The Hartman Group Overview

Our CompanyOur CapabilitiesNOVEMBER 2008

Who We AreP A R T

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The Hartman Group, Inc.

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Consumer Culture and Tomorrow’s Marketplace

Creating marketplace advantage out of cultural change

There are research firms that just collect data and sell reports

There are many others that offer custom consumer research

But driving consumer engagement with brands requires much more than traditional consumer insights

Because you can never fully understand why consumers are changing if you don’t understand how the broader culture they live in is changing

At the Hartman Group, we don’t just study consumers. That’s a given. We also study the cultural changes that drive shifts in consumer behavior

This leads to better strategic insights for our clients and to more reliable tactics to grow their brands

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Our Services

brand strategy new product development messaging and communications

trends

retail experience design shopper insights

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Why We’re Different:Cultural Analysis

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The Power of a Cultural Perspective

Just because someone can make it or envision it, does not mean anyone will want it…

…the key question is: Does it resonate with consumer culture or not?

Innovation without a clear grounding in consumer culture explains many failed products, services and marketing platforms

• New Coke

• Uncle Ben’s Calcium Plus Instant Rice

• Meal assembly retail

• Low carb

Key Take-away: Ground your business in consumer culture, not just in what your company can do, wants to do, or what you think your consumer wants}

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Cultural Analysis Uncovers the Real Trends That Others Miss

Example: Surge in Growth of Organic Food

• Organic food has grown double digits since the mid 1990s

• When this trend first appeared, traditional market research asked narrow questions:

» Why do consumers want certified organic brands instead of conventional brands?

» Why do consumers visit natural foods stores instead of mainstream stores?

• But we asked:

» What is going on in the broader food culture that might explain the organic surge?

» Might there be more actionable opportunities hidden in this broader context, if we could only see past the ‘organic seal’?

• Traditional market research gets you good answers to narrowly framed questions but shuts out the broader context in which cultural change happens

At the Hartman Group, we avoid the narrow field of view found in traditional market

research

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The Organic Trend Actually Signaled a Massive Cultural Shift Toward Fresh, Minimally Processed Real Food

“The Natural Foods Channel”

What Others Saw:

“The Natural/Organic Consumer”

What We Saw:

Growing demand for food that is real, not

full of junk

“The Natural Foods Section”

a niche trend

a large scale consumer trend

explosion of farmers’ markets

“Fresh Food Retailers”

Grocery store perimeter

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Our Unique Analytical Assets

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We Track Key Cultural Changes for Our Clients

Quality is being re-defined in many major consumer categories

• Consumers want more than just commodity experiences

• Categories are maturing to meet this growing desire by developing more sophisticated meanings of quality than before

The cultural values that cut across categories are also shifting

• Consumers are moving from reacting to health problems to becoming proactive about health and wellness holistically

• Consumers are moving from unrestrained, self-interested consumption to concerns about sustainability

At The Hartman Group, we’ve developed two proprietary analytical approaches to helping our clients adapt to these twin changes in consumer culture and the marketplace

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Cultural Models™

Cultural Models™ …aligning your brands to quality trends in your industry

At The Hartman Group, we develop industry-specific strategy tools to drive strategic planning, new product development and brand strategy

These models help CPG clients understand how cultural change is redefining their core categories

These models orient our clients to white space opportunities for reimagining their existing equities and how far they can push their portfolio to meet future consumer needs

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INSTRUMENTAL EATING

Quality criteria external to food categories dominate:

– Nutrition

– Function

SAVORING

Quality criteria internal to food categories dominate:

– Freshness

– Narrative

– Flavor Distinction

INTELLECTUAL EATING

Nuanced quality criteria related to how food is produced:

– Local

– Artisan

– Passion

Cultural Models™ Example – The Culture of Food™

Each cultural model describes distinct zones of quality,

in which consumers have a culturally distinct style of consumption

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World Models™

World Models™ … aligning products and brands to the appropriate values-based consumers

• Customized targeting tools that reveal which consumers will respond well to specific values-based marketing claims

• Based on exhaustive Hartman studies of the most dominant values-based marketing platforms in the marketplace today

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World Models™ - Example The World of Sustainability™

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Source: The Hartman Group 2007 Sustainability Survey (n=1,606)

World Models™ - Example The World of Sustainability™

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How We Do It:Our Service Offerings

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BRAND STRATEGY

How do consumer trends impact your strategic planning?

