Marketing with the advantage of consumer or household panels

Walking into any of the new hypermarkets, the consumer is now spoilt for choice whether it comes to buying soaps or soups. While it is healthy for the consumer to have such a wide variety of choice, it is also essential for the marketer to have a clear idea of how this variety impacts consumer behaviour. Is the consumer buying more as a result? Is she/he coming back to the same brand? Or for that matter the same store?

In other words, as a result of this explosion, marketers now face more of a challenge understanding the composition of the market and the underlying dynamics within.

There are 2 sources for such understanding. Retail Audits, for estimating total market volumes - are more brands increasing overall purchase volumes - and Consumer Panels for assessing the composition of the volume - are these volumes likely to stay? For example, between last year and now, your brand share has moved from 5 % to 7%. Reason to be happy? well, maybe, but reason to be ecstatic only if you also know that this 2% growth has not impacted negatively on the proportion of Loyalists in your brand's franchise.

This is where a Consumer Panel comes in. Consumer Panels provide insights which go well beyond measuring brand shares - most importantly they also track the quality of a brand's franchise.

Consumer Panels also help the marketer understand TRENDS in category and brand movements - and changes in brand health due to the impact of changes in marketing inputs, such as price, positioning, promotions, media spend and packaging e.g. how many consumers were buying the brand before a promotion and did they buy it after the promotion ended? what has been the increase in brand volume due to the promotion? has that come from the same set of consumers buying more or has it brought in new consumers?

All extremely important pointers to measuring the effectiveness of a current promotion and therefore deciding which promotions to run in the future.

Consumer Panels are also very often used as a FUTURE PLANNING TOOL. They can be used to identify changes in consumption habits. Is the buying cycle of a brand changing? Are consumers buying more or less per occasion?

For example, in the Soft Drinks category, where the consumers' awareness of health is growing, there is a changing consumption habit towards natural drinks from carbonates. Another example is the change in consumption habits across many fmcg categories during Ramadan. While there is an increase in the number of brands in the consumer's basket, the level of purchase per occasion also shows a dramatic increase.

Consumer Panels can also be used to very effectively track the success or otherwise of a new brand launch. The success of any new launch is very closely correlated to 2 key factors: trial i.e. how many consumers pick up and try the brand; and repeat purchase i.e. how many of these trialists come back and buy the brand the second time. Both measures are captured in a Consumer Panel since it consists of a static sample of respondents who represent the market overall, and report back their daily purchases on a continuous basis e.g. so out of 100 households, 20 picked up my new brand in month 1, and 12 out of these 20 went back and bought it in month 2. Using benchmarks or norms for markets and categories, we can then assess whether 20 and 12 are good numbers.

If we know that in month 2, over and above the 12 who repurchased the new brand, we attracted a further 10 buyers who are buying for the first time, we can get a fix on the overall trial rate that the new brand is generating. And of course we will also know from the Panel the profile of people who are buying the brand and the other brands that constitute their portfolios - important advantages when it comes to targeting the communications budget behind the launch.

And advantages from Panels are not just consumer driven - what about retail or trade ?

With the growing upper trade in the Gulf as the big hypermarket chains expand their presence, distribution is assuming even more importance. Some of these big players in the market may not open their doors to Retail Audit activity. Yet marketers need to know info on availability and effectiveness of these key outlets? What is the mix between these outlets? How is it being built over time? Consumer Panels give the marketer the ability to evaluate the contribution from each of these outlets and take important strategic and tactical decisions in trade negotiations. This takes us into the very topical subject of Category Management - a subject that is attracting much attention in the West currently.

More of that in another issue.