The Shape of Things to Come Martin Block Integrated Marketing Communications Northwestern University CADMEF/Chicago May 14, 2004.

The Shape of Things to ComeMartin BlockIntegrated Marketing CommunicationsNorthwestern UniversityCADMEF/ChicagoMay 14, 2004

Contemporary Marketing WorldData tsunami: POS, loyalty programs, accessible sales data, and customer databases Management demands for accountability: Six Sigma, Balanced Scorecard and ROIMeasurement issue has shifted to senior management and CFO from marketing department (major change over the past few years)Debate has shifted from the value of real sales data to the value of customer dataQuestions continue about the value of traditional media measures

Measuring Financial ReturnsFundamental Integrated Marketing Communication

Estimating the BaselineStore Level DataBaselinePromotion APromotion B

Constructing Marketing Strategy

Base Volume upBase Volume DownIncremental Volume UpIncremental Volume DownSustainTrade Promotion Building ProgramFranchise Building ProgramMajor Overhaul

Kinked Demand CurveTotal RTE per PoundDirection of curve changes at the kinkVolume does not continue to increase as price decreasesLowering price below the kink means lost revenue

Chart4 (4)

162569.064375

117069.63125

111874.015625001

112126.028124999

302352.684374998

324605.00625

168298.912499999

330170.268125004

247642.774999997

76329.4375000003

128257.546875

67121.6624999999

41360.5781250003

21512.4274999999

27622.0718749998

11206.05125

2983.545

291.65

2170.131875

2485.755625

2334.673125

1.3125

LostRevenue

Kink

Below$3.25/lbs

2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50 5.75 6.00 6.25 6.50 6.75 7.00 7.50

Chart4 (3)

189653.943749999

179252.31875

54997.7906249999

107414.937500002

78189.4874999994

7463.25

43996.3437500001

15669.734375

278

21

Chart4 (2)

112698.740624999

145352.687500001

113301.121874999

222755.330624997

169453.2875

68866.1875

84261.2031249997

51451.9281250005

41082.578125

21491.4274999999

Chart4

162569.064375

117069.63125

111874.015625001

112126.028124999

302352.684374998

324605.00625

168298.912499999

330170.268125004

247642.774999997

76329.4375000003

128257.546875

67121.6624999999

41360.5781250003

21512.4274999999

27622.0718749998

11206.05125

2983.545

291.65

2170.131875

2485.755625

2334.673125

1.3125

2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50 5.75 6.00 6.25 6.50 6.75 7.00 7.50

Sheet1

FeatureNo Feature

ReportReportReport

SumSumSum

PLBSQLBSPLBSQLBSPLBSQLBS

1162569.0643752.0019178.343751153390.7206250021162569.0643752.001.753.87284495.862656249629142.279131249

2117069.631252.25221630.0125295439.61875000072117069.631252.252.123.87248187.61825453059.4729375

3111874.0156250012.50331435.259375380438.75625000033111874.0156250012.502.373.87265141.417031252432952.440468753

4112126.0281249992.75454667.7562499998457458.27187499974112126.0281249992.752.623.87293770.193687498433927.728843747

5302352.6843749983.005189653.9437499995112698.7406249995302352.6843749983.003.123.87943340.3752499931170104.88853124

6324605.006253.256179252.318756145352.6875000016324605.006253.253.373.871093918.87106251256221.3741875

7168298.9124999993.50754997.79062499997113301.1218749997168298.9124999993.503.623.87609242.063249995651316.791374995

8330170.2681250043.758107414.9375000028222755.3306249978330170.2681250043.753.873.871277758.937643771277758.93764377

9247642.7749999974.00978189.48749999949169453.28759247642.7749999974.004.124.121020288.232999991020288.23299999

1076329.43750000034.25107463.251068866.18751076329.43750000034.254.374.37333559.641875001333559.641875001

11128257.5468754.501143996.34375000011184261.203124999711128257.5468754.504.624.62592549.866562499592549.866562499

1267121.66249999994.751215669.7343751251451.92812500051267121.66249999994.754.874.87326882.496375326882.496375

1341360.57812500035.00132781341082.5781251341360.57812500035.005.125.12211766.160000002211766.160000002

1421512.42749999995.2514211421491.42749999991421512.42749999995.255.375.37115521.735675115521.735675

1527622.07187499985.5001527622.07187499981527622.07187499985.505.625.62155236.043937499155236.043937499

1611206.051255.7501611206.051251611206.051255.755.875.8765779.520837500165779.5208375001

172983.5456.00170.859375172982.685625172983.5456.006.126.1218259.295418259.2954

18291.656.25181.2518290.418291.656.256.376.371857.81051857.8105

192170.1318756.500192170.131875192170.1318756.506.626.6214366.273012514366.2730125

202485.7556256.750202485.755625202485.7556256.756.876.8717077.1411437517077.14114375

212334.6731257.000212334.673125212334.6731257.007.127.1216622.8726516622.87265

221.31257.500221.3125221.31257.507.377.379.6731259.673125

Total2260385.22937493Total793850.287499984Total1466534.94187502

7905632.102924999194260.67721249

-20709.9334848484-14400.43657575751288628.5742875

0.1630013334

1.438146224

1317605.35048751532376.77953541

214771.429047916

Sheet2

1

01Group Total

1611718298614704

3014241424

38105265751068036

412420967912099

4348781618421062

Group Total3096686359117325

2.00

01Group Total

1695413843847979

3014331433

3897845478664570

4125371017412711

431420473414938

Group Total37499104132141631

3.00

01Group Total

1674988189989397

3053215321

38182633804556308

415310831313623

437646734214988

Group Total38717140920179637

4.00

01Group Total

16209621496835930

30216529155080

38295852198151566

417993348311476

4343175076655083

Group Total6502294113159135

5.00

01Group Total

16108026901679818

3019131913

3814946130065145011

41536245249886

4392343051739751

Group Total42257234122276379

6.00

01Group Total

16120364032752363

3014231423

384387395080138953

415324546910793

431325513613391

Group Total75911141012216923

Total01Group Total

1672557247634320191

308358823616594

38126977397467524444

41289464164270588

4353534105679159213

Group Total2903728006581091030

Sheet3

Price Promotion Response ModelStore Level DataAverage DiscountTPR 15%Feature19%Display10%Both24%

RTE Household PurchasesCategory very skewed to heavy users (15% of customers buy 40% of the volume)RTE Usage: One time buyers (1 purchase in 6 weeks), light buyers (2 purchases), regular buyers (3 and 4 purchases), heavy buyers (5 or more purchases)

Chart1

282250

212008

98704

69366

37846

26546

16192

11820

7434

5336

3482

2737

1786

1341

998

763

Heavy UsersTop 15%

Number of Items in 6 weeks

Households

Chart4

24.945969884912.5353410097

36.335185464712.5891475793

32.93422406413.3384982768

44.576990141512.6299376299

48.151398729412.2529046958

14.308710891917.8657665844

1.06083479542.7744910033

0.958491972619.8008466679

33.164484035513.0324977116

Feature

TPR Only

Chart5

24.945969884912.5353410097

36.335185464712.5891475793

33.546731383512.8856507246

34.034432007713.5072156241

33.164484035513.0324977116

Feature

TPR Only

Sheet1

Report

STATUSFEATURETPRONLYTPRRTENOBITEMSB$RTE$FeatureTPR OnlyPromotionTPRFeatureTPR OnlyPromotion

One TimeMean0.24945969880.12535341010.276765279122.741976970860.12005353413.5392858459One Time0.20.10.40.276765279One Time24.912.537.5

LightMean0.72670370930.25178295160.7937577827231.815433851686.05085956666.9709202483Light0.40.10.5Light36.312.648.9

SwitcherMean1.7119992480.69336684461.91760875915.198237689376.9428738349210.52759549618.0001864725Switcher0.30.10.5Switcher32.913.346.3

GM LoyalMean2.03353856740.57615970021.72056292784.5618570559.5394815244169.768388255816.8624723699GM Loyal0.40.10.6GM Loyal44.612.657.2

Kellogg LoyalMean2.22084014690.565128812.44677371794.612202771957.1067961469160.247275983217.3775396081Kellogg Loyal0.50.10.6Kellogg Loyal48.212.360.4

