MARKET EXPANSION PROJECT USING NIELSEN SPECTRA By: Jena Moore
1 CONTENTS 2
Marketing Objective: ........................................................................................................................................................................... 4
3
Current Consumer Base: ...................................................................................................................................................................... 4
4
3.1
Heavy consumers: ........................................................................................................................................................................ 4
3.2
High Volume Consumers: ............................................................................................................................................................ 6
3.3
Category Consumer VS Downy: .................................................................................................................................................. 8
3.4
Heavy Consumer: ......................................................................................................................................................................... 8
3.5
High Volume Consumer: ............................................................................................................................................................. 9
Competitor Consumer VS Downy:.................................................................................................................................................... 10 4.1
Purex: ......................................................................................................................................................................................... 10
4.2
Snuggle: ...................................................................................................................................................................................... 10
4.3
Gain: ........................................................................................................................................................................................... 10
5
Number One Competitor: .................................................................................................................................................................. 11
6
Demographic and Geography Criteria ............................................................................................................................................... 12 6.1
Three Criteria for Downy: .......................................................................................................................................................... 12
6.2
For Product Category: ................................................................................................................................................................ 12
6.3
Purex: ......................................................................................................................................................................................... 12
6.4
Snuggle: ...................................................................................................................................................................................... 12
6.5
Gain: ........................................................................................................................................................................................... 12
7
Market Share Opportunities: ............................................................................................................................................................. 13
8
Possible Cross Promotions: ............................................................................................................................................................... 13
9
Target Market Selection: ................................................................................................................................................................... 13 9.1
Target One: ................................................................................................................................................................................. 14
9.2
Target Two: ................................................................................................................................................................................ 15
9.3
Target Three: .............................................................................................................................................................................. 16
10
Marketing Implementation: ........................................................................................................................................................... 17
10.1
Cross Promotion Brand: ............................................................................................................................................................. 17
10.2
Where and Why:......................................................................................................................................................................... 18
10.3
Who and Why: ........................................................................................................................................................................... 19
10.4
How and Why: ........................................................................................................................................................................... 19
2 MARKETING OBJECTIVE: The objective of this research project is to identify and gain market share based on Nielsen Spectra data source. In addition, a cross promotion brand will be chosen in order to assist with expansion.
3 CURRENT CONSUMER BASE: 3.1 HEAVY CONSUMERS: There are several heavy consumers for Downy. Large families with children, couples with no children (35+) and large families are heavy consumers. Large families with children under 6 are likely to live in a simple town surrounded by farms, local diners, and family run businesses. Large families with children over 6 are likely to live in a wealthy suburb or a larger city area. Their town often has many parks, upscale restaurants and local fashion boutiques. Couples with no children (35-54) tend to live comfortably in a rural-like town or a wealthier suburban area. Couples with no children
(54+) are likely to be living in a suburban area. The type of suburb ranges from a wealthy community to a simple, family town.
The above chart further explains the heavy consumer base. The red and yellow index numbers represent where core consumers reside. Younger Bustling Families: Modest Working Towns (191) and Plain Rural Living (175) Older Bustling Families: Cosmopolitan Centers (179) and Affluent Suburban Spreads (161)
Established Couples 35-54: Comfortable Country (141) and Plain Rural Living (125) Empty Nest Couples 55-64: Affluent Suburban Spreads (134) and Modest Working Towns (138)
3.2 HIGH VOLUME CONSUMERS: Downy has similar consumers for high volume users. Couples over the age of 55 and large families with children over the age of 6 are high volume users. Older couples tend to either live in wealthier areas or plain rural areas. Their suburb could be surrounded by upscale malls, dining areas and entertainment spots or their quiet, tiny towns can feature local
restaurants in a comfortable, open area. Large families with children over the age of 6 are more apt to living in wealthy suburbs or safe towns with local establishments.
The above chart further explains the high volume consumer base. The blue areas show high areas in different life styles and behavior stages. Older Bustling Families Affluent Suburban Spread (4.3%); Comfortable Country (3%)
Empty Nest Couples Affluent Suburban Spread (3%); Comfortable Country (3%); Plain Rural Living (3.1%) Senior Couples Plain Rural Living (3.5%)
3.3 CATEGORY CONSUMER VS DOWNY: 3.4 HEAVY CONSUMER: The total product category has stronger consumer consumption than Downy in the Struggling Urban Core life style and Older Bustling Family behavior stage. In contrast, Downy has stronger consumer consumption with Empty Nest Couples. Generally speaking, Downy is stronger in wealthier areas, but weak in broadening the type of life style their product appeals to.
Category on Left; Downy on Right. Chart shows strong heavy consumer areas for each segment.