What We Do: Analyze a brand’s portfolio for alignment with relevant category trends and identify strategic opportunities for growth using our proprietary Cultural Models™

Analyze your competition to identify white space opportunities and craft a forward-leaning brand vision

What You Get: Solid understanding of competitive positioning beyond immediate face-off competitors

White space opportunities for new brands, new products

Revised brand vision statement and brand architecture

Strategic Portfolio Assessment

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BRAND STRATEGY

How do you expand your reach without alienating your loyal consumers?

What We Do: Qualitative sampling of a brand’s entire user base for distinct attitudes and styles of use

Potential quantitative data-mining of existing A & U materials on your brand

Or potential custom quantitative segmentation based on qualitative insights

Refined portrait of brand loyalists as well as opportunity segments

Develop strategic recommendations around new segments and how to reach them

What You Get: Nuanced portrait of a brand’s major consumer segments

Understanding of relative size, attitudinal and behavioral composition of new consumer opportunities

Strategic User Segmentation

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BRAND STRATEGY

How can we reimagine our existing brands to drive sustainable growth?

What We Do: Identify specific quality dimensions for the brand to focus on based on proprietary models, stakeholder discussions and data-mining

Category deep dive on quality trends to facilitate tactical implementation

Category-specific tactics for repositioning along key quality dimensions

What You Get: Strategic roadmap

Revised brand architecture

Holistic set of tactics for execution

Repositioning Brands

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BRAND STRATEGY

How can your company credibly enhance its sustainability image?

What We Do: Sustainability touchstone review using proprietary model

Stakeholder Opportunity Assessment

Workshop to internalize appraisal

Co-creation of tactical recommendations

Internal communication within your organization

What You Get: Scorecard and analysis of a brand’s performance

Best tactical opportunities to enhance sustainability halo given consumer perceptions of the brand

Sustainability Appraisal

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BRAND STRATEGYWhat opportunities might exist in your core categories?

What We Do: Exploratory qualitative research on your product category: who uses it, how it’s used, where it fits into a larger context of category trends

Quantitative Attitudes and Usage (AAU) survey building off the qualitative work

What You Get: A comprehensive, research-based view of your brand within its category context

Understanding of where your brand fits into a larger category context in terms of trends

Solid foundation for strategic planning processes

Product Category Deep Dive

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BRAND STRATEGY

Re-positioning Case Study

Business Objective or Issues:

Upgrade the quality halo of an old snack food brand with untapped promise

Deliver comprehensive tactical solutions to achieve the quality goal

Results:

Clear strategic direction for re-positioning the brand in the Savoring zone of quality in the Culture of Food™

Holistic set of tactics to implement:

• Optimized brand architecture

• Re-vamped premium package graphics

• Product formulation suggestions

• Messaging guide-lines, including a real food brand narrative

Case Study: Re-positioning a Legacy Snack Food Brand

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NEW PRODUCT DEVELOPMENT

How do you find opportunities that haven’t been snatched up?

What We Do: Category specific trends review

Competitive landscape review of category across all major channels, including artisan/specialty

Exploratory immersion with early adopters/trend leaders in your category

What You Get: A thorough understanding of trends in your category

A glimpse at where leading edge consumers are taking, and want to take, your category

Platform for long-term strategic and innovation planning

Category White Space Identification

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NEW PRODUCT DEVELOPMENT

You know where you’re headed…but how do you get there?

What We Do: Gain thorough understanding of your current strategic business goals

Ethnographic immersion to uncover key behaviors with an eye toward innovation

Rapid collaborative platform generation for new products, retail experiences and services

Strategic filtering of platforms according to our trend information, competitive landscape review in your category and your strategic goals

Rapid Iteration/Refinement Process to create tangible ideas for products/services within each platform

Roadmap creation aligning each idea with key business units and timelines

What You Get: Solid, fleshed-out consumer-centric ideas for new products and services that meet your strategic goals

Design guardrails for each idea, including visualizations

A strategic roadmap based on the realities of your business and the timeline of consumer trends in your category

Pipeline Development

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MESSAGING AND COMMUNICATIONS

How do you move beyond “pitching” consumers to really “enticing” them with what your brand has to offer?

What We Do: Understand your brand’s communications strategy

Explore optimal Storytelling Frame to execute the strategy in a way that resonates culturally with the target audience

Uncover multisensory cultural materials to tell the right story the right way

Create, test and isolate best Master Narrative to frame creative work across all media formats

What You Get: A more effective, persuasive communications campaign

A consumer-tested Master Narrative to frame creative work of agencies

Brand Communications Development

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What are the right words to communicate your message to your target consumer?

