From post World War II to about 1990, industry supply and aggregate consumption were approximately equal. In this situation, pricing power is strong. However, the impact of globalization, technology and productivity gains has generated a significant oversupply situation – a 25% increase. The impact of this oversupply situation on pricing power has been dramatic, driving pricing power down by 43%.

The traditional supply-driven approach pushes supply into the market. As demand shifts, the push approach can lead to significant misalignment with dynamic demand. Companies with offers that are misaligned with demand end up as commodities that are a “Price Taker.”

Win on Demand
Going forward, successful growth companies will compete on supply, but will win on demand. The “Demand Paradigm” anticipates current, latent and emerging demand and creates pull for its offers. Offers that are in demand create pricing power and the ability to be a “Market Maker.”

The demand chain signifies the arrival of a new level of precision where manufacturers, retailers and media companies look at the consumer through a single integrated lens.

Demand Landscape
“Life Enrichment” or the “forces and factors” that shape demand, manifests itself across the ways consumers live, learn, work and play. By redefining the market around Life Enrichment, new opportunities for growth are opened.

The Demand Landscape creates a more precise understanding of usage need states and shopping drivers and benefits sought from a retailer. Detailed economics are created for each of these intersections to determine where the most profitable opportunities are found.

Re-Thinking – Not Re-Engineering
The constant companion of change is opportunity. Now is the time to seize the moment to embrace the arc of the growth. A forthcoming book,  How Companies Can Win, co-authored by Nielsen CEO David Calhoun and Rick Kash rings the bell of change and defines the strategies of how to create competitive advantage.

Dave Calhoun, CEO, The Nielsen Company

Innovation, insight, trends. Those words sound familiar for a reason.

They’re words that are driven by the habits of consumers. They’re also words that speak to the exciting momentum of our business environs.

A family, whose last name happens to be Nielsen, figured this out long ago. The late Art Nielsen Sr. envisioned the power of consumer habits and embraced new technologies and methodologies with such gusto that his impact is still being felt.

No less so is the impact of his son, Art Nielsen Jr.

As we celebrate Art’s 91st birthday today, I’m reminded of the responsibility we carry to push boundaries every chance we get.

Early in his career, Art Jr. spent much of his time digging deep into the data. He was on the frontline of Nielsen’s collection business auditing storefronts no bigger than the average garage. He intuitively knew that more could be done with information if it was collected in more meaningful ways. He also had a deep understanding of the value that could be assigned to unbiased research.

Art was certainly concerned with “what” the company could gather, but he was even more concerned with ensuring Nielsen identified the “so what” component. Data without that critical look around the corner at what was coming next wouldn’t be enough.

He had cracked the code on success for our clients.

This foundation served as powerful bedrock to tackle the tough issues of building audience panels, designing devices that drove insight on consumer habits and figuring how marketers could reach customers.

This is an underpinning philosophy that we proudly own today. And we owe it to Art, as much as we owe it to clients, to supercharge it by promoting a healthy clash of ideas.

The company that Art and his dad built were enablers for the many bold plays we have made in more recent years.

Whether it’s our global expansion in exciting growth markets like India and China or the culture of innovation so rooted in our Latin American businesses…I know we’re perpetuating a cycle of winning big for our clients.

Our market leading capabilities in the social networking space and the cutting edge investments we’ve made in areas such as neuroscience are also major reflections of our ability to position ourselves in front of the pack.

We’re also taking a leaf from the history books in keeping our alignment with the broader marketplace. We listen harder than ever to how consumers engage with products, store and online retail fronts and media platforms.

To that end, our approach has never been simpler. We measure what you watch and what you buy. If we adopt that agnostic approach, we mirror the everyday habits of consumers and create an environment that becomes far more predictive than it has ever been.

When the Nielsen family took a risk on measuring television viewing habits in the middle of last century, they knew one thing: clients would need to tap into a new medium.

Today, the momentum for new mediums and new platforms is evolving at a much faster pace. Getting in front of measuring those is now where the modern-day Nielsen company spends a lot of time.

In fact, we take it a few steps further to determine how consumers spend their time across multiple mediums and how they transition from one to another. No one else has these capabilities.

