Case 2 fmcg p17 nl cover

Introduction

• This document presents the results and conclusions of the market research organized by a company specialized in Beauty products and The Post in order to compare the impact of two different media mixes on awareness, perception and sales activation:

• Media mix n°1 = traditional media mix: TV + Press + POS

• Media mix n°2 = traditional media mix + Direct Mail

• This marketing campaign was based on a new product, targeted to women > 55 years.

• Market research has been conducted via phone interviews in September 2006 among 1000 women (500 x 2 groups)

Product

Campaign

goal

Target customersMedia mix

Timing

New productNew product

Try the product and buy it

Try the product and buy it

Women > 55 yearsWomen > 55 years

Septembre 2006Septembre 2006

Pilot set-up

TV, Press, POS, DM

TV, Press, POS, DM

Source: Team analysis

Agenda

• Impact of Direct Mail on Awareness

• Impact on sales activation

• The most powerful elements of a Direct Mail: Sample and Coupon

• Impact on R.O.I.

55

33

24

18

16

10

13

10

11

10

6

2

32

14

7

6

5

1

3

2

3

4

1

32

18

57

31

26

22

18

13

17

12

10

12

7

1

26

8

8

6

8

3

5

3

3

2

1

35

14

Competitor 1

BRAND X

Competitor 2

Competitor 3

Competitor 4

Competitor 5

Competitor 6

Competitor 7

Competitor 8

Competitor 9

Competitor 10

Competitor 11

Competitor 12

Direct Mail significantly improves the top of mind awareness: from 8% to 14%

Percentage of respondents

Source: Market research on 1000 customers, September 2006

Top of Mind

Spontaneous

‘Which brands of Beauty products do you know?’

Traditional Media mix

n = 500

Media mix + DM

n = 500

+ 76%

One single Direct Mail has no particular impact on general criteria for th brand perception

‘To which extent do you agree with the following statements concerning Brand X?’

Rating on a scale 1 to 10*; % agree (% of 8, 9 or 10)


* 1: I completely disagree; 10: I completely agree


0

20

40

60

80

100

Media mix only

Media mix + DMEffective products

Trust

Value for money

Not too expensive

Products I need

A brand that offers …

Close to me

Clear advertising

Realistic advertising

Brand I would recommend

Innovative products

• n = 244

• n = 233

Agenda





100 69 4869 70

The media mix is more efficient with Direct Mail at every step of the sales process

Media received Media recall

Media funnel

“Do you remember seeing and ad/ receiving a mailing for a Beauty product of Brand X recently?”

Media mix

Media received

* Recall of TV, Press, POS OR DM amongst Media mix + DM group (n=500)

** Recall of TV, Press OR POS amongst Media mix only group (n=500)


Media mix + DM

100 54 3554 65


“Can you describe the ad/mailing commercial for Beauty product of Brand X ?”

*

**

“Have you already purchased the new product? / Do you intend to buy the new product ?”

Purchase intentionRecall content

2959

1851

+ 61% of purchase intention for the media mix with DM

"Do you remember seeing an ad /receiving a mailing for a Beauty product of

Brand X recently?"


39

36

31

11

TV

DM

Press

POS

**

**

**

*

* Recall of DM amongst Media mix + DM group (n=500)

** Recall of ad amongst Media mix only group and Media mix + DM group (n=1000)


Direct Mail and TV have the same recall rate, higher than Press and POS

Statistically equivalent

+16%

+240%

Direct Mail boosts intention to buy: +61%

‘Have you already purchased the new product?’ / ‘Do you intend to buy the new product ?’


58

9

15

35

32

15

15

2320

9 5

53

Has already bought the product

Will certainly buy the product

Will probably buy the product

Might buy the product

Will probably not buy the product

Will certainly not buy the product

DNK

18%29%

Media Mix Media Mix + DMn = 500 n = 500

+ 61%

50% of interviewees having bought the product for the first time have the intention to re-buy

‘Have you already purchased the new product?’ /

‘Do you intend to buy the new product ?’

7

5

5

12

34

15

22

Have purchased the product

Will certainly buy the product

Will probably buy the product

Might buy the product

Will probably not buy theproduct

Will certainly not buy theproduct

DNK

‘Will you buy the product again?’

Have already purchased the product (n = 54)


50

33

7

6

4

Certainly

Probably

Maybe

Certainly not

DNK

83%

Agenda





1

60

11

5

11

3

9

Always

Very often / usually

Often

Sometimes

Seldom

Never

DNK

The sample is extremely appreciated

‘If you receive a sample for a Beauty product, what do you do with it?’

I use it ...



