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Consumer Insight: July 2009
Role Reversal – Mr. Mom Goes Shopping.

Almost one-third of men in the U.S. are now the principal shoppers in
the household, accounting for over $201 billion dollars—nearly 50% of
consumer packaged goods annual spend. With more men in the aisles
shopping, marketers need to rethink brand strategy.
Auto Industry’s Wild Ride is Getting Smoother.

Fuel prices and the economic downturn have put the brakes on car
sales—the lowest in 25 years. But hot spots surfaced like hybrids,
luxury vehicles and exciting new designs and an uptick in purchase
intent bodes well for future sales.
Now You’re Speaking My Language.

Spanish-language networks not only delivered more viewers to
advertisers; they also delivered a more advertising-receptive audience.
For marketers trying to penetrate the burgeoning Latino market, the
key to success resides with language.
Cost-Savings Innovation in a Downturn.

Downsizing, upsizing, package material changes, and product
reformulations are all ways to cut costs and streamline operations in a
tight economy—but the right strategy for one may be completely wrong
for another.
From Hayworth to Cansino: Turning the Tides in Latino Movie-

Going Sensibilities.
Hispanics contributed an estimated $1 billion to the U.S. box office in
2008 and are 24% less likely than the average American to cut back
on movies during the recession. Trends demonstrate that a Latin
sensibility can distinguish a blockbuster from a flop.
Organized Chaos: Global Data Harmonization.

How do you support decisions on a global scale, when the data is not
global? With 85% of individual item codes for consumer packaged
goods unique to their country of origin, market-by-market analyses
present unique challenges.
© 2009 The Nielsen Company. All Rights Reserved.
http://en-us.nielsen.com/main/insights/consumer_insight/July_2009 [6/26/2009 2:45:53 PM]

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Home>insights>Consumer Insight>July 2009: Target>Role Reversal - Mr. Mom Goes Shopping Related Articles
Role Reversal - Mr. Mom Goes Shopping In Store Media Must Change with the
Times
The way consumers respond to in-
By: Peter Leimbach, V.P., Multimedia Sales Research, ESPN store promotional messages and media
is changing, with traditional appeals
CI SUMMARY: Over the past 20 years, the American household has changed and traditional losing some potency, according to the
roles have shifted with men now taking on a greater percentage of the household shopping results of a new poll that surveyed 999
than in the past. Today, almost one-third of men are now the principal shoppers in the home. shoppers shortly after completing a
With more men in the aisles, marketers need to better understand how they impact brand shopping trip.
sales and how to reach this growing segment of principal shoppers. A Shift in Shared Responsibility
Setting up dad as the punch line is
easy in a world where taboos have
The past two decades has seen a role reversal of sorts taking place: the traditional roles of vanished and entertainment sells
men and women are being redefined to better reflect today’s social norms. Today’s American everything. But in that same world -
households are looking less like Donna Reed—the paradigm for the ideal 1950’s family—and one in which traditional gender roles
more like Mr. Mom. are mutating and men are doing more
domestic duties than ever - some say
Shifting norms that advertisers who flip the bird at dad
Since 1985 there has been a dramatic shift in the Traditional roles of men are, in effect, doing it at tomorrow’s
composition of male principal shoppers in the U.S. and women are being core customer.
Several factors are contributing to this trend. First, the redefined...
traditional family unit has multiple variations today. From
two working parents to single parent homes, a younger
generation is being exposed to new norms. Second,
Americans are waiting longer to get married. According to the U.S. Census Bureau, in 2008,
the median age at first marriage was 27.4 for men and 25.6 for women vs. 25.9 for men and
23.6 for women in 1988. Lastly, Americans are living longer and as Baby Boomers retire, the
men of that generation are shopping more than their fathers or grandfathers ever did.
Today, almost one-third of men are now the principal shoppers in the household. With more
men in store aisles, marketers need to better understand how to reach this growing segment of
shoppers.
Increasing presence
Business Week reported in a September 2006 article, Men’s share of retail
“Secrets of The Male Shoppers”, that “men buy, women shopping trips increased
shop: the sexes have different priorities when walking in all outlets...
down the aisles”. This is an important distinction for
marketers to consider when targeting male shoppers.
Nielsen data shows that while females dominate shopping trips in all channels except
convenience/gas stores, their share of trips has declined in all outlets from 2004 to 2008/2009.
On the other hand, men’s share of retail shopping trips has done just the opposite—increased
in all outlets. The channels with the greatest relative importance to men include convenience/
gas outlets, warehouse clubs and grocery stores.
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And while females out spend male shoppers per trip across all retail channels, the average
basket size spend differential is not as large as might be expected. The fact that women
conduct more “planned” shopping trips than men is one explanation for the higher dollar
amount..

Overall, men are substantially increasing their average dollar basket size across all channels—
especially in grocery where they have increased spending by 56% over a five year span.
Additionally, while their share of spending is growing across all retail outlets, women’s share of
spending has declined. In the grocery channel, men’s share of dollars increased from 30% to
38%—a 27% increase versus women’s decline of 11%.

Not just beer and brawn

A shopping report commissioned by ESPN to evaluate Nielsen sales data based on the
presence of the male head of house as the primary or secondary shopper on a trip revealed
some unexpected findings.
From 2006 to 2008, there has been an upward trend in both the amount of dollars spent by
men and their shopping frequency. The occasions when males were the primary or primary/
secondary shopper have increased by 4% and 3% during this two-year time period and the
total dollars spent has increased by 8% and 7% respectively.