3.5 HIGH VOLUME CONSUMER: When compared to the category, Downy has less volume in Struggling Urban Cores and Plain Rural Living. The total category holds more in those segments. The category also has higher volume rates in Small Scale Families. Downy overtakes categories such as Cosmopolitan Centers and Comfortable Country. Downy also has a higher volume consumption for Empty Nest Couples.
Category on Left; Downy on Right. Chart compares strong high volume consumer areas for each segment. Based on the comparison of consumers, Downy has opportunity in several other behavior stages and life styles. Behavior Stage such as Small Scale Families would be an ideal consumer expansion. Life styles that could be beneficial for Downy are Urban Cores and Plain Rural Areas. These would be ideal for expansion because there is high consumer activity for the activity. Areas that aren’t worth expanding into are Young Transitionals and Independent Singles. Those areas are desolate in terms of heavy use and high volume use for consumers.
4 COMPETITOR CONSUMER VS DOWNY: The top three competitors for Downy include: Purex, Snuggle and Gain.
4.1 PUREX: Purex and Downy both have high consumption in Older Bustling Families. Purex falls to Downy’s Young Bustling Families living in Modest Working Towns and Plain Rural Living. Purex has higher consumption rates for Small Scale Families in general. Purex also has higher rates for consumers who live a Plain Rural Lifestyle. They have very heavy use in 7 out of 10 Behavior Stages.
4.2 SNUGGLE: Snuggle also holds a strong consumer base in Older Bustling Families. Snuggle also has higher consumption rates for Small Scale families in Modest Working Towns and Plain Rural Living. In general, they hold more types of consumers for Modest Working Towns and Plain Rural Living life styles. Downy overtakes Empty Nest Couples living in Comfortable Country and Struggling Urban Cores.
4.3 GAIN: Gain’s major cluster lies between Struggling Urban Cores, Modest Working Towns and Plain Rural living. Their have heavy use in households that have children. This highly concentrated area leads to many gaps with households that have no children. Downy holds higher rates against Gain in all Empty Nest couples.
5 NUMBER ONE COMPETITOR:
For this particular task, the number one competitor is Gain. Gain has the strongest hold in areas where Downy has lowest consumer consumption. Gain also has the largest market share out of all competitors for these areas. If Downy is successful in gaining territory from Gain, the company’s profits will rise and Gain’s will fall. Gain has the lowest market share in areas where Downy has stable customer usage. This could significantly hurt Gain if Downy succeeds in expanding their market share.
6 DEMOGRAPHIC AND GEOGRAPHY CRITERIA 6.1
THREE CRITERIA FOR DOWNY: Demographically, Downy depends on three factors: Household size, Household income and Race of Head of Household. The household size consuming the most Downy has more than 5 people (157). The Head of Household who is using Downy most is from the Hispanic (137) race. The highest consumption is coming from households that earn an average of $100-150,000 (141). Geographically, East North Central is the highest of all Census Divisions. The area includes: Wisconsin, Michigan, Illinois, Indiana and Ohio.
6.2
FOR PRODUCT CATEGORY: Demographically, the category depends on: Household size, Race of Head of Household and the Number of Vehicles in the Household. The average number of people in a household for the product category is more than 5 (163). The HOH using the product most is Hispanic (150). The amount of cars in a household is 3 or more. Geographically, Middle Atlantic is the highest of all Census Divisions. The area includes: Pennsylvania, Virginia, West Virginia, Maryland, Delaware and New Jersey.
6.3
PUREX: Demographically, Purex depends on: Age of HOH (45 to 54-135), Education of HOH (Not High School Graduate-196) and Race of HOH (Hispanic-137). Geographically, Middle Atlantic.
6.4
SNUGGLE: Demographically, Number of Persons (5 or more-169), Household Composition (Children 6 to 17 years old) and Number of Vehicles in Household (Three or more-139). Geographically, Middle Atlantic.
6.5
GAIN: Demographically, Number of Persons (5 or more-169), Race of HOH (Hispanic-155), and Age of HOH (35 to 44-151). Geographically, East South Central: Kentucky, Tennessee, Mississippi, Alabama.
Based on criteria for all competitors and category, Downy has opportunity in the East South Central census region and the Middle Atlantic census region. High demographic indicators are the Race of HOH and the Number of People in the household. All companies mainly sell their product through mass merchandising channel.
7 MARKET SHARE OPPORTUNITIES: Particular areas that provide possible market opportunities are consumers in Plain Rural Living areas and consumers in Struggling Urban Cores. All competitors and category are stronger than Downy in those life style categories. In addition, there could be opportunity in expanding into different life styles of Established Couples and strengthening Empty Next Couples consumption.