What We Do: Custom qualitative research with your consumer to isolate category-relevant language

Filtering of consumer-centric language using proprietary linguistic techniques to generate optimal final words/phrases for message

What You Get: Language maps that summarize and interrelate key language

Consumer support for the power behind specific words, phrases

Tactical Messaging Development

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Which message works best for your consumer?

What We Do: We begin with your target consumer profile and your new messaging concepts

Custom tailored rapid testing of new messages, package communications, and package imagery in a group format

What You Get: Clear ranking of “best” vs. “worst” concepts from a consumer perspective

Consumer insights to support the ranking

Suggestions for refinement to better resonate with the target consumer

Rapid Concept Testing

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MESSAGING AND COMMUNICATIONS Tactical Messaging Development Case Study


Uncover basic associations with nutrigenomics among an early adopter wellness segment of the population

Develop language to communicate the power of naturally derived nutrigenomically enhanced foods

Results :

Discovered that associations with nutrigenomics were negative, primarily because early adopters knew little about it

Unearthed the basic linguistic problems with the word and suggested a positive, comforting metaphoric frame to use in all communications to soften its aggressive tone

Case Study: How to communicate around the emerging science of nutrigenomics for a functional foods manufacturer

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TRENDS

How can you convince your internal stakeholders that the future is coming and that it’s real?

What We Do: Intensive interaction with Hartman Group Ph.D.s and senior analysts

Kick off session with high-level trends overview

Field immersion into retail experiences and trend-leading consumers relevant to the client’s needs

What You Get: Deep understanding of where their category is headed or could head

Assumptions shattered; paradigm shift in how brands/products are perceived

Intimate contact with trends shaping the future competitive context

Client Trends Immersion

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TRENDS How is consumer culture changing in ways that will affect your brand?

What We Do: Proprietary research into high level consumer trends relevant to your brand’s category

Analysis of how these trends impact consumer behavior

High-level business implications for your brand

What You Get: Key consumer trends affecting your brand or business

Implications for strategic thinking

Trend White Papers

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SHOPPER INSIGHTS

What are the most effective marketing tactics to drive increased traffic and conversion rates in your category?

What We Do: Qualitative exploration of the entire shopping process in your category (out-of-store and in-store)

Quantitative validation of basic qualitative findings and insights

What You Get: Category shopping decision trees, including: How consumers choose specific channels; what they look for from specific channels and how they make decisions in-store

Relative power of key in-store marketing practices in the category

Comprehensive tactical recommendations to drive conversion rates

Category Shopping Deep Dive

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RETAIL EXPERIENCE DESIGN

How do we reposition your retail experiences to keep up with consumer trends in your category?

What We Do: Evaluate your retail brand/department’s positioning in the context of category-level trends

Conduct retail experience audit

Identify potential pathways for repositioning in line with category trends

Development of a holistic suite of tactics to implement the re-positioning using our proprietary Retail Tactical Toolset™

Design guard-rails and best practices in your category/department to pass on to design agencies

What You Get: Best practices in their category across the shopper experience

Strategy for executing a re-positioning toward best practices

Design guardrails and tactical suggestions for design agencies to use

Repositioning Retail Experiences

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Retail Experience Design Case Study


• Learn best practices in the prepared foods category

• Filter best practices for strategic goal of improving quality at a mass retailer’s prepared foods department

Results:

• Clear strategic pathway to higher quality appropriate for the retailer’s brand

• A holistic suite of tactics to implement at the departmental level (e.g. menu, product assortment, guide-lines for staff interactions, etc.)

Case Study: Contemporizing a Grocery Prepared Foods Department

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How We Do It: Specific Capabilities

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Custom Research Capabilities Overview

Qualitative analytics and ethnographic consumer exploration

• 1-on-1 approaches

• Social network parties

• Ethnographic techniques

• Custom ethnographic research

Comprehensive quantitative analytical capabilities

• Attitude & usage surveys

• Market structure perceptual mapping

• Custom segmentation studies

• Custom survey design

All these capabilities are directly managed by Ph.D. level social scientists

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Key Qualitative Approaches | 1-on-1

We observe how people live, shop, and use products

• We may watch and record how a family eats, or doesn’t eat, together by observing uses of the multiple dining areas in the typical home

• We can observe how consumers interact with product packaging, aspects of the consumption experience, and after-consumption activities (e.g., re-use or repurposing of packaging)

• “Shadowing” techniques – In public places, typically retail spaces, we may pose as consumers, unobtrusively observing consumer behavior

• “Shop and talk” sessions – In many cases, we talk actively with consumers about their behavior while we observe them