And while a high percentage of dollars spent by men are in fairly predictable categories such
as grooming care products and alcoholic beverages: men’s hair coloring (86%); men’s
depilatories (84%); gin (83%); scotch (81%); and pre-shave cosmetics (80%), a peek inside
their shopping basket reveals they are likely shopping for the family too.
More than half of the principal male’s shopping basket consists of items that indicate they are
not just shopping for themselves. Examples include:
● Men’s External Breathing Aids (61%)

They are not just
● Canned Seafood (61%)
shopping for themselves...
● Refrigerated Juices, Drinks (61%)
● Prepared Food-Ready-to Serve Stew (59%)
● Herbal Package Tea (57%)
● Prepared Food-Ready-to Serve Lasagna (55%)
● Health Bars & Sticks (54%)
● Non-Sliced Refrigerated Lunch Meat (53%)
● Refrigerated Yogurt and Shakes (52%)
● Dishwasher Rinsing Aids (52%)
Impact on media strategy

Advertisers need to evaluate the importance of men’s purchase volume for their brand and
competitive brands and determine whether the current media mix appropriately reaches men
purchasers. Traditional media tends to fall into 3 categories:
1. Programming that skew primarily female (network soap operas and female-targeted
cable networks like Lifetime and Oxygen)

2. Programming with evenly skews male/female (network prime time, broad-based cable
networks like USA Network)
3. Programming that skews male (primarily sports networks)
Nielsen conducted an analysis to determine how well a given media schedule was delivering
both male and female brand users for a leading brand in the cold remedy category. The
findings revealed that men accounted for 48% of brand users and 48% of brand sales came
from shopping trips where the male head of house was the primary/secondary shopper.
And while the advertiser’s schedule included a wide mix of broadcast and cable networks, it
focused primarily on targeting women and adults. Sports networks accounted for only 2% of
the schedule’s GRPs. This mix resulted in a schedule where only 38% of the brand target
impressions fell against men—far less than their share of brand spend.
Continued quest
The male as a principal shopper is not an emerging trend, as marketers have been struggling
to understand this segment for over 20 years. But as marketers learn more about where and
what this consumer segment buys, they are better able to guide brand positioning and media
targeting to capitalize on this target when they are in the aisles.
Contact us to learn more.

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Home>insights>Consumer Insight>July 2009: Target>Auto Industry's Wild Ride is Getting Smoother Related Articles
Auto Industry’s Wild Ride is Getting Smoother Passing Lane - Hyundai’s best
chance to become a bigger player
may have arrived
By: Julie Enzweiler, Automotive Research Director, The Nielsen Company When 90 million Americans tuned into
the Super Bowl in February, they were
CI SUMMARY: In economic terms, the auto industry was hit by the perfect storm: high gas looking for an escape in more ways
prices, tight consumer financing, plant closings, brand reductions, dealership pruning, than just watching the game and
employee layoffs, longer vehicle retention, surplus inventory, manufacturer bankruptcies and downing a few beers.
waning consumer confidence. Despite a 37% decrease in total auto sales over 2008, bright Behind Mercedes’ $75 Million E-
spots persisted: the redesigned Forester revved up Subaru sales while price leaders Hyundai Class Push
and Kia gained traction from new models. Online media has changed the rules of the road for With the launch of a $75 million
auto marketing by placing consumer generated media squarely in the driver’s seat. campaign for Mercedes-Benz’ 2010 E-
Class, U.S. VP, Marketing Steve
Cannon discussed the psyche of
Unprecedented. Unbelievable. Unfathomable. The state of the auto nation is shaky at the Mercedes owners, the role of 'rational
moment, but all is not lost. Offsetting the unrelentingly negative news are 2009 highlights like a red meat' in the ads and why the
69% spike in Sorento model sales, a 48% increase in Sedona sales, and the successful launch automaker is creating mobile apps for
of the economically-priced Hyundai Genesis and Kia Soul, both targeting younger drivers. the first time. The following are
excerpts of an interview with senior
reporter Andrew McMains.
Conversely, luxury vehicles that attract middle-aged consumers managed to outpace the
market, although the category experienced a long tail effect, a two to three month delay from Mercedes Gives Rational Reasons to
shopping to closing the sale. Only one domestic car manufacturer—Lincoln—outperformed the Buy
market, even though sales remained in negative territory on a year-to-year basis.
Auto Ads Are Primed to Kick Into
Gear
Fueling sales Wall Street is trying to assess the
The Nielsen online panel, comprising 250,000 Offsetting the
impact of the General Motors
individuals representing the U.S. online population, unrelentingly negative bankruptcy on media companies, and
detected another hopeful sign for new vehicle sales news are 2009 highlights... at least one analyst’s conclusions
based on Internet new vehicle shopping patterns. While might surprise you.
online new car shopping downshifted by 9%, this
represented a mere fraction of the precipitous 37% sales
decline, suggesting the existence of pent-up demand. Consumers sought out roadworthy
vehicles like the new Ford Fusion, proven gas sippers like the Toyota Prius and Honda Civic,
or buttoned up their wallets and opted to maintain their current car or buy used.
Foreign automakers benefited disproportionately from escalating gas prices because of the
consumer perception that their vehicles—especially hybrid and diesel models—are more fuel-
efficient. German and Korean automakers realized the largest gains in online vehicle shopping
activity, posting 1.7 and 2.2 percentage point share increases respectively, while their U.S.
counterpart slid 5.5 percentage points. The Volkswagen Jetta and CC models, BMW 1- and 3-
series and Mercedes-Benz E class were among the variants driving shopping inquiries.
Model behavior
Sport utility vehicles, with some 61 models available, The biggest
continue to hold the “most shopped” position and rank disappointment proved to
number one in the U.S. for share of new vehicle be the basic economy
shopping. Although activity waned with rising gas prices, vehicle...
consumers appeared to be hedging their bets, shopping
longer in the hopes that gas costs would plummet and
justify the purchase. And while the government is putting
pressure on automakers to reduce these larger vehicles from their fleet, demand at the
moment is not supporting this mandate.
The biggest disappointment among model types proved to be the basic economy vehicle,
which peaked with a nearly 30% online shopping share in May 2008 when gas prices were at
the highest (around $4.00/gallon), and dropped to half that a year later when gas prices
declined to about $2.00/gallon.
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Upper middle car models like the Fusion, Camry, Accord and Altima maneuvered into the
second most shopped segment by April 2009, with hybrid variants moving the sales needle.
Hybrids remain an exciting, but emerging segment, as consumers wrap their heads around the
concept and take their time investigating the genre. Luxury entrants cruised along with steady
sales, experiencing a boost from the Hyundai Genesis introduction. Luxury models attract
aspirational buyers who savor the shopping experience and take their time to consider price
before taking the plunge, elongating the buying cycle.
Trading places
Rankings of the Top 25 automakers based on online shopping activity wheeled in some
interesting changes, with Kia jumping 11 slots from number 24 last April to number 13 in
April 2009. Volkswagen leapfrogged seven spots from

number 15 to number eight courtesy of the CC—their Kia jumped 11 slots from
most-searched vehicle on the Internet. The redesigned number 24 last April to
Forester sparked consumer interest as well and elevated number 13...
Subaru to the number 22 slot, up from 27.

