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C H I C A G O • D E T R O I T • F R A N K F U R T • S H A N G H A I • B E I J I N G
The Martec Group Confidential
Capabilities Overview
Customer Intelligence Clinics
Product Intelligence Market Intelligence Customer IntelligenceCompetitor Intelligence
The Martec Group, Inc. Enabling Execution Through Insight
The Martec Group Confidential2
When your list of goals looks like a Post-It explosion…
Better marketing and sell-in materials
Support demand
creation at the retailers
Stronger price
positioning
Uncover unique
segmentation perspectives
Optimize product offerings,
placement, and merchandising
support
Provide information to retailers that they may not know about
their customers
Q1 Goals
The Martec Group Confidential3
…Martec has a unique “one-stop shop” solution to gather a range of B2B or B2C buyer/customer insights
Planned vs. Impulse
Purchases
Channel/Store
Selection & Loyalty
Product Attitudes,
Usage
Price Elasticity
Brand Preference, Imagery and
Loyalty
Market Basket
Purchase Occasion
New Product/Concept Testing
Customer Intelligence Clinic
Customer InsightsBuyer Insights
The Martec Group Confidential4
The core process involves multiple steps/methods of gathering information.
Prior to arrival, respondents complete a screening questionnaire
• Serves to recruit and pre-qualify each respondent in terms of demographics and attitudinal/background information
• Respondents can include end-users/customers, dealers, distributors, installers, contractors, etc.
A participant background worksheet is completed upon arrival to more fully understand shopping patterns/behavior
• Preferred channels/stores; frequency of shopping; market basket, etc.
Brand perceptions captured via PC-based exercise
Self-administered surveys are used in the product and simulation rooms
• Simulated aisles; new products; new packaging concepts; new formats; etc.
• Ethnographic• Merchandising and promotions testing
Respondents participate in a group discussion to fully explore attitudes/perceptions regarding the products/issues
PC-basedExercise
DiscussionGroups
Simulation Room
(simulated shopping)
SERVICEAREA
VIEWING14x17 - 6
VIEWING15x26LOUNGE
11x14
CLIENTOFFICE12x10 OFFICE
11x9
AV11x8 RECEPTION
24x18
ENTRY
COPYROOM16x14
CLT VIEWING24x12 - 6
PHONE
Product Room(hands-on product
testing)
ParticipantBackground
The Martec Group Confidential5
Case Study: Customer Intelligence Clinic
- “Product X” in the Automotive Retailer Channel -
The Martec Group Confidential6
Project Background
• Our client sells “Product X” into multiple segments, including manufacturing (food processing, oil/mining, and other areas of manufacturing) and vehicle service and repair, both DIY and DIFM (dealerships, repair shops, etc.).
• Our client was developing marketing and sell-in materials for leading automotive retailers and needed to better understand what was driving customers’ purchase decisions and usage (past, current, and future) of similar products.
• Client management used our information and analysis to more effectively address and impact the customer purchase decision (current and future), ultimately driving growth in this important channel.
• The Martec Group was commissioned to conduct proprietary market research to assist our client with the required customer insights.
The Martec Group Confidential7
Research involved 200 customers of similar products, covering a variety of demographic and behavioral segments.
Conducted in multiple locations.• Selected due to representative mix of demographics along with coverage of key retailers
(Advance, Auto Zone, O’Reilly’s, etc.)
Target audience: Customers who utilize “Product X” and similar products and purchase via “retail” stores
• Auto retailers – Advance Auto, Auto Zone, O’Reilly’s, CARQUEST, NAPA• Mass merchandisers – Wal-Mart, Sam’s Club, Sears, Dollar Stores • Home center/hardware stores – Ace, True Value, Tractor Supply, Home Depot, Lowes• Currently purchasing or recent purchasers of these types of products
Demographics • 75% male/25% female• Variety of occupations (targeted ~25% professional trades/mechanics)
Shopping behavior• 55% of respondents “preferred” retailer = automotive retailer (remainder split between
mass merchandisers and home center/hardware)• Mix of buyers – for work, for home, purchasing for family/business, etc.
