Children One Store’s Consumer:  One Store’s Consumer Market Basket What items are likely to be in this shopper’s basket in this store All liquor including wine and beer Fresh produce Raspberries Asparagus Family oriented items Baby food Juice drinks Breakfast food, Cereal Other Dips, spreads, sauces Dried fruit Source: Spectra Marketing One Store’s Consumer:  One Store’s Consumer Market Basket What other items are LESS likely to be in this shopper’s basket in this store Cabbage Peas Sweeteners Canned Fruit Source: Spectra Marketing One Store’s Consumer:  One Store’s Consumer Media Preferences What cable TV stations, magazines, newspapers and radio programs influence the shoppers in this store Source: Spectra Marketing One Store’s Consumer:  One Store’s Consumer Buying Styles How is the shopper likely to behave Time-Pressed, Brand Loyal, Low Price Sensitivity “If I really want something I will buy it on credit rather than wait” “I don’t have time to clip or save coupons” “Price is not always more important to me than brand names” “I will most likely not switch brands to use a cents-off coupon” “I rarely like to change brands for the sake of variety or novelty” Source: Spectra Marketing Store vs. Cluster:  Store vs. Cluster The store is outperforming the cluster in volume and dollar sales, but the category contribution fell below the cluster. The store ranks in the bottom third in category contribution for the entire cluster. Source: FreshFacts® Store vs. Cluster:  Store vs. Cluster Consumers in the store say they buy more bagged apples than those consumers in the cluster as a whole. And they did… Source: FreshFacts® and Perishables Group Consumer Intercepts Store vs. Cluster:  Store vs. Cluster Consumers in the store say they buy more Red Delicious apples and fewer Gala apples than the consumers in the cluster. And they did… Source: FreshFacts® and Perishables Group Consumer Intercepts Store vs. Cluster:  Store vs. Cluster Consumers in this store say they buy more organic apples than the consumers in the cluster. Source: Perishables Group Consumer Intercepts Store vs. Cluster:  Store vs. Cluster Pricing at the store is lower than the cluster by 2%. Red Delicious is the lowest priced variety and has the highest sales. Source: FreshFacts® Store vs. Cluster:  Store vs. Cluster Store 20.1% volume sold 91.2% bulk 8.8% bag Cluster 19.6% volume sold 90.2% bulk 9.8% bag Source: FreshFacts® Store vs. Cluster:  Store vs. Cluster A Halloween promotion lifted the items and the category for both, but the cluster category impact was 5.3 percent greater. 6 items promoted Greatest impact Red Delicious 3 lb bag Smallest impact Red Delicious, small bulk All items except Fuji apples impacted the cluster more than the single store Source: FreshFacts® Store vs. Cluster:  Store vs. Cluster Store – 94 sq ft 45% mainline 31% varietal 18% regional 6% organic Cluster – 97.8 sq ft 39.5% mainline 30.4% varietal 22.5% regional 7.7% organic Source: Perishables Group Audits Store vs. Cluster:  Store vs. Cluster How do we close the gap? Tactics that will improve category performance in this store include: Increase focus on varietal and regional varieties Emphasize bulk items Reallocate space for organic and bulk items Bring the pricing in line with the cluster Increase promotions on varietal and regional segments to encourage trial The Tools Used:  The Tools Used Execute a consumer research project using research tools that have never been applied together in the perishables segment including: Household panel data from ACNielsen Demographic/psychographic data from Spectra Integrated random weight and fixed weight point-of-sale perishable syndicated data from ACNielsen In-store activities Consumer intercepts Merchandising audits Proprietary Internet research More to Come:  More to Come Other categories Tomatoes Breads/rolls Cakes Other perishables categories to come Other places to see the results FMI Education Session UFFVA Workshop Progressive Grocer IDDBA’s Annual What’s In Store Report Thanks to Our Sponsors:  Thanks to Our Sponsors Questions?:  Questions?

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