Saturn fell out of orbit, dropping 13 spots to number 23, followed by Buick’s 12 point decline,
GMC’s six point downslide and Pontiac’s five point plunge. A heads-up to Volkswagen, the
beneficiary of online buzz over the curvy CC: while initial online interest spikes rapidly, it can
quickly taper off. The trick is to sustain interest over time and keep the vehicle top of mind with
prospective buyers.
Setting your sites

The auto industry enjoys a relatively unusual electronic landscape, with a host of powerful,
established third party shopping sites available to consumers like Yahoo! Autos,
Kelleybluebook.com, AutoTrader.com and cars.com to name a few. Manufacturer or OEM web
sites need to maintain a polished look and feel with robust content to stay in the game, offering
complementary information and highly interactive features like build-a-car customization tools,
360° rotating car views, dealer information, engaging games that keep customers returning to

the site, virtual experiences, testimonials and incentives.
While 86% of online shoppers rely on third party sites for

price information, OEM sites are the preferred source for 86% of online shoppers
visualizing build-outs, researching special offers and rely on third party sites
obtaining financing information about tax incentives, for price information...
special offers and government programs. The combined
use of both third party and OEM sites actually enhances
the consumer shopping experience, providing complementary rather than competing
information.
Value of video
Kia Soul, one of the year’s most successful launches, earned kudos for an exciting web site
that features techno pop music, robot animation, a personalized video from the chief designer
about his “rhino with a backpack” vision, a floating picture gallery, build-a-soul feature and
“Escape from Hamsterdam” game, which leverages the primary advertising visual—hamsters.
Of course, the under $14,000 price tag and 31 MPG green angle helped jump start things.
Video streaming is playing out across the computer

screens of America, with 124% annual growth overall, Nothing engages
and a turbocharged uptake rate of almost 200% for Ford consumers like real-life
videos. At last count, there were more than 80 million clips from owners and
videos available on YouTube, and that video library is test drivers...
growing by some 200,000 clips per day. Nothing
engages consumers like real-life clips from owners and
test drivers sharing their experiences. In addition to
posting videos on OEM sites, manufacturers can enhance both reach and impact by pushing
out digital clips to social media outlets like YouTube, Hulu, iTunes, Facebook and others.
Ad impressions
Nielsen data show local magazines, national newspapers and local radio taking the biggest hit
with shrinking ad budgets, accounting in large part for the precipitous 31% downtrend in total
first quarter auto ad spending from 2008 to 2009. Online ad impressions ramped up during Q1
of 2009, stabilizing at approximately five billion impressions per month during the March to May
period, with a correspondingly constant spend rate of $35 million per month.
Following a classic advertising paradigm, exposures

may indeed be rekindling demand. Nielsen surveys “Intent to buy” is
suggest that “intent to buy” is rebounding from an all- rebounding from an all-
time low in the Spring of 2009 to a more historic level as time low in the Spring of
seen in summer’s past. It seems that consumers have 2009...
been kicking the tires, but doing so via virtual
showrooms.

Listen and learn

“Listening” is the new marketing. To succeed in a multi-media world, automakers will need to
engage and interact with shoppers, delivering a complete experience from initial contact
through post-purchase. In the process, they’ll need to leverage the power of search and social
media, developing a cadre of independent reviewers and product evangelists willing to spread
the word about their cars, without filters.
Search engines represent the first point of contact for many shoppers, and carmakers would do
well to influence the tone of the conversation and their placement on the page one rotation.
Deploy the power of Web 2.0 on OEM sites, incorporating quotes, surveys, reviews,
testimonials, buyer videos, interactive games, audio and video feedback loops, special offers
and incentives that hook the consumer and give them a reason to keep coming back.

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Home>insights>Consumer Insight>July 2009: Target>Now You're Speaking My Language Find Out More
Now You’re Speaking My Language View the most memorable TV

commercial, product placement and
By: David Kaplan, SVP Research and Product Development, Nielsen IAG innovative ad for the last week, based
on television viewers’ responses.
CI SUMMARY: Spanish-language ad spending is on the rise—posting gains in just about
every major product category in 2008. What is the best strategy to reach an audience whose
language proficiencies and preferences range from Spanish-only through various degrees of
bilingual skills to English-only? Language holds the key to success as a strong emotional link
is forged with the Hispanic consumer when ads are rendered in their native language. Related Articles
Putting on Brave Faces

Even as the U.S. gears up for a formal census expected Relentless optimists, the two major
to validate the size and scope of its Hispanic population, The Spanish-language Hispanic broadcast networks, Univision
advertisers are way ahead of the learning curve. While sector increased by 3%, and Telemundo, continue to
2008 national TV advertising grew at a slower rate than posting gains across aggressively pitch the power of national
prior years, the Spanish-language sector increased by every major product TV - or at least their particular brand of
3%, posting gains across every major product category it - to advertisers in the current upfront
category...
with the exception of automotive offerings. sales marketplace.
Coke Tells Hispanics: 'Unleash Your
Dreams'
Coca-Cola began airing a new
campaign targeting the U.S. Hispanic
market last week that translates the
beverage company’s 'Open Happiness'
theme in its general marketing
campaign to 'Destapa La Felicida.'
Telemundo Upfront: Deal With
Televisa Expands
With record ratings (up 32% among
adults 18 to 49) under its belt this
season, Spanish-language broadcast
network Telemundo announced a
batch of new shows for the 2009-10
season.
Together, advertiser spending within the Top 10 Spanish-language product categories