The Martec Group Confidential8
Specific insights gathered…
Understand typical usage and purchase patterns for these products, brand(s) purchased• Preferred retailers and brands – with reasons (why do you shop at _____?)• Purchase frequency and occasion• Intended place of use and frequency
Understand the customer Decision Tree• Key purchase criteria and importance (brand, make-up/format, container size, price, etc.) • What does the end customer know about the product, how do they get their information?
Measure brand perceptions and performance• What are the drivers or triggers that cause a Customer to consider and purchase specific
brands?
Evaluate new products/concepts• Current competitive set of products on hand for evaluation by respondents• Included product trial and fragrance testing
Measure price elasticity for current competitive set as well as product concepts
The Martec Group Confidential10
There is significant cross-over between product usage at home and at work, particularly among men (~48%).
Predominantly an “individual” purchase – not a significant share for “family use” or “employee use”.
• Also evident in attitudinal responses – don’t see much reliance on “others” for advice, etc.
Overall Male Female0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
49% 45%59%
5%5%
4%
40% 48% 18%
5% 2%
15%
0.01 0.04
Use at Home Use at work Use at home & workFamily Use Employee Use
Perc
ent o
f Res
pond
ents
Which of the following best describes your purchases of these types of products within the past 12 months?
The Martec Group Confidential11
Purchase Occasion Insights
Weekly Monthly Every 2-3 months 2-3 times per year
About once per year
Less than once per year
0%
5%
10%
15%
20%
25%
30%
35%
40%
19%
36%
21%
16%
7%
1%
Perc
ent o
f Res
pond
ents
How often do you purchase for home/work?
The more frequent buyers (weekly/monthly) are less prices sensitive, more brand loyal and prefer to shop at auto retailers.
The Martec Group Confidential12
Shopping Behavior Insights
I find these products are the same so it makes sense to buy the cheapest
There is a large difference among brands
I want to be able to try samples before buying a new brand or type
Once I find a product or brand I like, I stick with it
I am familiar with several different brands
I check the prices on what I purchase
I often take samples of these types of products, when they are available
I buy from more than one store
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Top 2 Box (6 or 7) Bottom 2 Box (1 or 2)
Percent of Respondents
Please rate your level of agreement with each of the following statements regarding your purchase, and usage, of the product. One to seven scale – where one indicates completely disagree and seven indicates completely agree.
Although familiar with many brands, they seem to be fairly brand loyal.
Customers are purchasing from multiple stores.
The Martec Group Confidential13
Purchase Insights(e.g. “Impulse” and “Planned”)
I decided to purchase this product when I saw it on the shelf
I decided to purchase this product while I was shopping, but before I reached the aisle/display
I decided/planned this purchase at home or before I entered the store
0% 20% 40% 60% 80%
Which of the following best describes your purchase?
Percent of Respondents
Planned buyers tend to buy less frequently; tend to shop more often at auto retailers; buy larger sizes; are more loyal to a “store” and brand
Impulse buyers tend to buy more frequently; shop more often at mass merchandisers; buy smaller sizes; are not as loyal to a “store” or brand
The Martec Group Confidential14
Store/Brand Selection and Loyalty Insights
CARQUEST
Ace Hardware
Tractor Supply
Other
Sam's Club
Home Depot
O'Reilly's
Dollar Stores
NAPA
Lowes
Advance Auto
Wal-Mart
AutoZone
0% 10% 20% 30% 40% 50% 60% 70%
Purchased past 12 months Preferred
Percent of Respondents
From which of the following places have you purchased within the past 12 months?Which is your preferred source?
Approximately 55 percent of the participants “preferred” purchasing at auto retailers (AutoZone, Advance, O’Reilly’s, NAPA and CARQUEST).
Many retailers widely shopped, but a couple of clear favorites.
Client didn’t realize non-auto (i.e. Wal-Mart) was so prominent.
The Martec Group Confidential15
Market Basket Insights
Brake parts
Fluids
Oil change products
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Rarely/Never Sometimes Often/Regularly
Percent of Respondents
@ Auto Parts Retailers
When you are purchasing, how frequently do you purchase the product categories below at the same time as the product in question?