Post LoyalMean0.67043795620.83710462291.37481751824.685523114454.9751419303156.95225669115.1079987835Post Loyal0.10.20.3Post Loyal14.317.932.2

Quaker LoyalMean0.05111067430.13367407120.16846864564.817967367864.3827632527174.686690485611.5550619225Quaker Loyal0.00.00.0Quaker Loyal1.12.83.8

Pathmark LoyalMean0.04624871530.95542137720.98381294964.825154162455.9696813977148.89177102611.2174807297Pathmark Loyal0.00.20.2Pathmark Loyal1.019.820.8

TotalMean0.91258537980.35861456071.01171179712.751694791543.0491798218117.19369397329.5714121897Total0.30.10.5Total33.213.046.2

N780922780922780922780922780922780922780922

SIZE

ReportReportSTATUSMeanNStd. Deviation

STATUSFeatureTPRFEATURETPRONLYTPRSTATUSRTENOBITEMSB$RTE$One Time16.94574399642779184.9949646693

One Time24.9512.5437.4881.13367903520.24945969880.12535341010.2767652793.34One TimeMean122.741976970860.12005353413.5392858459Light33.44059946642110217.7491932428

Light36.3412.5948.92105.90374347810.72670370930.25178295160.79375778273.34LightMean231.815433851686.05085956666.9709202483Switcher85.594033043920197453.8558999571

Switcher32.9313.3446.27100.16395139011.7119992480.69336684461.91760875913.36SwitcherMean5.198237689376.9428738349210.52759549618.0001864725GM Loyal73.36034642652609538.4559278131

GM Loyal44.5812.6357.21123.83260898882.03353856740.57615970021.72056292783.68GM LoyalMean4.5618570559.5394815244169.768388255816.8624723699Kellogg Loyal82.10895615473719950.2778354356

Kellogg Loyal48.1512.2560.40130.75378767372.22084014690.565128812.44677371793.39Kellogg LoyalMean4.612202771957.1067961469160.247275983217.3775396081Post Loyal73.2476464102816245.6356608302

Post Loyal14.3117.8732.1769.64627614090.67043795620.83710462291.37481751823.30Post LoyalMean4.685523114454.9751419303156.95225669115.1079987835Quaker Loyal73.1292682927508441.848066293

Quaker Loyal1.062.773.848.30211337110.05111067430.13367407120.16846864562.53Quaker LoyalMean4.817967367864.3827632527174.686690485611.5550619225Pathmark Loyal81.2701926309773562.5716308768

Pathmark Loyal0.9619.8020.7644.93656913390.04624871530.95542137720.98381294962.21Pathmark LoyalMean4.825154162455.9696813977148.89177102611.2174807297Total45.951351130377518843.4903948207

Total33.1613.0346.201000.91258537980.35861456071.01171179713.33TotalMean2.751694791543.0491798218117.19369397329.5714121897

780922780922780922N780922780922780922780922

1Group Total01

1-23-45-67-8Group Total01Group Total01Group Total01Group Total033971782784588132397Group Total01Group TotalBlackWhiteHispanicAsianGroup Total

One Time35338364451255819968633767815104637827860647176317827864461138177827844307278706121134449267627827847717305617827818754354218526297065671

Light2381329465118791986671435215990526121144894163176121148209130026121133341292206167231166305066121139209220026121115466266876773212651052

Switcher1679330627163853048668535124210430616724011321559616724398817684616723245230957671398936826167242607190656167213865287326853135450804

GM Loyal25183638182531882996483118876715199247276715795187676714576512711193610350907671476829037671121641866972866385

Kellogg Loyal36675489261544912220956116321119380133180111938390280311193606610552457132011371119370504143111933215438913163659285

Post Loyal100810684878426472199258245718635942457188657124571402767155584870724571510947245744711912581242020

Quaker Loyal49571938690169012772781555102852715551159396155578872021541293861155511264291555389634213421278

Pathmark Loyal10867803921042362193022421541688466215417633912154143410182522619112504910114221541075107921543571222212471838

Group Total847181082314652780752475511926663352522619116344562746226191175651505402261911243662261911450628112922619153709102462248487314188333