expanded by 8% over prior year results, reaching $2.9 billion in 2008. Leading the way on a
dollar basis were pharmaceuticals at $663 million, followed by automotive (factory and dealer
associations) at $530 million, wireless telephone services at $315 million, department stores at
$307 million and quick service restaurants at $300 million.
The fastest growing segment reflects the rising digitization of the Hispanic population: satellite
communication services increased their spend on Spanish-language TV stations by 124%,
dwarfing the gains by runners-up auto insurance at 39% and pharmaceuticals at 32%.
And this dollar shift accompanies a rise in audience sizes for the Spanish-language networks in
the 2008/09 television season. The two major Hispanic networks, Univision and Telemundo,
garnered 11% more viewers overall last season, and reported a 6% increase in the coveted
http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/now_youre_speaking (1 of 5) [6/26/2009 2:48:19 PM]

adult 18-49 primetime audience demographic (based on Live+7).
But audience size is only part of the story. As an advertiser trying to reach the burgeoning
Latino market, it’s also critical to target Hispanics with a high-quality ad in an environment
where they are most engaged and receptive to the commercial message. And to do that
successfully, from both a media and creative perspective, all signs point to language.
Bilingual preferences
Nielsen IAG measures the impact of advertising among Hispanics of all acculturation segments
across English- and Spanish-speaking primetime television every day. Much recent attention
has been placed on the emerging segment of bilingual Hispanics, who can seamlessly switch
from English to Spanish and surf from Criminal Minds on CBS to Cuidado con el Angel on
Univision without losing much in translation. But as an advertiser, where can you more
effectively communicate with this consumer?
Reach and cost considerations aside, research shows

that viewer response is significantly stronger in general Viewer response is
on the Spanish-language networks. Bilingual consumers significantly stronger on
report 30% higher recall rates for advertising creative the Spanish-language
executions and the advertised brand when commercials networks...
are seen on Spanish-language programming (on
Univision and Telemundo) rather than English-language
broadcast networks.
Language advantage
Part of the advertising performance advantage can likely be attributed to the unique
characteristics of the Spanish-language networks that offer reduced ad clutter and increased
ad exposure frequency, as well as Hispanic media consumption factors like lower DVR
penetration.
But that doesn’t account for one of the most powerful

points of difference: likeability, a key ad effectiveness

measure. Ads on Spanish-language TV rated 62% on Ads on Spanish-language
the likeability scale on average versus just 41% for spots TV rated 62% on the
featuring the same brand on English-language TV likeability scale...
among bilingual consumers.
On the recall measure, Spanish-language TV ads achieved a 35% brand recall score versus
27% for English-language ads. In many cases, these substantial gaps were seen even for
“translated” spots, where the ad executions mirrored the version airing on general market TV,
suggesting that the difference lies in something other than the creative treatment or content.
Emotional connection
The performance differential points to a strong emotional link forged between the consumer
and their native language. Spanish-language networks uniquely provide a “language outlet” for
bicultural Hispanics—many of whom may be speaking English in their daily professional lives,
but prefer Spanish in their private or family lives. The television viewing experience, when
delivered in Spanish, allows viewers to connect with their culture, history and identity in a way
that may not be readily available elsewhere. The translation for marketers: it appears that the
bilingual consumer’s appreciation for in-language experiences results in a more favorable
impression of those commercials which deliver them.
And the power of language becomes even more evident

when evaluating creative-level differences. Ads created Ads created specifically
specifically for the Hispanic market on average for the Hispanic market
outperform those that are merely lifted or translated from outperform...
general market TV spots, earning 16% higher brand
recall results and 22% better message recall. The
factors behind improved performance appear to be culturally relevant cues embedded in the
advertising such as Hispanic characters, music and themes.
Character counts
But more than any other element, the inclusion of a Spanish-speaking character(s) in the ad
appears to be the driving critical success factor. Consistently, these types of ads resonate
more with viewers, receiving higher brand recall and message communication scores than
those without such characters. The finding holds for both Hispanic original spots (+29% higher
brand recall) and translation spots (+37% higher brand recall), underscoring the benefit of
incorporating more relatable talent who speaks the language in the ad.

Creating a specific spot from scratch for the Hispanic market, which incorporates culturally
relevant themes and Spanish-speaking characters, generally results in stronger impact, but
may not always be practical given production costs and timing considerations. As an
alternative, utilizing bilingual actors in ads that are merely “re-purposed” from the general
market appear to have some benefit. In this scenario, the creative content and narrative plays
out identically to the English-language version (with cultural adaptations where necessary), but
the script is verbalized in Spanish. In other words, in the absence of any other cultural cues, an
ad where the characters are at least speaking in one’s native language is more likely to grab
the viewer’s attention and drive brand impact—regardless of whether it was designed
exclusively for the Hispanic market.
Screen scene
Hispanic consumers have become a force to be reckoned with across screens large and small,
fixed and mobile. According to Nielsen May 2009 universe estimates, 82% of Hispanics have
cable plus (expanded cable package that does not require a cable box)—a usage level which
has risen by 12 percentage points from just four years ago and significantly narrowed the gap
with non-Hispanics (89%). One-third of Hispanics have wired digital cable, another 33% have
direct broadcast satellite subscriptions, 21% are DVR owners and 88% have DVD players.
Two-thirds of Hispanic households have personal computers, with six in ten also signed up for
Internet access at home. Nearly seven in ten of those Hispanic Internet households have high
speed broadband access—almost identical to the general population percentage. While all
Internet users average 28.5 minutes online per day, Hispanic households log slightly less time
at 21 online minutes per day.
Nielsen reports that Latinos who are online are more

likely to download music than the general Internet Latinos who are online
population—32% of Hispanics download music online are more likely to
versus 24% of all Internet users. The same pattern holds download music...
true for video downloads, with 17% of online Hispanic
households pulling video off the web, versus 14% of all
Internet users; 9% of online Hispanics downloading movies versus 6% of the general Internet
population; and 8% of Hispanics accessing TV shows online versus 7% of all Internet users.
Wired Hispanics trail the general Internet population when it comes to online shopping. While
70% of Internet users shop online, spending approximately $861 per year, just 62% of
Hispanics purchase products on the web and spend $762 annually.

