1. Marketing Case Study

2. Despatches Key sources: Own despatches, BCCCA, MANX, Financials System: SAP/BW, Merlin (tbc) Key Measures: Volume, NPS (despatches only), Value, Share (MANX/BCCCA), Margin/EBITA etc (Financials) Key Splits: By channel, customer & category splits (limited on BCCCA/MANX) Time Periods: Weekly (despatches), 4 weekly (MANX/BCCCA) Retail Market Measurement Key sources: Nielsen 1 weekly TNS Brand Equity (Brand Image, Consideration, claimed usage), Purchasing Panel Key sources: Nielsen Homescan (households/Eat Later/Gifting), TNS Impulse (individuals/Eat Now) System: Nitro (Homescan), Excel (Impulse) Key Measures: Penetration, FOP, WOP, Purchaser demographics, Heavy/Medium/ Light buyers, % on promotion (Homescan) Key splits: By channel/account (Homescan) and by category/sub-category Time Periods: 4 weekly (Homescan), Yearly purchase (TNS Impulse) Points to note: Nielsen launching an Impulse Panel – may include other snack categories. Sample sizes means can’t look at some SKUs. Pick up rate = 50-70% Special Analysis: Switching, depth of trial Consumption Panel Key sources: TNS Family Food Panel System: Powerviewer Key Measures: Individual meal occasions/servings (not expenditure), consumption profiles, day of week, time of day, occasions, where consumed (OOH), complementary analysis Key splits: OOH, In home, Lunchbox, Vended Time Periods: Yearly purchase (TNS Impulse) Points to note: Can only look at total brand and some may be too small. Many other categories/sub categories including drinks Other market data: Market reports. IGD, Consumer Services, Ad hoc. Stats System: Merlin Key Measures: Consumer Volume, Value, Distribution, WROS, Price, % on promotion, facings (quarterly) Key splits: By channel and by category, SKU level, customer level data for some accounts Time Periods: Weekly & 4 weekly Points to note: Pick up rate = 65-90%, IRI are Nielsen competitors Other data sources: TGI data (claimed penetration, H/M/L buyers, media usage) Gifttrack (claimed gifting levels, profile of givers, brand detail (from Apr 05) Dunhumby – Tesco Clubcard (similar to Homescan) Media expenditure (monthly by brand)

3. We use a lot of ad hoc research to answer specific questions Quantitative provides the bones and qualitative the flesh

4. Qualitative & Quantitative surveys are different... Development of NPD Understanding the brand & where it can go Developing advertising Evaluating communication on air Sizing NPD

5. Key steps taken to understand the reasons for sales decline, all firmly rooted with consumers Focus groups In-depth interviews Analysing calls into Consumer Services Brand sales data Analysing & interpreting major socio-economic trends Competitor performance Analysis of confectionery market Brand Image Data

6. Socio-Economic trends: 3 Main Macro Trends Impacting on Snacks & Confectionery Indulgence & Connoisseurship Raising the Pleasure Bar Busy Lives Making confectionery more convenient to shop & consume Nutrition, Health & Wellness Making Confectionery more permissible/ healthier snacks Source: Nestle trends 2005, Leatherhead Food international 2004

7. Result = negative impact on core business, and its profitability Market analysis: commoditisation makes it harder to grow share profitably Fierce competition Commoditisation Availability/ Visibility declining Higher % on Promotion Majority of innovation is variation Low inflation environment Diminishing salience of category Fragmentation of Demand Brand Equity diminishing

8. In confectionery, big blocks and big bags are the two areas in strong growth Source: Nielsen (2004/2001) -0.4% +/-% -10% -2% +29% +39% +8% +5%

9. Investigation starts close to home with historical brand performance data Value, volume, unit sales over time Market share evolution Performance by pack format Performance by flavour Rate Of Sale of each product Distribution of each product Can be measured at “total market” level, by sales channel and sometimes even by customer

10. Key competitors: which other brands are Aero consumers buying and why? Understanding: Brand size (value, volume, units, market share) Consumers (who are they? Age, lifestage, lifestyle?) Need-state & consumption occasion (when, why?) Benefit and brand positioning

11. Brand Equity/Image: What do consumers think about the brand? What would we like them to think? Monthly surveys completed by several hundred people, administered by an external agency: TNS Measuring: Brand awareness Purchase & Consumption Behaviour Disposition towards the brand Brand Image Brand Personality

12. Consumer Services plays an important role of keeping us in touch with consumers on a daily basis Nestlé Careline is used to: Take direct feedback from consumers: Product congratulations Product disappointments Opinions on advertising Gain quantitative feedback through telephone surveys: New product ideas New packaging ideas Current perceptions of a brand

13. Focus groups enable us to explore target consumers’ feelings towards the brand in more depth Regular focus groups enable us to stay in touch with what consumers are thinking: We speak to ‘loyal’ and ‘lapsed’ users We receive feedback on current perceptions of the brand and how this may have changed over time Consumers evaluate new product and packaging ideas and provide feedback on how they could be improved

14. Outputs & learnings led to brand repositioning in 2005

15. Full renovation & innovation plan in 2005 Brand redesign Improved recipe New indulgent products Entry into growing bitesize market

16. Aero was the fastest-growing top 20 confectionery brand in 2005: Sales up 33% versus 2004 Aero was the fastest-growing top 100 Grocery brand Aero’s growth added more money to the confectionery market than any other brand in 2005 (an extra £19m) Brand equity scores (consumer perception of the brand) improving Increased trust & credibility with customers Outstanding success in 2005