MeanFeatureTPR Only

10.1253534101One Time0.24945969880.1253534101

0.276765279Light Buyer0.36335185460.1258914758

0.2494596988Regular Buyer0.33546731380.1288565072

1Heavy Buyer0.34034432010.1350721562

20.2517829516Total Market0.33164484040.1303249771

0.7937577827

0.7267037093

2

30.4397512941FeatureTPR Only

1.2646456833One Time24.912.5

1.1448563099Light Buyer36.312.6

3.4127208901Regular Buyer33.512.9

40.9897633944Heavy Buyer34.013.5

2.7920383831Total Market33.213.0

2.4939288666

7.3276641314

RTENOGroup Total0.3586145607

FrequencyPercentValid PercentCumulative Percent1.0117117971

Valid128225036.143174350336.143174350336.14317435030.9125853798

221200827.148421993527.148421993563.29159634382.7516947915

39870412.639418533512.639418533575.9310148773

4693668.88257726128.882577261284.8135921385

5378464.84632268014.846322680189.6599148186

6265463.39931516853.399315168593.0592299871

7161922.07344651582.073446515895.1326765029

8118201.51359546791.513595467996.6462719708

974340.95195166740.951951667497.5982236382

1053360.68329487450.683294874598.2815185127

1134820.44588319960.445883199698.7274017123

1227370.35048314680.350483146899.0778848592

1317860.22870401910.228704019199.3065888783

1413410.1717200950.17172009599.4783089732

159980.12779765460.127797654699.6061066278

167630.09770502050.097705020599.7038116483

174950.06338661220.063386612299.7671982605

183710.04750794570.047507945799.8147062063

192750.03521478460.035214784699.8499209908

202420.03098901040.030989010499.8809100013

211650.02112887070.021128870799.902038872

221430.0183116880.01831168899.92035056

23960.01229316120.012293161299.9326437211

24870.01114067730.011140677399.9437843984

25500.00640268810.006402688199.9501870865

26500.00640268810.006402688199.9565897747

27340.00435382790.004353827999.9609436026

28410.00525020420.005250204299.9661938068

29320.00409772040.004097720499.9702915272

30270.00345745160.003457451699.9737489788

31170.0021769140.00217691499.9759258927

32170.0021769140.00217691499.9781028067

33160.00204886020.002048860299.9801516669

34200.00256107520.002561075299.9827127421

35100.00128053760.001280537699.9839932797

3680.00102443010.001024430199.9850177098

3750.00064026880.000640268899.9856579786

38150.00192080640.001920806499.9875787851

3980.00102443010.001024430199.9886032152

4030.00038416130.000384161399.9889873765

4180.00102443010.001024430199.9900118066

4230.00038416130.000384161399.9903959678

4320.00025610750.000256107599.9906520754

4460.00076832260.000768322699.9914203979

4510.00012805380.000128053899.9915484517

4640.0005122150.00051221599.9920606668

4710.00012805380.000128053899.9921887205

4870.00089637630.000896376399.9930850968

4920.00025610750.000256107599.9933412044

5040.0005122150.00051221599.9938534194

5120.00025610750.000256107599.9941095269

5230.00038416130.000384161399.9944936882

5340.0005122150.00051221599.9950059033

5430.00038416130.000384161399.9953900646

5510.00012805380.000128053899.9955181183

5620.00025610750.000256107599.9957742259

5710.00012805380.000128053899.9959022796

5810.00012805380.000128053899.9960303334

6010.00012805380.000128053899.9961583871

6110.00012805380.000128053899.9962864409

6230.00038416130.000384161399.9966706022

6310.00012805380.000128053899.9967986559

6420.00025610750.000256107599.9970547635

6810.00012805380.000128053899.9971828172

7110.00012805380.000128053899.997310871

7210.00012805380.000128053899.9974389248

7310.00012805380.000128053899.9975669785

7610.00012805380.000128053899.9976950323

7810.00012805380.000128053899.997823086

7910.00012805380.000128053899.9979511398

8010.00012805380.000128053899.9980791936

8310.00012805380.000128053899.9982072473

8410.00012805380.000128053899.9983353011

9510.00012805380.000128053899.9984633549

9820.00025610750.000256107599.9987194624

10110.00012805380.000128053899.9988475161

10210.00012805380.000128053899.9989755699

10410.00012805380.000128053899.9991036237

11310.00012805380.000128053899.9992316774

13810.00012805380.000128053899.9993597312

13910.00012805380.000128053899.999487785

14710.00012805380.000128053899.9996158387

14910.00012805380.000128053899.9997438925

15910.00012805380.000128053899.9998719462

16910.00012805380.0001280538100

Total780922100100

Chart2

32.34366696197.11532329533.741718334813.828875110711.08627103631.8841452613

31.30471491645.983500622639.82727066913.36317497458.24001924461.2813195728

30.85679369327.544116961233.985074328517.28520671998.46619262131.8626156759

30.54654011026.401561543242.97152480110.3248111869.65528679320.1002755664

31.08389149786.971467183336.744895779614.78784787658.98258098831.4293166746

General Mills

Quaker

Kellogg

Post

Pathmark

Other

Chart3

32.34366696197.11532329533.741718334813.828875110711.08627103631.8841452613

31.30471491645.983500622639.82727066913.36317497458.24001924461.2813195728

31.04296553556.908761872937.262019331414.57662105818.83910763351.3705245687

30.59399298297.448185708735.875017404715.93386550558.75633042851.3926079697

31.08389149786.971467183336.744895779614.78784787658.98258098831.4293166746

General Mills

Quaker

Kellogg

Post

Pathmark

Other

Sheet2

Report

USAGERTE$RTENOB$

1Mean3.5392858459160.1200535341

Sum998963.43000000328225016968885.1100004

2Mean6.9709202483286.0508595666

Sum1477890.8599999942401618243470.6350002

3Mean11.87686993513.4127208901144.099606052

Sum1996145.52999998573575.99999999924218820.7891666

4Mean25.30926126117.3276641314270.5698209922

Sum3001526.53000003869016.99999999232087957.3507457

TotalMean9.57141218972.7516947915117.1936939732

Sum7474526.349999922148858.9999999891519133.8849124

36.1431743503998963.4300000030.133649061336.1431743503

27.14842199351477890.859999990.197723680527.1484219935

21.52199579471996145.529999980.267059802412.6394185335

15.18640786153001526.530000030.40156745588.8825772612

7474526.34999992

Report

Sum

STATUSGMQUAKEKELPOSTPRIVATEOTHERSTATUSGMQUAKEKELPOSTPRIVATEOTHER

One Time91290.000000002620083.000000000295236.000000002339031.9999999994312915318.0000000001One Time91290.000000002620083.000000000295236.000000002339031.9999999994312915318.0000000001282250.000000005

Light132736.99999999925370.9999999999168873.99999999956662.000000000334939.00000000065433Light132736.99999999925370.9999999999168873.99999999956662.000000000334939.00000000065433424015.999999999

Switcher324204.00000000479264.0000000002357071.999999994181610.99999999888952.000000000119570.0000000004Switcher324204.00000000479264.0000000002357071.999999994181610.99999999888952.000000000119570.00000000041050673

GM Loyal11349863631261339571118Loyal11971825088.999999999916841440465.000000000137841393391920

Kellogg Loyal45356481637612130823152All667949.000000005149807789595.999999995317769.999999998193023.00000000130714.00000000052148859

Post Loyal80919473336550.000000000118643

Quaker Loyal37023373.999999999930813330024General MillsQuakerKelloggPostPathmarkOther

Pathmark Loyal5062374863133596156One Time Buyers32.37.133.713.811.11.9

Total667949.000000011149806.999999998789596.00000006317769.999999998193023.00000000130713.9999999995Light Buyers31.36.039.813.48.21.3

Switcher30.97.534.017.38.51.9

Loyal Buyers30.56.443.010.39.70.1

ReportAll Buyers31.17.036.714.89.01.4

Sum

USAGEGMQUAKEKELPOSTPRIVATEOTHERGeneral MillsQuakerKelloggPostPathmarkOther

191290.000000002620083.000000000295236.000000002339031.9999999994312915318.0000000001282250.000000005One Time Buyers32.37.133.713.811.11.9

2132736.99999999925370.9999999999168873.99999999956662.000000000334939.00000000065433424015.999999999Light Buyers31.36.039.813.48.21.3

3178054.99999999739626.9999999999213725.99999999783608.000000000450698.99999999977860.9999999999573575.999999993Regular Buyers31.06.937.314.68.81.4

4265866.99999999764726.0000000001311760.000000002138468.00000000476093.999999997612102869017Heavy Buyers30.67.435.915.98.81.4

Total667949.000000011149806.999999998789596.00000006317769.999999998193023.00000000130713.99999999952148859.00000007All Buyers31.17.036.714.89.01.4

Sheet5

DESCDESCDESCDESCDESC

RankPercentCumeRankPercentCumeRankPercentCumeRankPercentCumeRankPercentCume

1CHEERIOS 123 20 OZ10.2710.271KEL FROSTED FLAKES 20 OZ11.8011.801POST FRUITY PEBBLES 17 OZ10.8110.811QUAK HONEY NUT OATS 34856 14 OZ7.127.121PM CRISPY RICE 123 15 OZ7.527.52

2CHEERIOS HONEYNUT 08 14 OZ7.6617.932KEL FROSTED FLAKES 25 OZ8.0819.882POST HONEYCOMB CEREAL 18 5 OZ7.6518.462QUAK SWEET PUFFS 18 OZ6.6213.742PM PUFFED WHEAT 6 OZ7.2014.72

3LUCKY CHARMS 14 OZ6.5324.463KEL RICE KRISPIES 19 OZ7.1126.993POST BANANA NUT CR 15 5 OZ6.4424.903QUAKER LIFE 12306110 21 OZ6.4120.153PM ENRICHED BRAN FLAKES 17 3 OZ6.6821.39

4CINN TOAST CRUNCH 14 OZ6.5130.974KEL FROOT LOOPS 15 OZ6.6333.614POST FRUITY PEBBLES 13 OZ5.2130.114QUAK FRST SHRED WHT BAG 17 OZ6.3726.514PM PUFFED RICE 6 OZ6.4827.87

5COCOA PUFFS 19 5 OZ5.7436.725KEL RAISIN BRAN 20 OZ5.6639.285POST CRANBERRY ALMD CRNCH 13 OZ4.5434.655QUAK HONEY GRM CEREAL BAG 13 OZ4.7131.225PM TOASTED OATS 15 OZ5.5533.42

6TRIX CEREAL 17 OZ5.1541.876KEL CORN FLAKES 123 18 OZ5.6544.936POST COCOA PEBBLES 1 LB 1 Z4.3839.036QUAK CINN LIFE CEREAL 21 OZ4.4735.706PM SHRD WHEAT BIT SZ 118 17 2 OZ5.0238.44

7CHEERIOS APL CINNAMON 21 OZ4.8146.687KEL FROSTED FLAKES 15 OZ4.4549.387POST GREAT GRAINS 16 OZ4.1243.147QUAK FRUITANGY OH S 14 OZ4.0039.707PM OATS MORE CEREAL 16 OZ4.6743.11

8TRIX CEREAL 12 OZ4.0950.788KEL CORN POPS 15 OZ4.4153.798POST RAISIN BRAN 25 OZ4.0547.198CAPT CRUNCH 16 OZ3.9543.658PM SUGAR FROSTED FLAKES 20 OZ4.6247.73

9TOTAL CEREAL 12 OZ4.0754.849KEL RAISIN BRAN 15 OZ4.3058.109POST FROST SHRED WHEAT 19 OZ3.7850.979QUAK APPLE ZAPS 14 OZ3.7347.389PM SHRD WHEAT FRST 10119 19 OZ3.9751.70

10REESE S PUFFS 14 25 OZ3.7058.5410KELLOGGS RICE KRISPIES 13 5 OZ4.2162.3010POST COCOA PEBBLES 13 OZ3.4854.4510QUAKER SWEET CRUNCH 15 OZ3.7151.0910PM CORN FLAKES 123 18 OZ3.8655.57

