Nielsen Wire » Consumer Insight

What Makes A Megabrand?

Nielsen Wire — Thu, 03 Sep 2009 13:00:11 +0000

When a consumer thinks of a megabrand, she may think of Coke, Budweiser or Cheerios. These are all category leaders and are certainly “mega” in terms of their recognition around the world and sales figures. But looking beyond sheer size, these products are actually quite limited in their scope: soft drinks, beer and cereal, respectively. The word “megabrands” has a slightly different meaning for consumer goods companies and marketers: it relates to taking a power brand and extending its equity across related product categories to drive growth and efficiencies. For example, Crest had traditionally been known as a leading brand of toothpaste. But a few years ago, parent company P&G set out to take Crest’s familiarity with consumers and extend the reach of Crest-branded products relating to oral care: toothbrushes, whitening kits and oral rinses.

In a period when consumers and companies alike are spending their money more carefully, megabranding might seem like a no-brainer. Take a well-known brand and attach that name to other similar products. It certainly seems easier – and cheaper – than launching an entirely new brand. But to embark on a megabranding strategy is far more complex, and marketers must take a number of factors into account or they ultimately risk damaging the brand.

Read more about how some consumer goods companies are successfully extending their brands’ equity in the new edition of Consumer Insight.

From Generation Gap To Great Divide

Nielsen Wire — Fri, 28 Aug 2009 15:40:37 +0000

The conflict between hippies and their parents in the 1960s gave rise to a new term: the generation gap. Ever since, the phrase has been an easy way to define the differences in attitudes, politics and culture between the young and their elders. And while the generation gap seen today between aging Baby Boomers and a younger, fast-growing, multi-cultural population may not be as pronounced or dramatic as it was 40 years ago, the ramifications for the U.S. in 2020 are just as big, and perhaps even more so.

Beyond the typical issues such as values, morality, ethics, politics and religion, the generation gap extends to attitudes toward media. For example, younger people still watch a significant amount of TV (those age 25-34 watch more than 150 hours per month), but people age 65 and over watch 38 percent more. People age 35 and over spend more time online compared to the young. But when it comes to mobile phones, the young are the clear leaders in adopting and embracing new technology and products. For example, they are more likely to forsake landline phones in favor of mobile. They send texts with abandon – the average teenager sent or received over 35,000 messages in 2008! That’s 163 times more than the average 65 year old.

The U.S. in 2020 will be a very different marketplace from 2009, and the generation gap – the differences in values, outlooks and political perspectives – combined with the major demographic changes we analyzed last month, will play a starring role in shaping how media and technology are used.

Read a full analysis of the generation gap in the August edition of Consumer Insight.

Listening to Consumers Can Yield More Than Asking

Nielsen Wire — Fri, 21 Aug 2009 16:00:24 +0000

For decades, consumer product manufacturers have used research such as focus groups to test new products and marketing campaigns to help ensure that they resonate. And much of the time, those traditional techniques have been effective. But the Internet has added a new twist to consumer research, one that makes it easier for people to voice their opinions to the world. More and more, consumer goods firms are finding that listening to what customers are saying on message boards and dedicated web sites can yield even more insight to what people think.

Earlier this year, Tropicana – the leading juice brand in the U.S. – undertook a rebranding of its ubiquitous packaging. Gone was the graphic of an orange with a straw in it, a clear symbol that the juice inside the carton was fresh, and in was a more abstract graphic of a glass of OJ. No doubt, Tropicana took all of the traditional steps for testing the new packaging and rolled it out across the nation. But consumers who saw the new packaging in stores reacted strongly: they didn’t like it. And they weren’t shy about contacting the company or posting comments about it on the Internet.

Tropicana quickly relented and reverted to the previous packaging. A senior executive said, “What we didn’t get was the passion this very loyal, small group of consumers have. That didn’t come out in the research.” Tropicana listened to what its customers were saying and shifted course.

This is but one example of how companies are increasingly learning more about their customers by tuning into unprompted consumer expression, or “listening.” In an age where delivering what your customers want is more important than ever, companies in a range of industries are pairing listening with more traditional forms of research that are based on asking.