Our innovation teams wake up every day looking around the corner at what’s next.

And our success on the innovation and insight front is also thanks to Art and the many great people who followed him. We should never forget it.

Happy Birthday Art. Our thoughts and best wishes are with you on this special day.

A primary theme of the high-energy general session on Day Two of the Nielsen Consumer360 conference was encouraging attendees to use the current recession as a learning opportunity, in order to build better relationships with consumers and/or reinvent business models.

From Nielsen’s James Russo, there was talk of the fact that great companies such as GE, Disney, Microsoft, and HP were started during economic downturns. And, he felt that consumers may soon be spending more, albeit with some restraint. Signs of the recession were everywhere, from a global reduction in out of home entertainment expenditures, to canning and freezing supplies being a top growth category, to a slowing of growth in health and wellness and organics. Home has become the new “center.”

Kraft’s Nick Sorvillo said his company has multiple online consumer panels that tell them that consumers are looking for control and security in their lives. They have discovered new priorities and advantages from living simpler lives – Sorvillo called this “brightsiding.” As 72% of shoppers surveyed said they will continue using new shopping strategies when the economy improves, Kraft has gone about reconnecting with consumers and becoming a dependable, valuable source of help — providing recipes by e-mail, recipe widgets, and an iPhone assistant app that, having launched ten months ago, is in the top 50 iPhone apps.

Malcolm Gladwell, author of “The Tipping Point,” “Blink,” and his new book, “Outliers,” said that the recession offers us a chance to rethink assumptions and bad habits accumulated over many years. To him, successful people are aware of their limitations and work harder to overcome them. He noted that some things that we see as advantages, such as small school class sizes, are not necessarily so. For example, many Asian countries that have great educational systems have large class sizes. In essence, one of this theories is that making it too easy for people spoils them and actually inhibits success. In that light, he sees the current poor economy as perhaps providing a highway to creativity – nothing like a crisis to focus the mind.

Ken Romanzi discussed the revitalization of Ocean Spray, as over the past few years the company has jump started sales by educating consumers that their products taste good, and are good for them. Ocean Spray embarked on a heavy P.R. and marketing campaign to reintroduce the cranberry to U.S. consumers, showcasing their products’ heritage, and linking their products to various holidays and celebrations.

Nielsen’s Chairman and CEO, Dave Calhoun, said he has been amazed at the resilience of consumers, as their spending on food and fuel held up until the liquidity crunch of last September. He sees another 12 months’ or so of turmoil and said an important signal will be what consumers are going to do about saving, as so far most of the growth in savings has been involuntary, due to the reduced availability of credit.

All in all, it was an enlightening and entertaining morning – with every bad economic statistic seemingly offset by the notion that the current downturn was eventually going to go away, and until then we have an opportunity to rethink how and what we’re doing. It was also great to see many speakers at the conference using video and audio clips of consumers – giving us much more than just charts and statistics.

Many of the videos of the sessions at Consumer 360 are available on demand at Consumer360.com.

Listening And Social Networks

Jon Gibs, VP Media Analytics, will be facilitating a Listening Zone Learning Presentation focused on social networking, citing the importance of fostering a listening environment. The presentation will feature new data from Nielsen Online’s social networking study and demonstrate how brands are getting the most out of their listening programs. Gibs will also be giving a talk called: “Measuring Clutter: It Matters.” Read more about clutter here.

Additionally, David Wiesenfeld, VP Marketing Solutions, Nielsen Online and Kristin Bush – CMK Senior Manager, Digital Research, The Procter and Gamble Company will speak on “Listening vs. Asking: Contrasting Consumer-Generated Content and Surveys”

The Future Of Research And Consumer Trends

David Calhoun, Nielsen’s Chief Executive Office will participate in ”The Research Industry Vision,” a panel discussion of strategies to respond to research transformation over the next five years.

Paul Donato, Nielsen’s Chief Research Officer will present “The Media, The Consumer, The Economy,” which investigates how news reports about policy and the economy affect consumer confidence as well as how this information affects purchasing and entertainment decisions.

For a complete schedule of events and for streaming video of select events visit thearf.org.