11COCOA PUFFS 13 75 OZ3.6862.2211KEL SPECIAL K 12 OZ3.9866.2911POST ALPHA BITS 15 OZ3.4457.8911QUAK CRUNCHY CORN BRAN 12 12 OZ3.6754.7511PM RAISIN BRAN 20 OZ3.7059.26

12CHEERIOS 123 0 15 OZ3.6665.8812KEL FRST M WHT BT SZ 19 OZ3.2469.5312NAB SPOON SHRD WHEAT 17 2 OZ3.2761.1612QUAK FROST FLAKER BAG 15Z3.6558.4112PM COCOA CRUNCHIES 13 75 OZ3.4762.74

13TOTAL RAISIN BRAN 18 OZ3.0768.9513KEL SPECIAL K 18 OZ3.1372.6613POST BLUEBERRY MORNING 13 5 OZ3.2064.3613CAPT CRUNCH JUMBO 22 OZ3.5661.9713PM LO FAT GRANOLA CEREAL 18 OZ3.4466.18

14CHEERIOS 3 08656 10 OZ2.4371.3814KEL APPLE JACKS 19 1 OZ2.8775.5314POST OREOS O S CEREAL 15 25 OZ3.1867.5414QUAK COCOA BLASTS 13 OZ3.3965.3614PM FROSTED FLAKES 15 OZ3.3669.53

15FIBER ONE CEREAL 16 OZ1.4672.8415KEL FROOT LOOPS 19 7 OZ2.5278.0515POST HONEY BUN RSTD 3 11 16 OZ3.1770.7215CAPT CRUNCH W BERRY 15 OZ2.9368.2815PM CRISPY CORN RICE CER 12Z3.2272.75

16TOTAL BROWN SUGAR OAT 15 25 OZ1.4574.2916KEL APPLE JACKS 15 OZ2.3280.3616POST MM ALPHA BITS 14 OZ3.0973.8116QUAK MARSH SAFARI 14 OZ2.9171.1916PM FRT FRST OATS BAG 32 OZ2.7675.51

17CHEERIOS HONEYNUT 20 OZ1.3175.6017KEL SMACKS 17 6 OZ1.9582.3117POST HONEY BUN W ALMD 3 1 16 OZ3.0276.8317QUAK OH S HONEY GRAHAMS 12 OZ2.7673.9517PM NF GRANOLA CEREAL 32 OZ2.7178.22

18GM COOKIE CRISP CC 12 25 OZ1.2376.8218KEL SMART START 17 5 OZ1.8884.1918POST HONEY SHRD WHEAT 20 OZ2.9779.8018CAPT CRUNCH CR BERRY 21 OZ2.7676.7118No Label1.9880.20

19TOTAL CORN FLAKES 3 08596 10 OZ1.2178.0319KEL CORN FLAKES 123 12 OZ1.8086.0019NAB SHRD WHEAT BRAN 18 OZ2.2682.0619QUAK TOASTED OATS BAG 12 OZ2.7379.4419PM GOLDEN CORN NUG 15 OZ1.9782.17

20CINN TOAST CRUNCH 20 25 OZ1.1779.2020KEL HNY CRNCH CORN FLAKES 15 1 OZ1.1887.1820POST RAISIN BRAN 20 OZ2.0784.1320KRETCH WHEAT GERM 20 OZ2.7182.1520PM COCOA CRUNCHIES 32 OZ1.8984.05

All Others19.71100.00All others (40 total items)11.77100.00All ithers (33 total items)14.05100.00All others (30 total items)17.85100.00All others (31 total items)15.95100.00

21BASIC 4 CEREAL 16 25 OZ1.093201427980.291127337321KEL CORN FLAKES 123 24 OZ1.050230533888.230476411621POST HONEYCOMB 14 5 OZ1.817720139285.951841254521QUAK OATMEAL SQUARES WNJ 16 OZ2.63249342784.782024298921PM FRUIT CRISPY RICE 13 OZ1.876089189685.9270313227

22CHEERIOS HONEYNUT 27 OZ1.049278814381.340406151522KEL RAISIN BRAN 25 5 OZ0.879062433389.109538844922POST GOLDEN CRISP 18 OZ1.65917282987.611014083522CAPT CRUNCH PEANUT BUTTER 15 OZ2.370883245887.152907544722PM HONEY CRUNCH CEREAL 14 5 OZ1.686487149587.6135184721

23LUCKY CHARMS 20 OZ1.025696202982.366102354423KEL HONEY FRST MINI WHTS 24 3 OZ0.844354386689.953893231623POST WAFFLE CRISP CEREAL 13 75 OZ1.654527888289.265541971723CAPN CRUNCH CRNCH BRY OOPS DONUT 13 OZ2.245651304489.398558849223PM NUTTY NUGGET 24 OZ1.67319967589.2867181471

24WHEATIES CEREAL 123 18 OZ0.992975329683.359077684124KEL CORN POPS 19 5 OZ0.828498552490.782391783924POST BRAN FLAKES 16 OZ1.652360249290.917902220924CAPT CRUNCH PNT BTR JUMBO 20 7 OZ1.995187421791.393746270924PM PUFFED WHEAT SUGAR FST 18 OZ1.627715627690.9144337747

25KIX CEREAL 3 9 OZ0.885527056684.244604740725KEL CRISPIX 12 OZ0.80115660291.583548385925POST GRAPE NUTS 24 OZ1.492574288192.41047650925QUAK LIFE CEREAL 3 0634 15 OZ1.918474661893.312220932725PM COCOA C RICE CEREAL 15 OZ1.607784415892.5222181906

26OATMEAL CRSP RAISN CEREAL 19 25 OZ0.869019228785.1136239694260.723375619792.306924005626POST GRT GRAINS PECAN 16 OZ1.429712756993.840189265926KRETCH WHEAT GERM H CRH 11 OZ1.725053600695.037274533326PM TOASTED OATS BAG 32 OZ1.442202041293.9644202317

27GM RICE CHEX 3 8606 12 OZ0.860323140785.973947110127KEL APPLE JACKS 11 OZ0.708893125493.01581713127POST SHREDDED WHEAT 15 OZ1.364064261295.204253527127QUAK CINN LIFE CEREAL 15 OZ1.698171351496.735445884727PM CRUNCH BEEERY TREATS 15 OZ1.304727785695.2691480174

28RAISIN NUT BRAN 21 OZ0.796502698786.770449808828KEL RAISIN BRAN CRUNCH 18 2 OZ0.703774312893.719591443828POST OREO O S CEREAL 12 OZ1.310802274296.515055801228QUAK CINN OAT SQUARES 16 OZ1.110040192297.84548607728PM FROSTED FLAKES 32 OZ1.288373970996.5575219882

29TOTAL CEREAL 18 OZ0.787806610887.558256419629KEL FUN PACK 8 PK 8 56 OZ0.692038498594.411629942329POST FRUIT N FIBRE 15 OZ0.939516678497.454572479729QUAK TOASTED OAT HONEYNUT 15 7 OZ1.033327432498.878813509329PM MAGIC STARS CEREAL 32 OZ1.263843248797.8213652369

300.751843128588.310099548130KEL COMPLT BRN FLAKES 123 17 3 OZ0.675308720695.086938662930POST GRAPE NUTS FLAKES 14 OZ0.811316314398.265888793930QUAK TOASTED OAT CEREAL 16 OZ0.980218598699.859032107930PM CORN FLAKES 123 48 OZ1.210693350699.0320585875

31KIX CEREAL 123 13 OZ0.688170077888.998269625931KEL ALL BRAN ORIGINAL 18 3 OZ0.663947453595.750886116431POST CINNACLUST RAIS BRAN 19 5 OZ0.732661984698.99855077850.140967892110031PM CRISPY RICE CEREAL 32 OZ0.9679414125100

32GOLDEN GRAHAMS 13 OZ0.684190512189.68246013832KEL FROOT LOOPS 11 OZ0.645220090296.396106206632POST GRAPE NUT O S 12 OZ0.581236916899.5797876952Total100Total100

33GOLDEN GRAHAM CEREAL 0 18 OZ0.663997901190.346458039233KEL VARIETY 10 PACK 9 63 OZ0.543093535796.9391997423330.4202123048100

