Nielsen - BASES Overview

Winning with Innovation An Introduction to BASES

Created for Nielsen Client Business Partners April, 2009

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Agenda • Overview of BASES • Our Services

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What is BASES? • Our mission is to help our clients grow through successful innovation on their brands. • We use a pre-market sales forecasting system: – Measures consumer interest in new initiatives and relaunches – Combines consumer measures with marketing plan information to forecast sales volume – All prior to marketplace introduction

• The system s stem is used sed to evaluate, e al ate diagnose diagnose, and improve impro e the potential of new product initiatives and relaunches.

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Innovation Process CLIENT DEVELOPMENT PROCESS You want to separate the strong initiatives from the weaker ones

You want to refine the initiative

You want to test the concept/product mix

You want to optimize your marketing plans for launch

You launch the product In Market Success or Failure?

• BASES provides new product advice and consultancy – Measures consumer interest in new initiatives – Combines consumer measures with marketing plan information to forecast sales volume – All prior to marketplace introduction

• Used to e evaluate, al ate diagnose diagnose, and improve the potential of new product initiatives and relaunches • BASES can lead the client through the whole development process 3

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BASES offers more than “Go/No Go” evaluations, with a flexible system to help you grow your initiative all along your NPD S A process process. Evaluate C Competitive titi Landscape, Identify White Spaces D fi Define Objectives BASES Market & Brand Ad i Advisor (MBA)

Genera t te, Select Ideas

Select, Refine Refine product in Build light of usage Strong experience Concepts and fit with the concept Optimize Marketing Mix & Marketing Plan ROI

L E S

Launch , Track, Optimi ze

+ P R O F I T

BASES SnapShot & Pre-BASES BASES I

BASES II

BASES Price Advisor

BASES Launch Review (Validation)

BASES Chatterbox BASES DecisionPoint

BASES Launch Advisor 4

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BASES Answers Business Questions • Should we develop this new Product? • How will a branding relaunch effect sales and quality perceptions of the line? • H How should h ld I prioritize i iti my development d l t efforts ff t on the th ideas id with ith th the most promise? • How can we justify a premium price strategy in category X? • Will our product deliver? • What are the optimal varieties/sizes in our line? What are the volume implications of launching g a subset of the varieties under consideration? • How much advertising (if any) will be needed to reach our sales goals? • Does our packaging break through the clutter at the shelf? • How much volume should we expect in the first year? • Is our main benefit credible and relevant to our target consumer? • Will this launch cannibalize other offerings in the category? 5 Confidential & Proprietary Copyright © 2009 The Nielsen Company

Helping our clients grow through successful innovation • BASES’ main focus is on forecasting the sales of new products before they are l launched h d iinto t th the market k t – We measure consumer interest in the idea (via a consumer survey), and then combine those measures with the brand’s marketing plan to forecast sales – We W then th help h l our clients li t iimprove th the id idea as th they prepare ffor th the llaunch h

Sales Forecast Consumer Response Data

+

Marketing Plan Information

From survey y data

Provided by our clients

=

Based on model calibrations to in-market data

Optimize Proposition, p , Marketing & Execution Through g analytic y frameworks and consultation

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This consumer response data is coupled with marketing plan information in the BASES Model to yield the volumetric estimate.

Volume Forecast

Impact of Marketing Support

What consumers actually do Adjust for what marketers do to influence consumers

Promotion/in-store activity Di t ib ti Distribution Awareness

Measure Consumer Perception Remove consumer bias f t factors Total Addressable Market

Volume Estimate

What consumers say they will do

Interested Universe Adjust for Overstatement Consumer Claims 7

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BASES interviews a sample of consumers representing the total addressable market as well as key target segments. The core “total market” sample allows for a direct comparison of initiatives and for calibration to inmarket data for forecasting. These interviews are augmented with samples representing client target groups, samples of key buyer groups, and other groups as appropriate.

Illustrative Example

Brand Loyalists ( (over-sample) )

Total Addressable dd essab e Market (base sample)

Key Buyer Group

Target Segment (over sample) (over-sample)

(over-sample)

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BASES’ systematic approach allows marketers to understand how their launch initiatives perform relative to their category S A L E S

Evaluate Generate, Competitive Select Landscape, Ideas Identify White Spaces, Define Objectives BASES Market

Select, Refine Build Strong Concepts

Refine product in light of usage experience and fit with the concept

Optimize Marketing Mix & Marketing Plan ROI

Launch, Track, Optimize

+

P R O F I T

…and answer a set of Key Measure questions asked in the same manner on every survey survey.

Eureka!/

Consumers are exposed to a concept representing the launch proposition…

Purchase Intent Liking Price/Value

• Which statement best describes how you feel about buying this product?

• How much do you think you would like or dislike this product? • Considering the price of the product, how do you feel about the value for money of this new product?

Believability

• How do you feel about the believability of the statements made

New & Different

• How do you rate this product in being new and different from other

Claimed Units Claimed Frequency

about the product?

products?

• How many units of the new product, if any, would you buy the first time you purchased this new product?

• How often, if ever, would you buy this product if it was available where you shop?

vs. the BASES Database of ~100 Pasta Sauce initiatives evaluated in the U.S. within the past 10 years

Overall Purchase Intent*

Liking

Value

C

C

C

Uniqueness

Claimed Units per Purchase**

Claimed Annual Purchase Frequency**

100%

80%

60%

C 40%

C

C 20%

The systematic approach allows for “apples-to-apples” pp pp comparisons of performance to a category-wide database for every launch proposition proposition.

0% C= Chef Lou's Pasta Sauce

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Our unique advantages lie in our extensive innovation expertise and rigorous approach to benchmarking and volume forecasting • Databased Approach to Benchmarking – Powerful tool to assess strength of new launches • Volume-Based Analytics – Enabled by our systematic and empirical approach to analysis and forecasting and the resources of the entire Nielsen Company

• Extensive history of innovation consulting – 90,000 new ideas tested • Unique client service structure – Dedicated forecaster/analyst consultants. • Proprietary tools and techniques to optimize initiatives and launch success – IntroSCAPE proprietary “consumer adoption” framework – Marketing execution optimization – Choice Tools linked to volume – Price optimization – Category opportunity identification 10 Confidential & Proprietary Copyright © 2009 The Nielsen Company

Additional BASES Products and Services •

BASES FindTime –

•

Can consumers find my product on shelf? What package attributes best help differentiate my product from the competition?

BASES IntroSCAPE –

•

How can the initiative be optimized to best reach consumers?

BASES Marketing Plan Analyzer –

•

How can I optimize my marketing support for a new product?

BASES Price Advisor –

•

What is the optimal pricing strategy for my initiative? What impact could price have on the volume potential of the initiative?

BASES DecisionPoint –

How will the introduction of a new product or line impact my full portfolio of brands in market? 11 Confidential & Proprietary Copyright © 2009 The Nielsen Company

Thank you!

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