FDIN Packaging Conference

Creating Love at First Sight Pack OxyGen

Chris Sinclair, Managing Director

30th APRIL 2009

News www.fmcgenews.co.ukViews www.twitter.com/oxfordresearchWeb www.tora.co.ukPhone +44 (0) 1865 72 82 72

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The Oxford Research Agency

• 27 years in NPD Databases for concepts, packs, products and volumetrics

• Team of 50+ researchers Ex- Nestle, Kellogg, Boots, Reckitt Benckiser, Marks & Spencer,

Bases, Ipsos, Milllward Brown, AC Nielsen • Experience in every FMCG category• Research conducted In-home, in-hall, in-store, online,

worldwide• All logistics in-house

Distribution, de-branding & re-packing, etc Online, f2f, chilled, frozen, fresh, ambient

• All DP, Fieldwork and Online in-house

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Two Companies with One Shared Vision

Qual Quant

Deliver the best NPD possible for our clients

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ROI throughout NPD

Early Concept

Screening

Full Concept

Optimiser

Pack-NameOptimisation

Pack Optimisation

Price Optimisation

PromotionalOptimisation

ConceptProductTesting

SimulatedTest

Markets

RangeOptimiser

OxyGenVolumetric Engine

Most, if not all stages, feature packaging

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Packaging is the most under-rated part of the NPD process

• Significantly improving the appeal of your pack increases sales

The equivalent as spending £1.8m on ATL Advertising

• Pack change can seriously damage your brand - 80% change in sales recorded

• But positive effects can be seen Up to +50% increases seen when improving a poor design

Launching new packs with confidence needs excellent market research

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In the last 18 months, we have tested over £2bn worth of pack designs

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To Create Love at First Sight

• How research helps both pack designers and clients alike

• The Pack OxyGen approach and its development Learning from real case studies

• Identifying the impact on sales from changing a pack

• Our Top 10 Packaging Golden Rules

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The pack has many roles

Sales tool

Research should

measure this

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This is where the battle liesDecisions made here will make or break your product

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Pack Designers don’t need Research to tell them how to do their jobs !

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The audience for packaging research is many

• We spoke to Clients and Design Agencies

• Identified that Clients and Pack Designers have different needs from Packaging Research

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Different elements from the research needed for clients and pack designers

• Purchase intent Winning design

• Sales/ volume• Pack diagnostics• Brand Equity• Usability• Differentiation between

flavours• Shelf Standout• Potential improvement routes

• Changes in brand equity• Feedback on

Purchase intent Standout Flavour identification

• Generally do not want consumers/ respondents to tell them directly how to do their job !

Client Pack Designers

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Consumers are Consumers

They are excellent at telling us what they like and dislike

They know what they want to buy

They know when they see a great pack

Stimulus is needed

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Consumers are not pack designers

• They are not equipped with the tools, brand knowledge or the background to design the pack for you

• Research must reflect this and not ask consumers to be designers

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Research needed at different stages of pack development

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Pack OxyGen Approach

Pack OxyGen

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1. Learning from consumers, in-store

• In-store observation & filming

• Interviewing at fixture, post purchase

• Examining other categories for new packs, designs, etc

• All conducted on film, with designer and client in attendance if possible

In-storeUnderstandin

g

Outputs feed into Packaging Design Brief

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2. Pack Enhancement Focus Groups

• Development and screening of packs

• Used to enhance early designs Shelves to test different colours Packs with different communication Structural changes to test ease of use, for instance Move from Glass to Plastic to test Worth Different fonts, icons, etc Communication of flavour, freshness, variety, etc

• Attendance of all involved aids learning and development of final packs

Pack Enhancement Focus Groups

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3. Volumetric Pack Test

• Conducted either face to face or online

• 2 cells – Current and New, tested monadically• Volume output optional• Product placement when structure has changed

Volumetric Pack Test

Recruitment & QualificationShelf Standout

KPI’s

Pack Diagnostics

Fit with Brand/FoodProduct Communication

Pack Hot Spots

Brand EquityOptional Placement

Flavour identification

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Volumetric Pack Test

• Developed from our Volumetric Model Over 3,500 tests and 640+ Validations Every study includes packaging and the competitive set

• Identifies The overall sales impact of the pack change, in sales and units Standout in the competitive set Changes in Brand Equity Packaging Hot Spots

• Research provides the guidance needed for improving the pack design further

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Current

Volume Impact of PackGreen & Red significantly improve volumes over current

Brand Value

(million £)

Volume(millions of

units)

17.3m 16.8m 11.4m

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Green Red

(+51%) (+47%)(vsCurrent)

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Better Packaging Can Save You Money

• In research, pack performance = Good

• Launched with inferior pack, reducing volumes by 19%

• Investing £1.8m in advertising to get the same volume generated by a ‘Good’ pack

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Poor Good

£1.8m Ad spend

Pack Visibility

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Volumetric Pack TestMeasuring Standout

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Shelf Standout measured by stopwatch

A B C D

E F G H

I J K L

M N O P

Q R S T

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Stopwatches Measure Time, Not Sales !