Dialing in
Mobile phones have made tremendous inroads in the Latinos receive or make
Hispanic community, which trails only the African- more phone calls per day
American segment in number of minutes per month (783 than any other ethnic
minutes versus 811 minutes respectively). Although group...
Latinos don’t spend as much time on the phone, they
receive or make more phone calls per day (14) than any
other ethnic group, and have the phone bills to prove it—
$94 per month compared to African Americans $89, Asians $82 and Whites $80. Roughly two-
thirds of Hispanics used text messaging services in the last 30 days, about one-fourth utilized
mobile Internet, and the same percentage sent an email in the past month.
What’s clear is that Hispanics represent a viable and growing segment in the electronic
marketplace. Their increasing “three screen” media consumption as well as their favorable
predisposition to advertising make them an audience that can be harnessed on new platforms
to boost brand impact.

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Home>insights>Consumer Insight>July 2009: Target>Cost-Savings Innovation in a Downturn Find Out More
Cost Savings Innovation in a Downturn How Do I Approach Pricing in this

Economic Environment?
By: Mike Fridholm, V.P., Client Consulting, The Nielsen Company
CI SUMMARY: Based on an examination of over 100 client engagements related to cost
innovation conducted over the past five years, Nielsen illuminates the right way to navigate
this challenge and highlights important principles to adhere to in embracing the risks and Related Articles
rewards of downsizing, upsizing, changing the package material, and making product
reformulations.
Folgers Roasts a Smaller Can
Procter & Gamble confirmed today that
it has shrunk the size of its Folgers
Manufacturers are feeling the pinch in demand in many categories as a result of consumers’ Classic Roast and Coffeehouse Series
tightening wallets. As many also face increasing costs in areas such as health care, energy, as part of an 'enhanced, proprietary
and materials, some must consider cutting costs in an effort to maintain sales and profitability. roasting process.'
These changes include increasing price, revising package size or materials, and changing the
Experts: Strong Product Portfolio
product formulation.
Helped P&G’s Q4 Profits
Procter & Gamble’s profitable fourth
If there’s one overarching message for manufacturers,
Now is not the time to pull quarter earnings, reported today, are a
it’s this: Now is not the time to pull back on innovation or testament to brand strength and a
marketing support. Indeed, Nielsen research reveals that back on innovation or diverse product portfolio, experts say.
brands that continued to invest in innovation and provide marketing support...
marketing support during past economic downturns have Betting on the Uncertain
performed significantly better after the economy If you think hard, you might be able to
recovers than their peers. As manufacturers pursue innovations that involve cost savings, remember the good old days of, say,
careful attention to consumer reaction is critical for success. this past summer - back when some
economists still had an argument for
Consumers are extremely savvy—they notice changes to products they care about and are using terms like 'slowdown' or
'softness' in place of the dreaded 'r'
increasingly vocal, particularly on social networks, blogs, and on-line discussion boards. All the
word. How quickly things change.
attention given these days to the media “groundswell”—and the high-profile nature of products
getting lauded or attacked on YouTube, Twitter or other consumer-generated media—ups the
ante for manufacturers to link changes to packaging or product to more substantial benefits as
they pursue this strategy.
Guiding principles
Based on Nielsen’s examination of over 100 client Four important principles
engagements related to cost innovation conducted over help manufacturers make
the past five years, four important principles illuminate wise cost-reduction
the way to help manufacturers make wise cost-reduction decisions...
decisions that will drive successful consumer
acceptance in the marketplace.
● Downsizing the Package Size: a somewhat risky change, especially evident to a brand’s
heavy users, which can best be mitigated if additional auxiliary benefits are conveyed with
the change.
● Upsizing the Package Size: a preferable consumer option, which still has pitfalls if
pricing crosses a consumer threshold, or if the consumer has a difficult time perceiving the
relevance of the larger package beyond solely “more for the money.”
● Changing the Packaging Materials: a margin-enhancing move that may also be
leveraged for positive consumer good-will; yet must not erode functionality, structural
integrity, or brand equity.
● Changing the Ingredient Formulation: a high-risk move that must not compromise the
consumer experience, perceived quality, or product efficacy.
Downsizing the package size Downsizing and

Based on 40 Nielsen BASES studies of cost savings downcounting alone can
innovation and 59 packaging studies, Nielsen found that be a risky strategy...
downsizing and downcounting (i.e., moving from a 6-
pack to 4-pack) alone can be a risky strategy. Over time,
that data shows that even when manufacturers consider
http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/cost_savings_innovation (1 of 4) [6/26/2009 2:48:57 PM]

adding a smaller size to an existing product line, the resulting increase in purchase frequency
of the new smaller size is not enough to offset the negative transaction size impact to the
business.
A few exceptions to this trend include when the smaller package added: a) unique, incremental
channel distribution, b) new consumers to the franchise, or c) a unique usage occasion that
was independent of the prior large package.
The most important success factor to downsizing is to combine it with innovations that yield
additional positive consumer benefits or experience with the product. What’s more, these
benefits do not necessarily add cost. Examples of successful strategies include adding a
resealable benefit to the smaller pack along with new graphics and a different package shape,
moving from glass to plastic containers, or combining “new news” with a sleek new convenient
and easy-to-transport package. Presumably, these changes add perceived value to the product
experience, offsetting a straight package downsizing which likely could have been viewed as
negative on its own.
Additionally, Nielsen analyses have shown that

downsizing was received better than price increases. Downsizing was received
Successful downsizing with constant pricing typically better than price
works best under the following conditions: increases...
● The manufacturer is a significant market share leader within the category.