Kitchen/bathroom repair products
Landscaping/gardening materials
Paint supplies
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
@ Home Centers/Hardware Stores
@ Mass Merchandisers
Paint & paint supplies
Automotive repair products
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Customers often bundled the subject product with other products.
The Martec Group Confidential16
Quantitative Usage Insights
Predominantly an “individual” purchase – not a significant share for “family use” or “employee use”.
Overall Male Female0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Use at Home Use at work Use at home & workFamily Use Employee Use
Perc
ent o
f Res
pond
ents
Which of the following best describes your purchases within the past 12 months?
The Martec Group Confidential17
0% 50% 100%0%
50%
100%
Quantitative Usage Insights
Leading activities where the product is used…
Restore classic cars
Auto repair
Furniturerefinish Plumbing
Painting
Home repair
Snowmobiling
Hunting
Ceramics/pottery
4x4off road
Motorcycles/dirt bikes
Boating/Jet ski
Hiking
Arts &crafts
Camping
Biking
Appliancerepair
Fishing
Gardening
Landscaping
Percent of respondents that “sometimes” or “often/regularly” participate in…
Per
cent
of r
espo
nden
ts th
at “
regu
larly
” us
e af
ter
this
act
ivity
Frequency of Activity
Usa
ge
Automotive
Home Improvement
Initial focus was on Automotive Retailers only…research highlighted need for a dual channel strategy
The Martec Group Confidential18
Key Purchase Criteria Insights
Stat
ed Im
port
ance
– T
op 2
-Box
Rati
ngs
Derived Importance (based on overall satisfaction)
Entry Tickets Critically Important
Undeveloped Intrinsically Important
16
15
2
14
3
22
1718
25
4
8
11
24
1321
5
1
26
20
23
67
19
12
910
Stated vs. Derived Importance Quadrant Analysis
Several purchase criteria were classified as “critically important” that were previously thought to be “entry tickets”
The Martec Group Confidential19
Price Elasticity Insights
$0.50$1.00
$1.50$2.00
$2.50$3.00
$3.50$4.00
$4.50$5.00
$5.50$6.00
$6.50$7.00
$7.50$8.00
$8.50$9.00
$9.50
$10.00
$10.50
$11.00
$11.50
$12.00
$12.50
$13.00
$13.50
$14.00
$14.50
$15.00 0
10
20
30
40
50
60
70
80
90
100
Inexpensive Expensive Too expensive Too inexpensive
Optimal Price
~$5.75
PME
PMC
Acceptable Price Range~$4.25 to $6.50
Analysis of multiple brands
Customers consistently had higher acceptable price ranges for client brand vs. competition
The Martec Group Confidential20
Additional merchandising and improved packaging for the offering are needed.
Merchandising is required to take advantage of the high percentage of impulse purchases.• Merchandising issues seem to focus less on deals (coupons, sales, etc.) and more on
samples ("get them to try it")
• Bundling with other products could improve top-of-mind awareness in general and specifically for our client
Multiple “baskets” are possible – automotive (cleaning, oil change, etc.); indoor home; outdoor home
“I would consider purchasing a package with oil, an oil filter and a small bottle of heavy-duty hand cleaner.”
• Samples are essential – meet customers at the door of the retailer with opportunities to try product
Most arrive in need of your product
The Martec Group Confidential21
Purchase Intention Insights
1 - Not at all likely
2 3 4 5 6 7- Extremely likely
11%
5%
9%
15%
24%24%
12%
36%16%
Bottom 2 - Box Top 2 - Box
Percent of Respondents
How likely would you be to purchase the brand/product at the price you identified as “expensive, but still a possible purchase”?
Confirmed that there was purchase activity at the high end
The Martec Group Confidential22
Contacts
Thank you for this opportunity.
martecgroup.com
Chicago105 West Adams StreetSuite 2125Chicago, Illinois 60603(312) 606-9690
Detroit27777 Franklin RoadSuite 1600Southfield, Michigan 48034(248) 327-8000
EuropeBerliner Strasse 21963067Offenbach/MainGermany+ 49 69 80903 60
China 121 Yanping RoadSanhe Plaza 10BShanghai 200042 China +86 (21) 6246-2121