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Key Qualitative Approaches | Social network parties

Conversations that occur within groups of friends and/or relatives at private homes are markedly different than conversations you will hear in a focus group facility

• Participants, in a familiar and comfortable environment, are typically more forthcoming

• When we put on a social network event, we not only enjoy the benefits of a group that is already accustomed to interacting with one another, but we also learn how the group shares ideas, practices and preferences

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Key Ethnographic Techniques | Product Interaction

Product Show and Tell – Where we ask participants to collect two to three products that represent their view of a particular category (i.e. sustainable products). During the interviews, we’ll use these artifacts as a launching point for further discussion to elicit underlying emotions, perceptions, beliefs and values

Product Sets – We show consumers product sets representing a range of products within a category and use those products to prompt discussion on their various features and uses

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Key Ethnographic Techniques | Journaling and visual log-keeping

Allow us to understand consumers’ habits and ideas over a longer course of time than in-person interviews alone

Put interview data into a wider context to make it more meaningful

Assist consumers in remembering their own habits, serving as a springboard for conversation with consumers

Provide data points for pattern and visual analysis

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Key Quantitative Approaches - Custom segmentation

We employ two distinctly different forms of segmentation:

• Consumer segmentation – a way to group consumers that maximizes differences between the groups while minimizing differences within the groups, in order to identify and size marketing opportunities

• Occasion-based segmentation – a way to group activities or behaviors in terms of the characteristics and circumstances that define relevant occasions

The techniques we use to segment either consumers or occasions follow generally established methods, but we examine a range of segmentation “solutions” to determine those with the best fit to established norms or with the greatest impact on purchase and use behavior, guaranteeing actionable results

focused

open

anticipatedunanticipated

Party Fixings

Meal Eaten in Store

Random Emergency

After-Work Supplement

DestinationCrafting a Special Recipe

Workout Fuel

Coffee Shop Experience

Traditional WeeklySocializing with Friends

Recreation

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Key Quantitative Approaches Market structure perceptual mapping

The competitive landscape from a financial or business perspective can be substantially different from the point of view of consumers. Therefore, knowing how consumers perceive the market can be just as important to sound planning as financials

Perceptual maps are tools for visually showing how similar or dissimilar brands are with respect to key product attributes. On the map, brands that consumers treat as similar group closer together than brands they view as different

• Attribute ratings of individual brands determine how similar or dissimilar brands are

• The distance between brands indicates just how different or equivalent they are, based upon the attribute ratings

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Key Quantitative Approaches - Attitude & Usage Surveys

We deploy a comprehensive battery of questions with large national samples to understand as much detail about consumer perception and use of your brand within a firm category context

• Where does the brand stand on key metrics (awareness, penetration, cross-category usage, etc), and how is this changing over time?

• How do consumers perceive the brand vs. its competitors in terms of key consumer criteria in the category?

• What are the perceived strengths and weaknesses of the brand?

• Do current brand positioning and messaging strategies align with consumer brand perceptions?

• How do consumers use the brand? When? Where? With Whom?

• How do they define quality in the brand’s category?

• Where do they shop for the brand? Where would they prefer to shop for it?

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Integrated qualitative and quantitative research

Ethnographic methods and quantitative methods are complementary as the strengths of one approach compensate for the weaknesses of the other approach

• Understanding

• Generalizability

• Prediction

Used in concert, clients can have the greatest confidence in the insights and recommendations produced by a combination research design

Our expertise in both approaches permits seamless and timely design, execution, and delivery

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Recent Work on Consumer Culture• Obesity in America 2004

• The Vanishing Potato 2004

• A Brand Called Hope 2008

Syndicated Studies On Emerging Cultural Values

• Organic Consumer 2003, 2006

• Wellness Lifestyle Insights 2005, 2007

• Children's Wellness 2006

• The World of Sustainability 2007

• Sustainability 2008 (forthcoming)

Presentations/Workshops• Understanding Consumer Culture

• Understanding Today’s Food Culture

• The Consumer Side of Sustainability

• The Many Faces of Organic

Publications and Presentations

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1621 114th Avenue SE | Suite 105Bellevue, WA 98004tel. (425) 452-0818fax. (425) 452-9092www.hartman-group.com

Sign up for HartBeatwww.hartman-group.com/hartbeat

Thank you!

Linda Cox

The Hartman Group Overview

Health & Medicine

consumer culture

cultural values

consumer trends

culture of food

cultural perspective

consumer behavior

consumer engagement

world models world models