76

n = 1000

2

27

11

14

23

10

14

Always

Very often / usually

Often

Sometimes

Seldom

Never

DNK

Since the price is an important decision criteia, coupons are also appreciated

‘If you receive a coupon for a Beauty product, what do you do with it?’

I use it ...n = 1000


52


Personalised mail is the most prefered medium to communicate information about beauty productsPercentage of respondents + have answered

* 1: I do not prefer this at all; 10: this is the best solution


‘How do you prefer to receive information about Beauty products?’

Rating on a scale 1 to 10*; % prefer this option (% of 8, 9 or 10)

52

37

28

21

18

17

7

6

Personalised letter

POS promotion

Free door-to-door mail

Ad in newspaper/magazine

TV advertising

Press articles

Telephone

E-mail

n = 990

Therefore, its perception in this pilot is better than the perception of other media

‘To which extent do you agree with the following statements concerning the Brand X campaign?’

Rating on a scale 1 to 10*; % agree (% of 8, 9 or 10)

Percentage of respondents recalling the ad

* 1: I completely disagree; 10: I completely agree


0

20

40

60

80

DM

TV ad

Press

You like the ad

The ad is interesting

The ad appealed to you

The ad improved your perception of Brand X

The ad taught you something new about these products

The ad incites you to buy the new product

The ad incites you to go and discover the face care

product range of Brand X

n = 140

n = 370

n = 292

** Media mix + DM group

*** Media mix only group and Media mix + DM group

**

***

***

Direct Mail is read by 79% of receivers recalling DM, and sample has th biggest impact


16

37

27

7

9

2

2

1

Read carefully

Read

Skimmed through

Threw away without opening

Put aside without opening

Gave to someone else

Other

DNK

‘What did you do with the letter of Brand X?’

n = 180

Percentage of respondents recalling the DM(Media mix + DM group only)

79%

82

63

42

27

26

1

3

A sample

A coupon

A letter

A folder

A contest

Other

DNK

‘Can you tell me what was in the envelop?’

n = 143

Among all elements of the Direct Mail, the sample has the best recall rate

‘Do you remember a sample / coupon / invitation for a contest in the letter of Brand X?’

63

26

20

3882

10

Spontaneous Recall

Total Recall

Sample Coupon Contest

Aided Recall

Percentage of respondents having read the DM

(Media mix + DM group only) (n = 143)

92

83

64

A spectacular 64% “already used” score for the sample, only 5 days after reception

13 10

56

11

64

27

Yes, have already used it

Sample Coupon Contest

Yes, later

‘Do you think you will use the sample / coupon / take part in contest ?’

Percentage of respondents that remember the sample / coupon / contest

n = 132 n = 119 n = 91

Agenda





Introduction to ROI calculation

• The Return On Investment calculation aims at comparing the effectiveness of two different media mixes in terms of financial impact, with the following formula:

(Additional margin generated by the campaign – global costs of campaign) / global costs of campaign

• In this pilot, the conditions were particularly challenging:• TV costs extremely low, due to the target (women>55 years)

and the absence of creation costs (already done and paid by International department)

• DM costs extremely high due to a particularly qualitative and attractive mailing

• In these challenging conditions, ROI of the media mix including DM is significantly higher..

ROI of the media mix including DM is significantly higher, in spite of low ATL costs and high DM costs

Sources: Market Research on 1000 customers - Sept 2006 / Nielsen figures from Brand X / Team analysis

Media costs (K€)

Total campaign return

(K€)

ROI

Traditional Media Mix, North only

-2%

Media Mix with DM, North only

Incremental margin and cost

incremental margin

(K€)

Coupon redemption

Cost (K€)

Cam

paig

n c

ost

ESTIMATES

11%

98

100

-2

0

114

100

11

3

Decreasing DM costs would further improve the ROI of this global media mix

Sources: Market Research on 1000 customers - Sept 2006 / Nielsen figures from Brand X / Team analysis

Media costs (K€)

Total campaign return

(K€)

ROI

Traditional Media Mix,

North only

-2%

Media Mix with DM less expensive

North only

Incremental margin and cost

incremental margin

(K€)

Coupon redemption

Cost (K€)

Cam

paig

n c

ost

ESTIMATES

38%

98

100

-2

0

142

100

38

4

Conclusions

• This pilot demonstrates that Direct Mail, added to the traditional Media Mix of Brand X, increases sales activation by 61%. This media is also the most appreciated to receive information on Beauty products.

• Besides, DM seems to be a good way to distribute samples in an efficient way, since 91% of women recalling the sample have already used it (64%) or intend to use it later (27%)

• The coupon is also a key incentive to buy a new product for the first time, and a good way to convert trials (via sample) into purchases (with coupon) in a very short period of time, with a minimum waste

Documents

Case 2 fmcg p17 nl cover