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It is important
for clients to track performance of their product variants
in a particular category and be able to gauge the impact of
introducing a new variant to that category. Firstly, to understand
the performance of the total category and individual variants,
and secondly, to assess the impact of the new variant on the
rest of the category.
CASE
STUDY
Analysis was recently conducted for a client using ACNielsen's
Modelling & Analytical tool, ACNielsen | Explorer, to
examine performance of their existing five variants within
a particular category, plus a recently established sixth variant,
in order to make a decision on which one should be dropped.
The client felt that all six could not be supported.
The client’s
share benefited from having all six variants present. A 16.5
percent share of the category was recorded when the full range
was available for consumers, as opposed to 11.1 percent when
only five variants of the range were available.
The stores where all six were present accounted for 80 percent
of the client’s total sales in this category, with a
further 10 percent coming from the stores with five variants.
Focusing on the
stores where all six variants were available to the consumer,
because those were the most important, it was found that variants
A, F and B were the best performing in terms of sales share.
Variant F was the newly launched product, which had been supported
strongly through the launch period. In the latest reading
it had achieved a 3.2 percent sales share in those stores
and was ranked second within the client’s range.
The question was – had variant F’s arrival, and
impressive performance, impacted on the rest of the client’s
range?
Isolating the stores
handling the new variant F in the latest period (November),
and then re-processing that group of stores for the previous
five months, allowed us to plot more closely any interactions
at the time of the launch.
We found that none of the five established variants were affected
by the launch. In fact, the client’s sales share grew
more than 3 points to 16.5 percent during the September to
November period.
Between October and November the client’s
share grew by 2.9 points and appeared to impact a number of
the key competitors.
At this point in time the new variant F had achieved a weighted
distribution of 60 percent (ie it was present in stores representing
60 percent of the category’s total sales). All of the
client’s more established variants had a distribution
of more than 90 percent, indicating that F had considerably
higher potential.
In this case study, the recommendation would be to maintain
all six variants as each have a significant share. The new
launch had not cannibalised and had been incremental to the
client’s business. It would have been a costly mistake
to have dropped one of the variants.
Another recommendation would be to target those stores currently
handling the five established variants and push the new variant
in alongside. Potentially the client’s share of total
market will increase to 16.5 percent, which should more than
offset the costs of expanding the new variant’s distribution
level and listing fees.
It was further recommended to repeat this study for the next
three months to continue tracking progress. There were two
reasons for this : (1) ensure that the new variant continued
to perform in a favourable way, and (2) quantify the subsequent
actions taken by the client to expand distribution.
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