8 POSSIBLE CROSS PROMOTIONS: Categories that were compared to Downy for possible cross promotion were: detergent, air freshener, laundry accessories, room fresheners, stain removers and ironing supplies. Out of the categories, Air Fresheners, Spot and Stain Removers and Laundry Supplies were chosen. They had the highest index and volume of other categories. They also relate well the brand for different reasons. Air fresheners offer a fragrant tie-in, Spot and Stain Removers offer a clothing related aspect and Laundry Supplies offer an accessory component to the detergent.
9 TARGET MARKET SELECTION: Three different target clusters were run in order to determine the best market to expand into. The objective was to reach 40% of volume in 30% of households. In order to develop the most accurate projection, only one cluster was allowed per target.
9.1
TARGET ONE: The first cluster was created to determine which route is better for expanding market share: consumers in Plain Rural Living areas and Struggling Urban Cores or different life styles of Established Couples. After eliminating the larger cluster, the ratio was 17.3 volume to 13.1 of households with an index of 132. The end ratio was 41.5 volume to 34.5 of households with an index of 120. The cluster showed that it would not be a profitable move to expand into different life styles of Established Couples because the ratio did not equal the correct proportion.
9.2
TARGET TWO: The second cluster was created to determine the general direction for expansion. After eliminating outliers from life styles of Established Couples, the ratio started at 24.1 volume to 15.1 of households with an index of 159. When the cluster was aggregated, the ratio became 40.8 to 32.7 with an index of 125. The cluster showed that although this was on track to becoming a target to expand into, there should be a few more trials in order to make sure the best possible outcome is discovered.
9.3 TARGET THREE: The third cluster was created to finalize and narrow in on the best market expansion route. The beginning ratio was 24.1 volume to 15.1 households with an index of 159. After trial and error of different life styles and behavior stages, the final ratio became 40 to 31.6 with an index of 127. The total difference from Target Two is 1.1% less households, which is the closest cluster to reaching the target ratio 40:30.
Out of the targets described above, target three indicated the best expansion route. It produced the most volume in a smallest amount of households. This will create high penetration and high index because a smaller amount of households are using an above average amount of the product. This target also attacks the competitor, Gain. The expansion target will hopefully trickle into Gain’s consumers and decrease their market share.
10 MARKETING IMPLEMENTATION:
10.1 CROSS PROMOTION BRAND: Out of the three categories identified earlier, the brand that had the highest rates for the target market was Glade Expressions. Therefore, Downy will pair up with Glade Expressions for cross promotion. Glade Expressions has High Penetration and High Consumption for the target market. The brand also aligns with Downy because it is focused on offering a pleasant fragrant smell.
10.2 WHERE AND WHY: The below chart shows the top 25 stores of the target market. Target and Walmart are the most common stores for these consumers, followed by Meijer. In order to reach the greatest amount of people, a marketing plan would be implemented in areas such as Chicago and Ohio because those were the regions identified as having the heaviest consumers for the target market. The areas in the regions where most consumers reside are West Lawn (IL), Hamilton (OH), Hilliard (OH), Mason (OH) and Cicero (IL).The top three life styles include Cosmopolitan Centers, Modest Working Towns and Affluent Suburban Spreads. These would be main areas in which the campaign would take place.
10.3 WHO AND WHY: The desired target is a family person. They take vacations to Disney World, venture to the zoo on weekends, and plan amusement park days at Six Flags. They enjoy cheering on the local high school sports team on and staying informed on local issues. The target gathers their source of news from TV channels such as FOX and ABC. They also browse the internet to find news and often visit sites such as Bing or Chicago Tribune for sources. They occasionally listen to early morning radio stations such as WTMX and WBBM. For their children and personal pleasure, they enjoy watching ABC Family, Disney, HGTV, MTV, Nickelodeon, The Noggin, Food Network and VH1. The highest rated activity for this consumer is children’s TV shows. This shows that the target is likely to have children. In addition to TV, the target frequently listens to music on Pandora and stays connected on social media sites such as Facebook. In terms of spending, the typical target purchases over $200 of groceries per week. They splurge on fast food restaurants such as Dunkin Donuts, McDonalds and Taco Bell. Their clothing purchases tend to be made in the store and at Kohl’s, Old Navy, or Target. They are likely to spend the most money on children’s clothes or men’s clothes.
10.4 HOW AND WHY: In order to appeal to this consumer, the marketing campaign will focus on being kid-friendly and family oriented. Based on high activity and large consumption, the campaign will run primarily through TV and internet. There will also be outdoor advertising at places such as Six Flags, Disney World, Brookfield Zoo, etc. These types of media vehicles are most popular with the target market and the advertisements are likely to resonate with the consumer because they are in a family environment. There will be a strong tie to family integrated into all advertisements as well. This will allow the target to feel more aligned to the brand and help develop a personal connection to the brand. The campaign will also run in all Spanish on all media outlets. As identified earlier, the core HOH is Hispanic. Tailoring the campaign to that demographic will help saturate the market and appeal to a broader audience.