FUTURE OPPORTUNITIES FOR CRYSTAL PRODUCTS IN THE US MARKET & HOW TO REACH THE NEW CRYSTAL CONSUMER

CURRENT STATE OF CRYSTAL PRODUCT INDUSTRY IN US MARKET

Fragmented marketplace with shrinking traditional target markets and emerging, harder to target niche segments

Dramatic rise in product marketing companies competing in the US marketplace with a wide array of products

Casual living has become ingrained in the US culture. However, formal dining for special occasions is regaining some popularity

Increased Competition

The US marketplace is flooded with crystal goods that span the spectrum in price point, quality and

brand cachet.

2001 2002 2003 2004 2005 1,859,440 1,975,558 2,063,277 2,236,746 2,341,454

Data Provided by COMTRADE database of the United Nations Statistics Division

US MARKETPLACEINCREASINGLY COMPETITIVE MARKETPLACE

Economic and social factors Exchange Rate of the USD versus the Euro General Economic Condition in US US Consumers’ seemingly insatiable demand for

Consumer Goods Growth of Distribution Channels Growth in Product Marketers Emergence of Identifiable Social Sub-Groups

USD Exchange Rate to Euro

Market Attractiveness

The US is an attractive marketplace for crystal products due to the large, diverse and relatively wealthy target segments that exist

Many companies are competing for sales with a wide range of products through many different types of retail channels

US Demographics

Population Growth New Demographic sub-

segments Disposable Income Marriage Later in Life Higher Divorce Rate

Appreciation in Real Estate Values

Low Interest Rates Rise in Single

Households

US Population Figures Segmented by Race

Projected Population Change by Race

1990, 2000, 2025 and 2050

Demographic Changes

General broad demographic information becoming less relevant

Emergence of powerful sub-groups Targeting “MicroTrends”

Requires detailed demographic information Requires tighter marketing campaigns

Changing Family Structures in the US

Changing Nature of US Households

Disruptive Demographics

Nature of utilizing demographic characteristics to better understand target consumer

segments is changing

Layering of different styles of demographic information to uncover sub-segments

New Demographic Information Psychographic

Attributes relating to personality, values, attitudes, interests, or lifestyles

Behavioral

Variables such as usage rate or brand loyalty

Important Demographic Target Segments in the US

BABY BOOMER SEGMENT BOOMER ELITES GENERATION Y GENERATION X BRIDAL SEGMENT WOMEN SEGMENT WINE CONSUMER SEGMENT GROWTH LUXURY GOOD CONSUMER SEGMENT

Baby Boomer SegmentBORN BETWEEN 1946 - 1964

80 Million US Consumers Youthful but not young Health, Fitness, Lifestyle + Simplicity Products – easy to use, convenient

Targeting Baby Boomers

Traditional media patterns of TV, Radio + Print

Willingness to embrace new forms of media

Boomer Elites

Pre-tax income of 150,000 USD One in Ten Baby Boomers Married (92%), College Educated (92%) and live in

homes valued at nearly twice the value of the average Baby Boomer

Importance

This group spends the most on household goods and services, most likely to own a second home

GENERATION XBORN BETWEEN 1965 - 1975

44 Million US Consumers Entering peak earning years Getting married, raising families, tech savvy Independent, distrusts hype and should be

targeted with clear marketing messages Diverse segment

“Identifying what Generation X wants can be difficult simply because they have been overshadowed by the generations that came both

before and after them”

GENERATION YBORN BETWEEN 1976 - 2000

71 Million US Consumers Raised in the age of interactive media Upward earning potential + prime marriage years Bombarded with marketing messages from a young

age Marketers must use many forms of communication

to get their message to this group Driving the explosion in ‘casual living’ Focused on efficiency and practicality

Generation Groups as part of US Population in 2015

Computer Use by Generation

Generation Y Media Time

BRIDAL SEGMENTThe crystal/tabletop/giftware products available to this group of

consumers are vast.

“today's to-be-weds are registering for more innovative gift items, 75% of engaged couples still register for fine tableware, and 79% register for casual tableware” (Roper Starch Worldwide, 2000).