34TOTAL RAISIN BRAN 24 5 OZ0.658986596291.005444635434KEL CRACKLIN OAT BRAN 17 OZ0.533854703197.4730544454Total100

35CLUSTERS CEREAL 17 25 OZ0.655301813291.660746448635KEL CRISPIX 17 9 OZ0.53360500598.0066594504

36BIG G BREAKFAST PACK 9 14 OZ0.616243113192.276989561736KEL PRODUCT 19 3 01925 12 OZ0.513878848998.5205382993

37GEN MILLS CORN CHEX 123 8 12 OZ0.595608328292.872597889937KEL ALL BRAN EXTRA FIBER 11 4 OZ0.475550178798.9960884781

38CHEERIOS MULTIGRN 3 16 OZ0.564656150893.437254040738KEL HC LF GRAN W RAISINS 18 OZ0.458196155499.4542846334

39OATMEAL CRISP W ALMONDS 17 5 OZ0.560087019893.997341060639KEL FROSTED FLAKES 61 9 OZ0.291397772999.7456824064

40HONEY NUT CHEX 15 25 OZ0.542989626694.540330687240KEL MINI WHT RAISINS SQ 16 5Z0.2543175936100

41COUNT CHOCULA 12 OZ0.539747017595.0800777047Total100

42FRENCH TOAST CRUNCH 15 75 OZ0.528987451195.6090651558

43GEN MILLS HONEY NUT CHEX 21 5 OZ0.507910492296.116975648

44KIX BERRY BERRY 12 75 OZ0.501425274196.6184009221

45GM MULTI BRAN CHEX WNJ 8 16 OZ0.471357444697.0897583667

46WHEATIES CEREAL 123 I O 12 OZ0.460892660897.5506510275

47CHEERIOS MULTI GRAIN 3 11 25 OZ0.411516568397.9621675957

48CHEERIOS APL CINNAMON 15 OZ0.411221785698.3733893813

49CHEERIOS TWN PK 123 35 OZ0.40311526398.7765046443

50WHEATIES RAISIN BRAN 18 OZ0.382038304199.1585429484

51KIX CEREAL 12362570 18 OZ0.324997862899.4835408112

52CINNAMON GRAHAMS 15 25 OZ0.229635678199.7131764893

53GM NESQUIK CEREAL 13 75 OZ0.159035235499.8722117247

54GEN MILLS SUNRISE CEREAL 12 5 OZ0.110985664799.9831973894

55WHEATIES HONEY FROSTED 14 75 OZ0.0168026106100

Total100

Sheet4

STATUSSTATUS

FrequencyPercentValid PercentCumulative PercentFrequencyPercentValid PercentCumulative Percent

ValidOne Time28225013.134877625813.134877625813.1348776258ValidOne Time28225036.143174350336.143174350336.1431743503

Light42401619.732146222719.732146222732.8670238485Light21200827.148421993527.148421993563.2915963438

Switcher105067348.89445980448.89445980481.7614836525Switcher20212125.882354447725.882354447789.1739507915

GM Loyal1192885.5512250925.55122509287.3127087445GM Loyal261493.34847782493.348477824992.5224286164

Kellogg Loyal1720498.00652811568.006528115695.3192368601Kellogg Loyal373034.77678948734.776789487397.2992181037

Post Loyal385151.7923465431.79234654397.1115834031Post Loyal82201.05260192441.052601924498.3518200281

Quaker Loyal245091.14055878031.140558780398.2521421834Quaker Loyal50870.65140948780.651409487899.0032295159

Pathmark Loyal375591.74785781661.7478578166100Pathmark Loyal77840.99677048410.9967704841100

Total2148859100100Total780922100100

USAGEUSAGE

FrequencyPercentValid PercentCumulative PercentFrequencyPercentValid PercentCumulative Percent

Valid128225013.134877625813.134877625813.1348776258Valid128225036.143174350336.143174350336.1431743503

242401619.732146222719.732146222732.8670238485221200827.148421993527.148421993563.2915963438

357357626.692118933826.692118933859.5591427823316807021.521995794721.521995794784.8135921385

486901740.440857217740.4408572177100411859415.186407861515.1864078615100

Total2148859100100Total780922100100

PercentPercent

Percent VolumePercent CustomersRatio

One Time13.136.136.3FeatureTPR OnlyPromotionPercent VolumePercent CustomersPercent on Promotion

Light19.727.172.7One Time24.945969884912.535341009737.4813108946Leading Brand Loyals*13.68.158.8

Switcher48.925.9188.9Light36.335185464712.589147579348.924333044Light Buyers and Switchers68.653.047.6

GM Loyal5.63.3165.8Switcher32.93422406413.338498276846.2727223408Others17.838.823.6

Kellogg Loyal8.04.8167.6GM Loyal44.576990141512.629937629957.2069277714*General Mills and Kellogg

Post Loyal1.81.1170.3Kellogg Loyal48.151398729412.252904695860.4043034252

Quaker Loyal1.10.7175.1Post Loyal14.308710891917.865766584432.1744774763

Pathmark Loyal1.71.0175.4Quaker Loyal1.06083479542.77449100333.8353257987

Total100100Pathmark Loyal0.958491972619.800846667920.7593386405

Total33.164484035513.032497711646.1969817471

Percent VolumePercent CustomersRatio

One Time13.136.136.3

Light Buyers19.727.172.7

Regular Buyers26.721.5124.0

Heavy Buyers40.415.2266.3

Sheet3

Mean1234Group Total

10.1336646312Under 44 to 1011 to 1718 to 3435 to 4950 plus

0.2252356984One Time13.422.517.743.441.439.01.7823876206054.848547153360.12005353413.539285845913.366463118622.523569840817.651191905843.397889573141.387107488739.04162088960.130.230.180.430.410.39

0.1765119191Light Buyer14.826.721.245.543.735.91.88141727360.025489604254.653922138386.05085956666.970920248314.788191664926.656973419821.241280162145.531032004143.720899838335.94451977590.150.270.210.460.440.36

0.4339788957Regular Buyer15.830.424.246.246.034.31.96891807840.06636520555.802009329144.09960605211.876869935115.787054615230.377090785624.178173897446.240083131845.962310905134.30786754860.160.300.240.460.460.34

0.4138710749Heavy Buyer16.737.131.745.951.831.12.16260245120.085855945557.5178932036270.569820992225.309261261116.66621205137.088459125531.701262922545.94801014751.779820517731.09025940370.170.370.320.460.520.31

0.3904162089Total Market14.827.722.345.044.735.91.91096380140.03424157655.4304803254117.19369397329.571412189714.821544623827.740272601522.343948256145.017264170544.715306975135.86747483320.150.280.220.450.450.36

1.7823876206

0

54.8485471533SizeIncome2 or more storesRTE $Total $

60.1200535341One Time3.654.83.5460.12

3.5392858459Light Buyer3.854.72.56.9786.05

20.1478819166Regular Buyer3.955.86.611.88144.10

0.2665697342Heavy Buyer4.357.58.625.31270.57

0.2124128016Total Market3.855.43.49.57117.19

0.45531032

0.4372089984

0.3594451978Under 44 to 1011 to 1718 to 3435 to 4950 plus

1.8814172736One Time13.422.517.743.441.439.00.13366463120.22523569840.17651191910.43397889570.41387107490.39041620891.7823876206054.848547153360.12005353413.53928584590.1787781350.33890675240.25466237940.49324758840.45466237940.27588424442.04201183430.04757224350.4809384164174.686690485611.5550619225

0.0254896042Light14.826.721.245.543.735.90.14788191660.26656973420.21241280160.455310320.43720899840.35944519781.88141727360.025489604254.653922138386.05085956666.9709202483

54.6539221383Switcher16.935.028.747.449.530.90.16912050850.34957517190.28674276820.47379686080.49464911140.30913542612.08508219530.077275493456.7183554801210.52759549618.0001864725

86.0508595666GM Loyal15.532.224.540.348.037.80.15486898710.32225263980.24455742410.40346760530.47998957110.3784382741.99313170260.062220352659.2004819277169.768388255816.8624723699

6.9709202483Kellogg Loyal14.628.425.045.845.537.00.14580541410.28410613780.25042437240.4580541410.45474850350.37014205311.98739770870.078224271555.0642475987160.247275983217.3775396081

