Marketing Mix Methodology Marketing Mix Analysis Aids

Marketing Mix Methodology

Marketing Mix Analysis Aids Brand Planning Understand Sales Drivers Quantitatively Evaluate Short-Term Marketing Plan Marketing Mix is a quantitative technique used to decompose sales by key business drivers and identify sources of sales change. Assess Key Vehicles & Tactics Plan Smarter Aid in the Fund Allocation Process Guide Marketing Strategy Development Effectiveness & short-term ROI are calculated to assess historical response and provide insight as to how marketing impacts consumer behavior. Maximize volume or profitability by allocating budgets between and within different marketing vehicles. 2 Copyright © 2010 The Nielsen Company. Confidential and proprietary.

What goes in & what comes out? Dependent Variable Weekly Volume Trends Advertising (TV, Print, Radio, OOH, Interactive) Trade Promotion (TPR, Feature, Display, Feature & Display) Independent Variables Consumer Promotion (Coupons, Sampling, DTC) Other Factors (Price, Distribution, Competition, PR, Professional Efforts/ Referrals) Market Mix Model Pooled Regression Evaluation of Current Marketing Efforts Volume Drivers Return on Investment Effectiveness of Promotions, Media, Consumer Pricing Sensitivity Competitive Learnings Simulations for Future Planning Simulate an optimized plan Impact of High/Low Spend Re-allocation of Spending Ongoing Evaluation Real Time Modeling (Quarterly / Monthly) 3 Copyright © 2010 The Nielsen Company. Confidential and proprietary.

What goes in & what comes out? …and quantifies changes in sales due to marketing and other sales drivers… Marketing Mix Analysis Takes Total Sales Volume… …so sales decomposition can be produced • We are able to deliver knowledge of how much volume came from each measured marketing element. In this case, Trade activity contributed 17% of total volume. • Marketing incremental sales (34%) would be lost immediately if marketing was pulled. • Incremental volume feeds into base volume growth over the long term. Without incremental activities to bring in new buyers and continued competitive 4 activities, base volume would erode. Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Clarifying ‘Base’ verse ‘Incremental’ volume Base Sales derived from non-spending elements (Seasonality, Brand Equity, etc. ) PLUS long term effect of Incremental Elements Base Volume + Incremental Volume *Base Volume does NOT refer to your Base Brand Incremental Sales derived from Marketing, Consumer & Trade Spending = ROI 5 Copyright © 2010 The Nielsen Company. Confidential and proprietary.

How can we measure all the different activities? • If our support looked like this we would not be able to determine the impact from TV vs. Print vs. i. Media…. • All support is too highly correlated to determine the impact an individual component has on volume. – However, we would still be able to determine the impact ALL elements combined have on volume Volume 300 Trade % ACV PR Imp i. Media Imps Print TRPs TV GRPs 180 Total Value (000's) 160 250 140 Support 200 120 100 150 80 100 60 50 40 0 wk 10 wk 19 wk 28 wk 37 wk 46 wk 55 wk 64 wk 73 wk 82 wk 91 wk 100 20 • However, our support typically looks something like this where there is variation not only in the weekly support levels of each individual element, but also in the 6 support timing. • Elements are not highly correlated with each other - - but are correlated with Sales! Copyright © 2010 The Nielsen Company. Confidential and proprietary.