As of January 2005, through in-store and online registries, registrants on The Knot (a very popular website for people getting married in the US) will be able to choose from over 5,000 dinnerware patterns, 1,200 flatware options, 2,000 stemware choices, crystal and porcelain giftware items, and a multitude of other tabletop offerings

(Business Wire, 2006).

WOMEN’S SEGMENT

Significant impact on Crystal Product sales Women are the dominant household decision makers for

purchases of china and glassware Using the six steps of the purchasing cycle: expressing a need,

conducting research, evaluating brand options, setting a budget, making a final decision and making the purchase – women express the need for china and glassware purchases 88% of the time and in 81% of the time they make the final decision

This segment has been a focus of MicroTrend analysis and many sub-segments exist.

These niche segments represent a clear opportunity for marketers

US Female Population by Age

Female US Populationby Age and Race

WINE CONSUMER SEGMENT 2006 was the 12th consecutive year that total wine

consumption increased in the United States. 250 million cases of wine were sold (3.3% increase

over 2005) and per capita consumption of wine reached 2.88 gallons.

The United States is poised to overtake France and Italy as the world’s largest consumer of table wines.

Consumers in the Echo Boomer (or Y Generation), the 70 Million Americans now aged 13 – 30, are showing a greater interest in wine than any other preceding population segment.

Luxury Good Consumer Segment Luxury good sales worldwide soared to 150 Billion USD in 2006, of which 30%

can be attributed to the US market.

Luxury goods are attractive to many different segments of consumers; however, the wealthiest 20 percent of Americans were responsible for 39 percent of all consumer spending.

The high net worth consumers are the largest group of consumers for luxury

goods.

The High Net Worth target segment is geographically diverse.

According the Luxury Institute, wine spectator magazine was rated the highest by luxury consumers. Scientific American and Saveur also placed high in the categories of subject matter expertise and content relevance, respectively.

The same study revealed in 2007 that Islands and Vogue Magazines’ websites were the most effective consumer publication websites by high net worth consumers.

High Net Worth of Households in the US is

growing:

POS INFORMATION

CURRENT SYSTEM CONFLICT OF INTEREST FOR RETAILERS

& MANUFACTURERS CRM Investment “Ownership” of the customer relationship

Influence of Changing Marketplace on Data Sharing

Maturity of effective new technologies and processes

Increase in the number of retailers and manufactures who are attempting to become regional or global leaders

Value Chain Utilizing Information

Four Affluent Sub-Segments

MARRIED WITH MONEY + CHILDREN UP AND COMING OLD MONEY UPPER CRUST

Important Emerging MicroTrends: Unmarried, professional women in their 30’s and 40’s –

Highly educated women, no family responsibilities and high disposable incomes Empty Nesters –

Baby Boomers whose kids have moved out, creating a new stream of disposable income

Progressive “Prioritizers” – Well educated women who work but are prepared to leave their jobs to raise a family and then desire to return to the workforce.

Social Networking Moms – Web-savvy and 32 million strong, US mothers spend almost as much time online as women as an overall group.

Widening Geographic Differences – Half of all Americans now live in suburban areas (inside metropolitan regions but outside of the central city district), 30 percent of Americans live in urban environments and the remaining 20 percent of Americans live in rural areas (American Demographics, 2004).

New Product Marketing Goals Engage the customer in a positive experience that

tells a story and creates a product that the consumer loves to have in their home

Brands fill an emotional space “Understanding the relative impact of factors such

as primary physical product attributes, secondary product attributes and emotional motivators to purchase and brand, allows marketers and product developers to build a customer experience that enhances the value of the product that they sell”

MARKETING TOPICS OF INTEREST

Rising Media Costs Increased Number of Media Channels Effectiveness of New Media Channels Consumer Resistance to Traditional

Marketing Messages Explosion of Electronic Media Advertising

Options

Growth of Internet Advertising

IN BILLIONS OF USD

Internet Usage by Gender

Total US Online Ad SpendAS PERCENTAGE OF OVERALL ADVERTISING SPENDING IN THE US

US Online Advertising by Format

Projected Growth, New Media Platforms

How Advertising Mediums Effect Marketing Goals

Worldwide Magazine Advertising Spend

Asia Pacific Market (excluding Japan), EU (Germany, France, UK + Italy) and the US

Future for Crystal Products in US