30.1578705462Post Loyal10.524.223.242.946.338.50.1050061050.24175824180.23239723240.42938542940.46275946280.38542938541.86664148090.059489051158.8001978239156.95225669115.1079987835

0.3037709079Quaker Loyal17.933.925.549.345.527.60.1787781350.33890675240.25466237940.49324758840.45466237940.27588424442.04201183430.04757224350.4809384164174.686690485611.5550619225

0.241781739Pathmark Loyal10.421.618.233.440.050.10.1039925720.21634168990.18152274840.33426183840.39972144850.50092850511.79424216770.056654676351.2132435466148.89177102611.2174807297

0.4624008313Total Market14.827.722.345.044.735.90.14821544620.2774027260.22343948260.45017264170.44715306980.35867474831.91096380140.03424157655.4304803254117.19369397329.5714121897

0.4596231091

0.3430786755

1.9689180784SizeIncomeShop 2+ StoresRTE $Total $

0.066365205One Time3.654.80.03.5460.12

55.802009329Light3.854.72.56.9786.05

144.099606052Switcher4.256.77.718.00210.53

11.8768699351GM Loyal4.059.26.216.86169.77

40.1666621205Kellogg Loyal4.055.17.817.38160.25

0.3708845913Post Loyal3.758.85.915.11156.95

0.3170126292Quaker Loyal4.150.54.811.56174.69

0.4594801015Pathmark Loyal3.651.25.711.22148.89

0.5177982052Total Market3.855.43.49.57117.19

0.310902594

2.1626024512

0.0858559455

57.5178932036

270.5698209922

25.3092612611

Group Total0.1482154462

0.277402726

0.2234394826

0.4501726417

0.4471530698

0.3586747483

1.9109638014

0.034241576

55.4304803254

117.1936939732

9.5714121897

Mean

One Time0.1336646312

0.2252356984

0.1765119191

0.4339788957

0.4138710749

0.3904162089

1.7823876206

0

54.8485471533

60.1200535341

3.5392858459

Light0.1478819166

0.2665697342

0.2124128016

0.45531032

0.4372089984

0.3594451978

1.8814172736

0.0254896042

54.6539221383

86.0508595666

6.9709202483

Switcher0.1691205085

0.3495751719

0.2867427682

0.4737968608

0.4946491114

0.3091354261

2.0850821953

0.0772754934

56.7183554801

210.527595496

18.0001864725

GM Loyal0.1548689871

0.3222526398

0.2445574241

0.4034676053

0.4799895711

0.378438274

1.9931317026

0.0622203526

59.2004819277

169.7683882558

16.8624723699

Kellogg Loyal0.1458054141

0.2841061378

0.2504243724

0.458054141

0.4547485035

0.3701420531

1.9873977087

0.0782242715

55.0642475987

160.2472759832

17.3775396081

Post Loyal0.105006105

0.2417582418

0.2323972324

0.4293854294

0.4627594628

0.3854293854

1.8666414809

0.0594890511

58.8001978239

156.952256691

15.1079987835

Quaker Loyal0.178778135

0.3389067524

0.2546623794

0.4932475884

0.4546623794

0.2758842444

2.0420118343

0.047572243

50.4809384164

174.6866904856

11.5550619225

Pathmark Loyal0.103992572

0.2163416899

0.1815227484

0.3342618384

0.3997214485

0.5009285051

1.7942421677

0.0566546763

51.2132435466

148.891771026

11.2174807297

Group Total0.1482154462

0.277402726

0.2234394826

0.4501726417

0.4471530698

0.3586747483

1.9109638014

0.034241576

55.4304803254

117.1936939732

9.5714121897

BlackWhiteHispanicAsian

One Time28.653.913.04.5

Light30.352.313.34.2

Switcher27.356.613.52.7

GM Loyal19.065.610.94.5

Kellogg Loyal34.647.314.23.9

Post Loyal22.159.012.86.1

Quaker Loyal30.449.616.73.3

Pathmark Loyal19.466.511.52.6

Total Market28.554.413.23.9

BlackWhiteHispanicAsian

One Time28.653.913.04.5

Light Buyer30.352.313.34.2

Regular Buyer28.454.613.63.4

Heavy Buyer25.658.712.92.7

Total Market28.554.413.23.9

Distribution of RTE Usage

RTE Usage by Household CharacteristicsRTE usage highest among households with 4 to 10 and 11 to 17 aged members. Heavy buyers have larger households.Regular and heavy buyers spend more on RTE, spend more at the chain, and shop at more different chain stores (8.6% of heavy buyers shop at 2 or more).

Basic R-O-C-I Process

Measuring Financial ReturnsBasic ROCI Process is fundamental to IMCMust be based on real dataMust be strategicMarketing communication activity must be related to short and long term changes in base and incremental sales

Rise of the RetailerTesco Story and Loyalty Programs

History of Loyalty ProgramsLoyalty Programs started in the 1950s Sperry and Hutchinson Co. developed the first program known as the Green StampAttracted customers to the store and inspired purchases and lost effectiveness due to excessive use Point-of-sale data combined with the frequent shopper card the contemporary method.Use of loyalty programs and frequent shopper cards may becoming excessive.Retailers and manufacturers must find a unique use of the loyalty program and collected data to be distinguished from their competitors.Question of how the collected data should be used

Loyalty Program Customer Statistics80 percent of the retail profit comes from 20 percent of the retailers customersTop customers generally buy higher-priced items Bottom 20 percent tend to purchase items on discount only and contributed little to the stores profitAverage number of Loyalty Cards held by one customer is 3.2Only 20 percent of the U.S. population shop exclusively at one store and over 50 percent shop at two stores

The Tesco SuccessClubcard launchedTesco share exceeded Sainsbury share after Clubcard launchTurnover up 52% since the launch of Clubcard in 1995.Floor space up only 15%Food retailers market share in BritainSainsburysTescoAsdaSafewayFeb 19952000Source: IGD Copyright,dunnhumby 2002Tesco

Each customer has a unique dna profile derived from the products they buy you are what you eat Copyright,dunnhumby 2003

Product DNA Typing:Each product is assigned important to customer attributesBig Box (+) / Small Box (-)1Healthy0Prepacked (+) / Loose (-)0Fresh (+) / Longlife (-)-1Convenience0Cooking from Scratch0Branded (+)/Tesco Own Label (-)-1Kids0Value 1Finest0Foreign0Green0High (+)/ Low (-) Price-1Vegetarian0Meat0Adventurous0Traditional 0Low Calorie (+) / High Calorie (-)-1Value Oven Chips, 2.7 kg Copyright,dunnhumby 2002

We work with Tesco in many areasPricing StrategyFormat DevelopmentLocal Store Research Customer AcquisitionShopping AnalysisTargeted CommunicationPersonal RelationshipsBetter RangingMedia EffectivenessDatabase managementCustomer Insight Copyright,dunnhumby 2002

The Magnificent SevenOur image of customers is built from seven pieces This is how our customers behave. How do they see the products we want them to buy? Copyright,dunnhumby 2002

Tesco communicates very smartly

Local store information targeted and mailed frequentlyClubcard Statement targeted and mailed quarterlyClubcard Magazine targeted and mailed quarterlyRecipe Magazine targeted and retailed monthlyBespoke mailings targeted and mailed ad hocBaby Club targeted and mailed quarterlyTesco.com targeted via the webClubcard deals- targeted via the magazine Copyright,dunnhumby 2002

The Looming Retailer BattleRetailer power will continue to expand Some retailers will become their own media message delivery vehicles The retail warwill be between the Wal-Mart logistical model and the Tesco customer data model

Marketing Mix ModelsManaging Marketing Communication

Pressure for sales growthExplosion of scanner-based knowledge regarding price/promo liftAdvertising impacts generally are not visible in syndicated scanner dataMoney follows knowledge/informationTrades role in the mix has increased dramatically over time The power of brands has erodedTo increase its share of budget, and re-vitalize brand equity, marketing communication decision making processes must leverage the data The Marketing Mix Modeling is bornThe CPG Industry Solution

Shift marketing dollars toward mix elements and tacticsthat generate the strongest ROI