• Current ‘found’ in 4.7 seconds

• New ‘found’ in 3.2 seconds

What does this tell us?

• Importantly, should we launch our design based on this information?

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Never use stopwatches in pack researchit will serious damage your sales

• No proven relationship between how fast you can find a product on-shelf and in-market volume

• “Packs with improved ‘speed to find’ in the majority of cases do not generate more volume. Our experience has shown that 1/3rd increase volume, 1/3rd stay the same, and 1/3rd lose volume” – Head of Research, FMCG Client

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Measuring Standout - Online

Which brands do you remember?

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44

12

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New

Competitor 2

Competitor 6

New Pack ShelfCurrent Pack Shelf

Spontaneous Shelf Standout

%

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18

50

Current

Competitor 2

Competitor 6

SPONTANEOUS RECALL FROM DISPLAY

%

Spontaneous Recall from Shelf linked to sales improvement

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Effect On Brand Equity

7351

616

658

2754

4221

1411

2752

Is healthyTastes delicious

Too sweetNot very special

Looks old fashionedMade from fresh ingredients

IndulgentIs natural

Mainly for adultsFor all the family

Mainly for womenMainly for men

Worth paying more forWholesome

New design brings more natural, fresh and wholesome attributes

7546

525

1274

3669

542527

1228

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Is healthyTastes delicious

Too sweetNot very special

Looks old fashionedMade from fresh ingredients

IndulgentIs natural

Mainly for adultsFor all the family

Mainly for womenMainly for men

Worth paying more forWholesome

BASE: (All respondents)

% %

New Design Old Design

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Examining Packs in Detail

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Hot Spots aids interpretation of the pack design

Likes

Dislikes

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3. Volumetric Pack Test

• Conducted either face to face or online

• 2 cells – Current and New, tested monadically• Volume output optional• Product placement when structure has changed

Volumetric Pack Test

Recruitment & QualificationShelf Standout

KPI’s

Pack Diagnostics

Fit with Brand/FoodProduct Communication

Pack Hot Spots

Brand EquityOptional Placement

Flavour identification

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Learning from the market

Case Studies

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Case Study: Macleans Toothpaste Relaunch 2004

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Macleans: Re-Launch Packs, 2004

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Macleans RelaunchSubstantial Change

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Macleans Launch: What Happened?

• Over 8 months a substantial fall in volumes Over 70%

Why? • The new pack lost its identify

Consumers unable to find it as Macleans ‘disappeared’ on the shelf

Brand Equity lost• Category signposts on the pack were removed

Toothpaste, cleanliness, etc• Pack became ‘Own Label’

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Cathedral City

• Volume declined through: Pack broke category sign posts - not seen in the real fixture Zip design made pack ‘Floppy’, hiding brand name

• The repair strategy Heavy sales promotion using Gondola ends and BOGOF

• Design has been a huge success, but costly in the initial launch phase

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Heinz Baked Beans

• Design changed to boost equity and standout under threat of Branston Beans

• Heinz website states that 10.5M labels printed each week (273M over 26 weeks)

• If the increased cost of label, for example, was 0.0002p, cost in 6 months of the design change is £54,600 in labels

Need to sell 120,000 extra tins of beans at 46p to pay for the change...

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The 10 Golden Rules for Packaging

from a research perspective

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10 Golden Rules for Pack Testing

1. When did you last change? 2. Consumers are not pack designers3. Evolution not revolution4. Kill the beauty parade5. Measure real standout & avoid stopwatches6. There is no pot of gold at the end of the rainbow7. Brand equity is king8. Your pack is your everyday sales tool9. Test structural changes in-home, in the hand10. Protect your brand and measure sales impact of the new

pack

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Remember - great design does not overcome bad products

FDIN Packaging Conference

Creating Love at First Sight Pack OxyGen

Chris Sinclair, Managing Director

30th APRIL 2009

News www.fmcgenews.co.ukViews www.twitter.com/oxfordresearchWeb www.tora.co.ukPhone +44 (0) 1865 72 82 72