● The downsizing includes a large number of SKUs within the category so as not to penalize
a small subset of the competitive frame of reference.
● The percentage package size reduction is less than 12%.
● The categories have highly expandable consumption.
Upsizing the package size

Clearly, consumers like large economy packs. And for manufacturers, their appeal lies in
economies of scale and more efficient use of plant capacity. Not to mention that consumers
buying large quantities can stay out of the competitive shopping cycle for a longer period of
time. Economy or bonus packs can be extremely well received, particularly when they add
benefits beyond a better price per unit.
There are a few key stumbling blocks to a successful

upsizing, including pricing an item too high or offering There are a few key
packaging that is too large to be convenient. In one stumbling blocks to a
case, doubling the size of a kitchen/bathroom surface successful upsizing...
cleaner produced better value perceptions, but no
increase in purchase interest. One issue was the
dilemma of home storage; the other, a concern that consumers didn’t need so much product.
Other examples showed that while a product may have perceived functional advantages,
concerns around the absolute price could exceed a cost threshold. Upfront consumer
communication can make or break an up/downsizing effort. Manufacturers should consider
including quick, simple communication, possibly at the point-of-purchase to reassure
consumers of product benefits.
Another consideration is retail shelving. How will the package fit on retail category shelves, and
will it be easy to achieve at least a full case pack out on the shelves? Additionally, choosing the
right retail channel for distribution is an important factor as warehouse club shoppers, for
example, may react less favorably to upsizing ideas since the packaging isn’t much different
than the big boxes they already buy. Despite somewhat positive consumer reactions to the
broad idea of upsizing, it is not always an easy decision to simply say “go”. Consulting retailers
regarding these initiatives in advance may be especially helpful.
Changing the packaging

Innovative packaging changes have the potential to not only create cost savings to the
manufacturing process, but also generate positive good-will media buzz. Such innovations can
include moving to a less expensive package closure or seal, reducing the amount of package
material, or omitting a current element of the packaging. These innovations tend to be novel; so
while such initiatives may present less risk to the portfolio, they are also harder to identify.
Similar to shifting away from a more expensive

ingredient to a less expensive one, moving to less

expensive packaging material will produce a direct

increase to margin. However, packaging changes must Packaging changes must
not diminish brand equity perceptions or the product not diminish brand equity
experience. Some beverage testing has shown that a perceptions...
simple move from glass to plastic, while well-received by
consumers, may have a long-term impact to equity. In
some cases, the change can accompany a new benefit—but unlike most other cost-savings
methods, a package change does not necessarily need to be coupled with “new news” to be
successful.
Another avenue of package innovation is reducing the quantity of a particular material in the
packaging. For example, Pepsi’s Aquafina brand received considerable favorable press
regarding their removal of 20% of the plastic weight from their half-liter bottles. Not only did the
consumer-centric focus not impair functionality, but this cost-savings initiative was viewed
positively as a clear environmental benefit.
Changing the formulation

With rising costs of goods and pressure to keep prices low, there may be a temptation to cut
corners on product quality by decreasing the costs of production. However, when Nielsen
asked consumers specifically about what they want manufacturers to do in a struggling
economy “produce slightly lower quality products, but keep the price the same” was the
absolute last thing they wanted to see happen.
Strong product performance is critical to long-term

survival in the marketplace. By changing the product By changing the product
formulation, manufacturers risk impacting consumers’ formulation,
experience with the product and ultimately their manufacturers risk
acceptance of it as well. And, while a strong product can impacting consumers’
yield consumer loyalty and much greater sales over the
experience...
long-term, making formulation changes as a direct
reaction to the economic climate may alienate

consumers now, with little chance to win them back in the future without increased investment.
As such, this strategy has one of the highest risk profiles of the various cost-saving strategies
explored.
This does not mean that product formulation changes should be completely rejected as a
potential cost saving strategy. There are manufacturers who have been successful, and there
are a number of considerations which can help determine if a given situation merits
consideration of a formulation change, such as:
● Will the change meaningfully affect the current consumer experience?

● Does the product have a simple or complex flavor profile?
● Can the product be moved to a higher concentrated formula?
● Can the formula change be framed in a positive way?
First and foremost, know your product. Specifically, know whether consumers find your product
taste profile to be simple or complex. Chocolate provides a good example of a simple taste
profile, where there is one primary flavor and modifying the formulation would likely change that
flavor. A more complex product example is frozen pizza, where lots of flavors work together
and changing one element might not have as great an impact on the end consumer experience.
Another reformulation consideration is to move to a higher concentrated formula. Increasing

the concentration may allow for less packaging or fewer ingredients, which can lead to cost
savings in production and positive consumer efficacy perceptions. The laundry care category
has embraced this trend successfully, where the bottles are easier to handle/store, and the
detergents provide the same cleaning power as their former counterparts. This strategy is not
limited to laundry care. Other household care categories like cleaners and dish soaps, personal
care categories like body wash, or even food and beverage categories like powdered drink
mixes and sauces are all potential candidates.
Consumers seek value

In the end, it is all about the consumer seeking more value for their currently limited dollar. And
value is more than price. It begins with a product satisfying a need and takes into account the
alternatives available to satisfy that need. This requires work on the part of the manufacturer to
ensure that the product continues to deliver and the brand remains relevant in a changing
environment.
Cost-saving product innovations, when done in isolation, tend to lead to declines in perceived
value and consumer appeal. Manufacturers need to know their consumers and ensure that
cost-saving changes are still providing additional positive auxiliary benefits. In doing so,
potential declines in perceived value or appeal will be mitigated, and opportunities for sustained
sales or growth will be increased.
Contributing writers to this article include: Mark Leiter, Emma Kronick, Matt Cahill and Jeff Day.

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/how_do_i_approach
Home>insights>Consumer Insight>July 2009: Target>How Do I Approach Pricing in this Economic Environment?
How Do I Approach Pricing in this Economic Environment?