"The pressure is on in most organizations because the chief financial officer is asking 'What are we getting for what we're spending? How do I improve the return on investment? Don Schultz Professor of Integrated Marketing - Northwestern UniversityThe CPG Industry Solution

Shift marketing dollars toward mix elements and tacticsthat generate the strongest ROIThe Problem

Marketing Mix ModelStatistical Modeling Deseasonalizing Baselining Bump Analyses HistoricalSales DataMarcomSpendingAssumptions andTheoriesROI

Ten Year Financial ModelAnnual Sales Revenue by YearShort Term versus Long TermShort-termBrand EquityPredictive Year

Growing Importance of Marketing Mix ModelsAssembling sufficient disaggregate historical data still a challenge for most organizationsDetermining synergistic effects and the value of IMC programs the analytical challenge Importance of measuring long-term brand value as part of the model

Time BudgetsTracking Media and Entertainment

Average U.S. Time Budget in 1972 Minutes per Day

MinutesMinutes1. Main Job 22517. Study--Clubs 282. Second Job 518. Television 923. Work--Other 1219. Radio 44. Travel to Job 2520. Newspapers 245. Marketing 1421. Magazines 66. Shopping Errands 1822. Books 57. Cooking 4423. Movies 38. Home Chores 5824. Social Activity639. Laundry 2625. Conversation 1810. Pets and Garden 326. Active Sports 611. Other House 2427. Outdoors 212. Child Care 3328. Entertainment 513. Personal Travel 3129. Cultural Events114. Leisure Travel 1930. Resting--Naps 1915. Eating 8131. Other Leisure 2016. Personal Care 69Sleep459

Time Spent with MediaHours per WeekSource: Veronis Suhler Stevenson

Chart1

752174521101941124919972643426186116136

710174565101911135219982754554186118134

706162617103939135512815380183119134

805616381379451257225859107180109135

766626971479531360222960136177106128

724627581569941458220167154176109125

7156278915910131367218875169173110123

7116281216410461373317984182171107122

7096383016810681483416690193171109122

6936383417310741491416398205169109121

69763845180109814985152109216168108119

Network Affiliated Stations

Independent Stations

Basic Cable & Satellite Networks

Premium Cable & Satellite Services

Radio

Box Office

Home Video

interactive TV

Recorded Music

Video Games

Consumer Intrernet

Newspapers

Consumer Books

Consumer Magazines

Chart2

75217452110194112492643426186116136

71017456510191113522754554186118134

70616261710393913552815380183119134

80561638137945125725859107180109135

76662697147953136022960136177106128

72462758156994145820167154176109125

Network Affiliated Stations

Independent Stations

Basic Cable & Satellite Networks

Premium Cable & Satellite Services

Radio

Box Office

Home Video

Recorded Music

Video Games

Consumer Intrernet

Newspapers

Consumer Books

Consumer Magazines

Sheet1

Broadcast TVBasic Cable & Satellite NetworksPremium Cable & Satellite ServicesSatellite RadioBox OfficeHome Videointeractive TVRecorded MusicVideo GamesConsumer IntrernetNewspapersConsumer BooksConsumer Magazines

19970113.3638.6728.1985.4954.1919.620.3751.9679.4246.27

19980123.2640.7830.3890.7359.9524.1126.8952.3182.7448.54

19990132.645.0832.1595.172.1462.9526.3440.5552.6387.3447.98

20000144.2443.732.75100.722.3861.2425.8949.6452.4886.1347.7

20010155.1647.57035.45108.42.957.9226.8968.752.8484.4546.96

20020170.4751.730.0739.68113.883.4752.5830.4784.7353.3587.8942.01

20030181.1254.410.5239.35126.864.7250.2334.9597.7653.2290.0746.43

20040192.6856.511.441.07136.386.2147.6239.14110.4654.0291.2647.91

20050198.9859.772.9843.99147.927.4345.2142.45122.6754.6192.2748.55

20060208.1863.374.8246.46156.868.3444.446.48134.2555.1593.848.54

20070217.9665.136.4750.26169.029.5341.0651.58145.2656.0695.6248.66

Network Affiliated StationsIndependent StationsBasic Cable & Satellite NetworksPremium Cable & Satellite ServicesRadioBox OfficeHome Videointeractive TVRecorded MusicVideo GamesConsumer IntrernetNewspapersConsumer BooksConsumer Magazines

199775217452110194112492643426186116136

199871017456510191113522754554186118134

1999706162617103939135512815380183119134

2000805616381379451257225859107180109135

2001766626971479531360222960136177106128

2002724627581569941458220167154176109125

20037156278915910131367218875169173110123

20047116281216410461373317984182171107122

20057096383016810681483416690193171109122

20066936383417310741491416398205169109121

200769763845180109814985152109216168108119

1997-2002-0.8-18.57.891.12.13.7-5.314.243.1-1.1-1.3-1.6

2002-2007-0.80.12.22.921.111.123.2-5.510.47.1-0.9-0.2-1

19971998199920002001200220032004200520062007

Network Affiliated Stations752710706805766724715711709693697

Independent Stations1741741626162626262636363

Basic Cable & Satellite Networks521565617638697758789812830834845

Premium Cable & Satellite Services101101103137147156159164168173180

Radio94191193994595399410131046106810741098

Box Office1213131213141313141414

Home Video4952555760586773839198

interactive TV122223445

Recorded Music264275281258229201188179166163152

Video Games34455359606775849098109

Consumer Intrernet265480107136154169182193205216

Newspapers186186183180177176173171171169168

Consumer Books116118119109106109110107109109108

Consumer Magazines136134134135128125123122122121119

199719981999200020012002

Network Affiliated Stations752710706805766724

Independent Stations174174162616262

Basic Cable & Satellite Networks521565617638697758

Premium Cable & Satellite Services101101103137147156

Radio941911939945953994

Box Office121313121314

Home Video495255576058

Recorded Music264275281258229201

Video Games344553596067

Consumer Intrernet265480107136154

Newspapers186186183180177176

Consumer Books116118119109106109

Consumer Magazines136134134135128125

2002

Network Affiliated Stations7241.9835616438119.0136986301

Independent Stations620.169863013710.1917808219

Basic Cable & Satellite Networks7582.0767123288124.602739726

Premium Cable & Satellite Services1560.427397260325.6438356164

Radio9942.7232876712163.397260274

Box Office140.03835616442.301369863

Home Video580.15890410969.5342465753

interactive TV20.00547945210.3287671233

Recorded Music2010.550684931533.0410958904

Video Games670.183561643811.0136986301

Consumer Intrernet1540.421917808225.3150684932

Newspapers1760.482191780828.9315068493

Consumer Books1090.29863013717.9178082192

Consumer Magazines1250.342465753420.5479452055

591.7808219178

1. Main Job225236.15573151.2439.5

2. Second Job4.93713692.4204.2

3. Work--Other11.52040033.334.5

4. Travel to Job24.936129650.749.1

5. Marketing143196134.440.7

6. ShoppingErrands 17.917.942.1177530.558.7

7. Cooking43.853280960.672.3

8. Home Chores58.463.3401360.995.9

9. Laundry25.553.2282529.586.4

10. Pets and Garden 3.33.31316912.227

11. Other House23.755.7309737.762.9

12. Child Care32.658.1337037.686.7

13. Personal Travel 30.830.837.5141063.548.5

14. Leisure Travel19.332.21036.342.945

15. Eating81.350.9258998.582.5

16. Personal Care68.545.6208198.269.8

17. Study--Clubs27.764.9421420.3136.5

18. Television91.699980169.7131.4

19. Radio3.6183248.243.9

20. Newspapers23.832102448.649

21. Magazines6.42144111.356.6

22. Books5.3245767.174.6

23. Movies3.2256252160

24. Social Activity 63.06395.1904054.6115.4

25. Conversation18.435122541.244.7

26. Active Sports5.5277295.796.5

27. Outdoors2.418.63453.177.4

28. Entertainment5.430.59283.7145.9

29. Cultural Events 0.60.68.1650.785.9

30. Resting--Naps19.445.4205718.6104.3

31. Other Leisure19.544.9201525.759.7

Sheet2

Broadcast TelevisionCableRadioEntertainmentInternetNewspaperBookMagazinesB-to-BTrainingBusiness InfoYellowOutdoorConsumer PromoB-to-B PromoDirecEventPR