Read more about the importance of listening and how it can be used effectively in the latest edition of Consumer Insight.

The Impact Of Value-Themed Ads

Nielsen Wire — Tue, 11 Aug 2009 15:52:36 +0000

For more than a year, the U.S. consumer hit by the recession has changed the way he or she shops: a focus on value for money has led to some dramatic shifts in behavior that some say will last far beyond the current economic environment. With 80 percent of Americans saying they were stressed due to the economy, savvy retailers and consumer goods manufacturers have shifted their marketing to appeal to consumers watching their money more closely. But have those ads been successful? Nielsen IAG examined 67 such ads from 11 national advertisers and found that the same creative attributes that make for good advertising also make for good value messaging.

In short, value-message and recession-themed ads did not break through TV ad clutter at higher than ordinary rates. In fact, ad recall of the 67 ads evaluated was at rates lower than historical averages for the 11 advertisers. Packaged goods manufacturers saw no decline, while retailers registered minor declines. Financial service, insurance, auto and telecom advertisers posted significant declines.

Read more about value-themed ads, including case studies of those that were the most effective, in the new edition of Consumer Insight.

Win-Lose For Green Issues In Recession

Nielsen Wire — Fri, 07 Aug 2009 15:36:14 +0000

The recession has prompted consumers around the world to re-evaluate what’s important to them. Issues such as the economy, job security and other topics related to finances are top of mind for most people and, as a result, issues such as the environment have fallen. In fact, the latest edition of Nielsen’s Global Online Survey covering more than 50 countries found that global warming dropped to 14^th place on the list of “biggest and second biggest concerns.” That said, the issue remains important to citizens in many countries. More than half of respondents felt that their lives would be negatively impacted by climate change over the next decade.

But the environment is emerging as an inadvertent winner in the global economic downturn. Lower new car sales translate into fewer cars on the road and lower exhaust emissions. “Cash for Clunkers” programs like those started in some European countries and more recently in the U.S. mean that older, less fuel efficient vehicles are being replaced with new models. Families have rediscovered cooking at home, and are re-purposing leftovers as opposed to just tossing them out (in flusher times, households tended to waste up to 30 percent of food).

Despite having more pressing issues on their mind, consumers want retailers and manufacturers to step up and do what they can to make products more environmentally friendly, whether that means increased energy efficiency, ethically raised crops and animals or less packaging.

Building Customer Loyalty In A Recession

Nielsen Wire — Tue, 04 Aug 2009 14:17:43 +0000

Most businesses want to build a loyal customer base, people who will frequent their stores or buy their products on a regular basis and talk positively about their experiences with their friends and associates. Loyal customers provide a steady revenue stream, higher profit margins and confirmed evangelists who do much of their marketing for them.

With the country in the grips of a recession, however, consumers are focusing on price more than where they purchase goods. Recent surveys have reported a decline in corporate allegiance. But all is not lost for companies who are willing to take a hard look at classic marketing tool – consumer segmentation – and applying its concepts in new and innovative ways.

Best Buy, for example, launched a customer-centric program based on segmentation that now is at the heart of its corporate growth strategy. By classifying its best customers into five consumer segments, targeting them with marketing and changing the way stores look and training associates in new ways, the company has posted same-store sales growth in excess of 9 percent – more than double that of outlets that haven’t converted to the model and no small feat given the current economic challenges.

Nielsen has been at the forefront of consumer segmentation since the 1970s; its PRIZM system draws on a range of U.S. Census data and market research to classify all 114 million U.S. households into one of 66 consumer types. Systems like PRIZM can help companies build stronger relationships with customers through tailored marketing and help them retain consumer loyalty, even when conditions are less than ideal.

Read more about how consumer segmentation works and can help innovative companies develop a competitive edge in the new edition of Consumer Insight.

USA 2020: A Very Different Place

Nielsen Wire — Fri, 31 Jul 2009 18:05:17 +0000

Like many industrialized nations, the face of the United States is changing. An aging population, a declining birth rate combined with growing ethnic diversity will pose new challenges for the economy. Along with these demographic changes will come shifts in consumer spending, and consumer goods marketers will have to adjust tactics, focus and products if they hope to capitalize on what will be the new reality.