Today’s economic environment raises many questions about pricing. Given inflation a year
ago, recession since then and stressed consumers, many CPG marketers are completely re-
evaluating their pricing strategy and asking “What are the new pricing fundamentals?” Just ask
Nielsen.
In this audio podcast, two of Nielsen’s foremost authorities on price strategy will answer the
most popular questions they been receiving from CPG manufacturers about pricing in today’s
economic climate.
Click here to listen: Pricing (Duration: 10:57 minutes)
● What has this recession changed for marketers thinking about price?
● Are size changes better than price changes?
● Given the economy and the growth of Walmart, Dollar stores and other value retailers,
isn’t cross-store price elasticity something we should focus on?
● What are some rules of thumb on how to change price?
● What is more important – my own price or my price vs. competition?
● What factors cause some items to be more sensitive to price than others?
Featuring:
Mike Noonan, Managing VP, Global Price & Promotion Practice, Nielsen
Mark Laceky, VP Price & Promotion Practice - North America, Nielsen
Hosted by Jennifer Frighetto, Director Media Relations, Nielsen
http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/how_do_i_approach [6/26/2009 2:50:57 PM]

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/from_hayworth_to_cansino
Home>insights>Consumer Insight>July 2009: Target>From Hayworth to Cansino: Turning the Tides in Latino Movie-Going Find Out More
Sensibilities
From Hayworth to Cansino: Read more about Hispanic viewing

Turning the Tides in Latino Movie-Going Sensibilities patterns. If you are not already a Nielsen
PreView member, you can register for free
and link to the PreView articles.
By: Ruth Behr, Director of Client Consulting and Reny Diaz, Client Solutions Associate, Now You’re Speaking My Language -
The Nielsen Company Consumer Insight, July 2009
CI SUMMARY: Hispanics comprise a growing 15% of today’s American moviegoers and Cinema Advertising Demystified:
amounted to over 128 million of U.S. box office admissions in 2008. Latinos not only Nielsen PreView 2008
represent an opportunity to positively impact overall box office success, but they are an A Guide to Telenovelas: Nielsen
influential segment with the power to build brand awareness. PreView 2008
Moviegoer Quick Facts, June 2009:
Nielsen PreView
Denied her golden ticket to stardom, then obscure Margarita Cansino’s dreams were crushed
when she found herself replaced by blond bombshell Loretta Young as the lead in Fox’s
remake of the 1928 blockbuster Ramona. Cansino’s ethnic name and Latin features had
evidently designated her impractical. It wasn’t until two years later, when Columbia Pictures
changed Rita’s last name to Hayworth and dyed her dark hair to auburn, that she ever stood a Hispanic Facts
chance of being noticed in Hollywood.
- The majority of Hispanics are now online.
Today, the movie industry’s attitudes toward Latinidad
Latinos represent an Internet access among Hispanics has
are quite the contrary: Though Latinos comprise an
been increasing at a faster rate (13%)
exponential 15% of the U.S. population, they represent overwhelming 28% of than it has among total adults (8%) in the
an overwhelming 28% of today’s heavy moviegoers—a today’s heavy U.S. (Scarborough Research)
substantial contribution to any feature film’s box office moviegoers...
success. - Hispanics moviegoers are 63% more
likely to have an account on an online
A growing audience social network that they log onto or update
About 26 million of today’s American moviegoers are Hispanic, most commonly between the at least once a day. (NRG Benchmark
ages of 12 and 34. Almost half of these young Latinos watch 11 or more movies in theaters 2008)
every year, making them 100% more likely than the national average to be considered
“frequent moviegoers”. Half of all Hispanics prefer to see a movie within the first ten days of a - Outdoor advertising is favorably
film’s opening. Understanding Latino consumption and entertainment habits can help studios perceived by 43% of Hispanic moviegoers,
and agencies maximize the success of a feature with this valuable segment of the movie-going making it 18% more likely to be well-
population. received. However, outdoor advertising
should be approached with caution at
sporting events: Hispanic moviegoers’
Language lessons
A family unit supersedes attendance to live sporting events is the
For Hispanics, in-home language preference—
least popular choice of out-of-home leisure
categorized as either English-dominant, Spanish- individual language
activities. (NRG Benchmark 2007)
dominant or bilingual—plays a smaller role in the movie- preference...
going experience than might be expected. While
language differences often exist among Hispanic
families, the ability to participate in an activity as a family
unit supersedes individual language preference.
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Hispanics are 77% more likely to take turns picking films within their movie-going party. For
example, although one-third of Hispanic moviegoers in Spanish-dominant homes see movies
with Spanish dubbing or subtitles in theaters, less than half prefer this format to a standard
English-language experience.
And just as the majority of Spanish-dominants sit through—and presumably enjoy—English-

only films, 18% of their English-dominant counterparts have seen a Spanish-dubbed or
subtitled film in theaters1. The familial bent in Hispanic movie-going translates to greater
instances of ticket and concession purchases per party, as Hispanic households are generally
larger and more extended compared to the average movie-going family.
The main attraction

Hispanics are worth an estimated $1 billion to the U.S. movie industry, representing 30% of
moviegoers who see ten or more summer movies in theaters. Summer is the most important
season for the industry, often accounting for 40% of the year’s box office revenue.

The Family, Horror/Thriller, Romantic Comedy and

Action Adventure genres attract the greatest interest Animated movies cross
2
from Hispanic moviegoers . Family films, in particular, language dominances
provide entertainment that crosses the generation and better than other genres...
language preferences of Hispanic families. This is mainly
evident with attendance to animated movies, as
Hispanics can comprise over one-quarter of these audiences. Animated movies may cross
language dominances better than other genres because not only can they be understood with
varying degrees of English comprehension, but abuela is likely attending with her grandchildren
as well.
Overall, Hispanics command the highest share of audience in the Horror/Thriller and Romantic
Comedy genres. Their highest headcount contributions—in Action Adventure and Family—
correspond to the highest-grossing genres in the U.S. market.
With regard to the 800 million DVD units sold in the U.S. last year, Hispanic households are
24% more likely to purchase them compared to the average American household. In fact,
almost 79% of Hispanic moviegoers bought at least one DVD in 2008.
TV ads engage and captivate

As important contributors of movie-going audiences, Spanish-language
Spanish-language and Hispanic-heavy English networks television is particularly
would be wise to not overlook their fair share of studio effective in targeting
spend. On average, 1.5% of prime-time Spanish Hispanic moviegoers...
broadcast was time-shifted by moviegoers—7% less
than the English-language counterpart’s average. This
trend contributes to the boost in live commercial ratings
for the average Hispanophone program, making Spanish-language television particularly
effective in targeting Hispanic moviegoers.