199734721460471349161843550656752160211915519345323963820611377404730273316153689059371472

199836983513331507368492806960017169152044121212344204089612119441331450339783962067601790

1999377515785616930744461401663087180872136922722360064399712952483233473366764140376312345

2000424166381619069784161984265939180122234524068392254716613961523536466401294459187003118

2001366646981318200822202352861942179252106121022402094715114693519334615381614472593012900

2002396827693519368871712637962218188492106919203371504806214854523235591385384586096502927

20034082482998205559371830362639761952721408194093863850237154195368368364042249116105263050

200444189896872257410115134127669761999522655201424050552823161125577382934279651523113263395

200545108957282477410805037804711952042523671212034276455876169125845402684536554460122773820

2006480931032162741511554941486759332097924634225444536659362177946178421924839157727133584182

2007495231104853037912402545287816532161025822242304830763559187576605446755231960690147204538

1997-20022.710.87.57.136.81.93.31.9-0.12.84.75.55.33.344.410.214.75.5

2002-20074.57.59.47.311.45.62.84.24.85.45.74.84.84.76.35.98.89.26.3

Chart3

18.096153846217.807692307711.96153846155.07692307693.57692307692.61538461542.23076923080.94230769230.65384615380.5

17.51923076921712.80769230775.28846153853.57692307692.57692307692.269230769210.86538461541.0384615385

18.057692307716.692307692313.84615384625.40384615383.51923076922.57692307692.28846153851.05769230771.01923076921.5384615385

18.173076923116.653846153814.90384615384.96153846153.46153846152.59615384622.09615384621.09615384621.13461538462.0576923077

18.326923076915.923076923116.23076923084.40384615383.40384615382.46153846152.03846153851.15384615381.15384615382.6153846154

19.115384615415.115384615417.57692307693.86538461543.38461538462.40384615382.09615384621.11538461541.28846153852.9615384615

19.480769230814.942307692318.23076923083.61538461543.32692307692.36538461542.11538461541.28846153851.44230769233.25

20.115384615414.865384615418.76923076923.44230769233.28846153852.34615384622.05769230771.40384615381.61538461543.5

20.538461538514.846153846219.19230769233.19230769233.28846153852.34615384622.09615384621.59615384621.73076923083.7115384615

&A

Page &P

Projection

Radio

Broadcast TV

Cable and Satellite TV

Recorded Music

Daily Newspaper

Magazines

Books

Home Video

Video Games

Internet

Sheet3

19971998199920002001200220032004200520062007

Network Affiliated Stations752710706805766724715711709693697

Independent Stations1741741626162626262636363

Basic Cable & Satellite Networks521565617638697758789812830834845

Premium Cable & Satellite Services101101103137147156159164168173180

Radio94191193994595399410131046106810741098

Box Office1213131213141313141414

Home Video4952555760586773839198

interactive TV122223445

Recorded Music264275281258229201188179166163152

Video Games34455359606775849098109

Consumer Intrernet265480107136154169182193205216

Newspapers186186183180177176173171171169168

Consumer Books116118119109106109110107109109108

Consumer Magazines136134134135128125123122122121119

199719981999200020012002200320042005

Broadcast TV17.80769230771716.692307692316.653846153815.923076923115.115384615414.942307692314.865384615414.8461538462

Cable and Satellite TV11.961538461512.807692307713.846153846214.903846153816.230769230817.576923076918.230769230818.769230769219.1923076923

Radio18.096153846217.519230769218.057692307718.173076923118.326923076919.115384615419.480769230820.115384615420.5384615385

Recorded Music5.07692307695.28846153855.40384615384.96153846154.40384615383.86538461543.61538461543.44230769233.1923076923

Daily Newspaper3.57692307693.57692307693.51923076923.46153846153.40384615383.38461538463.32692307693.28846153853.2884615385

Magazines2.61538461542.57692307692.57692307692.59615384622.46153846152.40384615382.36538461542.34615384622.3461538462

Books2.23076923082.26923076922.28846153852.09615384622.03846153852.09615384622.11538461542.05769230772.0961538462

Home Video0.942307692311.05769230771.09615384621.15384615381.11538461541.28846153851.40384615381.5961538462

Video Games0.65384615380.86538461541.01923076921.13461538461.15384615381.28846153851.44230769231.61538461541.7307692308

Internet0.51.03846153851.53846153852.05769230772.61538461542.96153846153.253.53.7115384615

Shifting Media Consumption PatternsSource: Veronis Suhler Stevenson

Hours/WeekAnnual GrowthProjected Growth20021997-20022002-2007Radio19.11.12.0Cable and Satellite TV17.68.02.3Broadcast TV15.1-2.2-0.7Recorded Music3.9-5.3-5.5Daily Newspaper3.4-1.1-0.9Internet3.043.17.1Magazines2.4-1.6-1.0Books2.1-1.3-0.2Video Games1.314.210.4Home Video1.13.711.1

The Changing Media Entertainment EnvironmentMedia is question of time allocation for the consumer who can increasingly negotiate with the providerEntertainment is the key to attracting and holding audience attention Coming media technologies will accelerate the change Media is increasingly consumed simultaneously and should be used with this in mind

Demographic Shifts18 to 34 Myth

Demographic Targeting18 to 34

Growth by age of populationFor the projectable future, the share of population under the age of five and between five and seventeen will never be higher than it is today.

Growth in population over sixty-five will remain slow for the next decade and then increase, from 13% of the population to around 20% in 2030.

Eighty-five plus is most rapidly growing segment, doubling by 2025 and increasing by fivefold by 2050.

The median population age is older now than it ever has been (35.7 in 2000) and will continue to advance through 2050.

18 to 34 Target ?CPM on Network TV$23.50 for 18 to 34 $9.50 for 35+ People aged 50+ account for half of all discretionary spending watch more television (than young people)go to more moviesbuy more CDsYET are the focus of less than 10% of advertisingIn 1940, 6.8% were 65+, in 2000 12.4% were 65+ Real income with head under 30 fell 16% between 1973 and 19903 out of 4 men between 18 and 24 were still living at home in 1990 (largest proportion since the depression)Only 1 in 5 of youth-oriented Honda Civics are sold to those under 26Brand loyalty of female household heads (Nielsen study)67% 18 to 34 are willing to change brands70% aged 35 to 64

*Frequency10

9

8

7

6

5

4

3

2

110 9 8 7 6 5 4 3 2 1 SpendingDecilesGoldSilverBronzeTinTarnishedCustomer groups defined by incorporating frequency of purchase with spendingREAL BEHAVIOR!

In one retailer, 19% of shoppers are classified as Gold, 20% as Silver, and 21% as Bronze

These 19% of Gold customers account for nearly 70% of total sales

New Marketing ThinkingMarkets must be defined in terms of real behavior to show financial return The youth myth and mass demographic marketing need to be left in the past

Thank you!

Bullet slideThis will be one of the most commonly used slides.Replace the existing text contents by highlighting and typing over.Use the promote and demote buttons on the toolbar to change between level settings and bullets automatically If all your information will not fit onto the slide, challenge its length or run onto two slides using the same slide title followed by: - continued.dunnhumby story and image panelOn all slides a section has been created on the right to accommodate images and quotes. Different examples of these are shown throughout the template.dunnhumby story and image boxes are at the end of the template, preformatted so you can copy and paste them on to your slides when appropriate. If you are using a quote without a picture do not use a box (see Multiple bullet level slide for an example).Information in the main section of the slide should not extend into the imagery and facts section.

Much of the interest in accurate marketing metrics and ROI measurement was driven by an escalating trend in investment to drive topline growth.

The push to drive growth resulted in increased focus on the ability to have an immediate impact on sales. Over time, there has been an increased sensitivity to the need to measure the impact of each element of the marketing mix, and to examine the impact on consumer responses, as well as sales and financial impacts.The clear call across the CPG industry is for improved marketing metrics - A balanced scorecard that will track the impact of marketing activities on volume, revenue and profitability, and provide insights regarding the ability of marketing programs to reach and retail key consumer segments.

The purpose of Consumer Marketing Mix is to provide a marketing scorecard that provides clear guidance on improvements in marketing effectiveness and gains in ROI