So what will be different in terms of consumer spending in just 11 years? A weakened Social Security system and underfunded private pension plans will make it difficult for a large number of retirees to maintain their current standard of living. From now until 2020, the Struggling and Lower Mid affluence groups will be the only ones to gain share, pulling households from all other groups. Household sizes will decrease. Consumer spending will grow modestly over the next 11 years, but actually fall after 2020. And the changes that occur after that year – both in terms of demographics and spending – will require marketers to dramatically change the way they do business if they hope to continue to grow.

Read an in-depth look at the demographic changes projected to take place in the U.S., and the challenges and opportunities for manufacturers in the July edition of Consumer Insight.

Harmonizing Data Around The Globe

Nielsen Wire — Wed, 22 Jul 2009 14:09:41 +0000

The topic of harmonizing data across global markets is not one that consumers think about. But to consumer product manufacturers, marketers and economists, it is an issue fraught with challenges, as variations in barcodes, brand names, packaging and sizes make it extremely difficult to obtain reliable comparisons from country to country. Take the simple product chocolate sprinkles:

In the U.S. and Belgium, they are used as toppings for cakes or ice cream. In the Netherlands, however, they are used as a sandwich spread. Likewise, compote is a dessert in southern Europe and a meal accompaniment in northern Europe. While the actual product consumed may be the same, when and how it is used can cause the product to be categorized differently.

Read more about how manufacturers can overcome the challenges of categorizing products around the world and drive better decisions in the latest edition of Consumer Insight.

Reaching The Hispanic Moviegoer

Nielsen Wire — Mon, 20 Jul 2009 15:12:38 +0000

In the early days of the Silver Screen, immigrant characters were not necessarily embraced. Indeed, it wasn’t until Margarita Cansino changed her name to Rita Hayworth did she hit the big time. Today, such a move would not be necessary, as attracting Hispanics is one path for a movie to become a blockbuster. While Latinos make up about 15 percent of the U.S. population, they represent 28 percent of today’s heavy moviegoers. Almost half of Latinos age 12 to 34 watch 11 or more movies a year (compared to 7 for whites and 8 for African-Americans), and half like to see movies within the first 10 days of release.

So what are they watching? Family and action adventure films are popular, but Hispanics command the highest share of audience in the horror/thriller and romantic comedy genres. And they are not just going to the cinema; Hispanic households are 24 percent more likely to purchase DVDs than the average American household.

By understanding the unique consumption habits of Hispanics, the movie industry can tailor a portion of its advertising to a box office constituency that can build brand awareness and success for movies to come. Read more about the movie-going habits of Hispanics in the current edition of Consumer Insight.

How Manufacturers Can Innovate Cost Savings

Nielsen Wire — Mon, 13 Jul 2009 17:16:41 +0000

As consumers continue to tighten their wallets, product manufacturers are feeling the pinch. Add higher costs for health care, energy and raw materials to the equation and many manufacturers are forced to cut costs to maintain sales and profitability. But if there is one overarching message for manufacturers, it’s this: do not pull back on innovation or marketing support. Nielsen research reveals that brands that continued to invest in these areas during a downturn performed significantly better than their peers once recovery takes hold.

Nielsen looked at more than 100 client engagements over a five year period to develop the four following guiding principles:

Reducing the package size: a risky move that must be balanced with a conveyance of additional auxiliary benefits such as convenience
Increasing the package size: A preferable option, but must communicate to consumers something more than value for money
Changing the packaging materials: a margin-enhancing move that can also leverage consumer goodwill
Changing the ingredient formulation: a high-risk move that must not compromise consumer experience or perceived quality

At the end of the day, consumers are seeking more value for their limited money. But value is more than price: it is about a quality product that satisfies a need. Cost-saving innovations, when done in isolation, tend to lead to declines in perceived value and appeal. Manufacturers need to know their consumers and communicate the auxiliary benefits gained from these innovations to ensure sales growth.

Read a full analysis of the pitfalls and rewards of the four principals described above and learn how manufacturers can innovate cost-savings in the current edition of Consumer Insight.