In addition to spending TV time differently, Hispanic moviegoers also internalize movie

advertising more positively. Almost two-thirds of Hispanic moviegoers consider movie ads on
television as “informative and eye-catching”, making them 7% more likely to think so compared
to the average movie-going population3.
Many Hispanic moviegoers still consider current

amounts of movie advertising on Spanish television as Spanish television
“not enough”. In 2008, movie studios spent an estimated represents an opportunity
$103 million on Spanish-language network and cable to target moviegoers...
television. This amount equates to 3% of reported
spending for the motion picture category—a 13%
increase from 2007 movie spending on Spanish-language TV. For a medium that tends to over-
deliver the moviegoer target, Spanish television represents an opportunity to target moviegoers
who may otherwise be inaccessible.
An analysis of Universal’s Fast and Furious television campaign demonstrates the added reach
Spanish programming can provide. With an opening weekend audience worth $72.5 million—

46% of which was reported Hispanic—the brand tapped Hispanic moviegoers for part of its
success. Fully 11.3% of moviegoers saw spots on Spanish broadcast and cable—almost half
of which would never have been reached with the rest of Universal’s campaign.
But Hispanic moviegoers don’t just watch Spanish television. While Univision elicits 20% of
Hispanic moviegoer’s broadcast and cable viewing minutes, English-broadcast networks ABC,
CBS, the CW, FOX and NBC together command over 15%. Networks ESPN, NICK, TBS, TNT
and USA rule cable for Hispanic moviegoers, comprising 10% combined. English-language
programming often occupies the majority of Hispanic moviegoers’ time spent on broadcast and
ad-supported cable.
Synchronized sensibilities
Considering that Hispanics comprise one-quarter of the most frequent moviegoers,
Hollywood’s reversion from Hayworth back to Cansino is reflective of an era where Hispanic
moviegoers are valued for precisely that which Rita Hayworth felt obliged to alter—cultural
sensibility. Understanding the unique consumption habits of Hispanics will help the movie
industry tailor a portion of its advertising to a box office constituency that can build brand
awareness and success for movie features to come.
Hispanic Facts
● The majority of Hispanics are now online. Internet access among Hispanics has been
increasing at a faster rate (13%) than it has among total adults (8%) in the U.S.
(Scarborough Research)
● Hispanics moviegoers are 63% more likely to have an account on an online social network
that they log onto or update at least once a day. (NRG Benchmark 2008)
● Outdoor advertising is favorably perceived by 43% of Hispanic moviegoers, making it 18%
more likely to be well-received. However, outdoor advertising should be approached with
caution at sporting events: Hispanic moviegoers’ attendance to live sporting events is the
least popular choice of out-of-home leisure activities. (NRG Benchmark 2007)
1 2007 Nielsen NRG moviegoer benchmark.


http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/organized_chaos_global
Home>insights>Consumer Insight>July 2009: Target>Organized Chaos: Global Data Harmonization Related Articles
Organized Chaos: Global Data Harmonization Research Study: Marketers Stink

When it Comes to CRM
By: Joe Palermo, V.P. Global Services Product Leadership, The Nielsen Company Marketers, who spend millions to gain
data about their customers, generally
CI SUMMARY: Think it’s impossible to truly harmonize data from multiple countries, given fail to use it properly, per a new CMO
the variations in barcodes, brand names, packages, products and sizes involved? While Council study.
meeting the challenges of global data differences is daunting, it can be accomplished with a
One-Stop Marketing Solutions
unique combination of local data access, global understanding and a design and For Omnicom Group’s OMD, 2008
implementation plan that delivers action-oriented applications. proved to be a year of redemption after
a difficult 2007, when the agency failed
to capitalize on key opportunities and
Major fast-moving consumer goods manufacturers and learned some painful lessons. In June
retailers are making decisions about their businesses on The data to make 2007, client Dell called a global
a global scale, but the data they use to make their decisions is hardly global creative and media review and invited
decisions is hardly global in nature. In fact, consumer- in nature... holding companies to pitch one-stop
packaged goods data is often derived from multiple marketing solutions
sources of information across as many as 100 countries
in local languages with disparate product and category descriptions and even secondary desk-
top research data included.
Distilling the differences

So what options exist for a global manufacturer or retailer when faced with the reality that data
doesn’t match across countries, divisions, or formats? Technology and applications are
components of harmonization, but not the drivers. In light of the fact that global product
catalogues are rare, coding within company divisions and across countries varies, and product
ownership, manufacturer names and even product uses are not universal, data harmonization
is a process that requires experts with local access and global experience to follow seven key
steps.
Step One: Establish a detailed set of rules

A major obstacle to global data harmonization is the A major obstacle to global
confusion created by multiple product codes, data harmonization is
descriptions, manufacturer names and categorizations. multiple product codes...
With 85% of the EAN (European Article Number) or UPC
(Universal Product Code) codes in local databases
unique to their country of origin, it can be next to
impossible to report on a product’s sales from market-to-market.
Some brands have different owners in different countries, and manufacturer names can differ
across borders. Manufacturers may use terms such as “multi-use” to mean 1- or 2-liter bottles
in one market, but 750mL in another, based on the necessities of manufacturing.
Product usage also varies by market, and some markets describe a product as it physically
appears—not how it is used. Chocolate sprinkles, for example, are used as a topping for cakes
or ice cream in the United States and Belgium, but as a sandwich spread in the Netherlands.
Likewise, compote is a dessert in southern European countries and a meal accompaniment in
northern Europe. Local coders may miss these distinctions since they do not realize that a
product is used differently elsewhere.
http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/organized_chaos_global (1 of 4) [6/26/2009 2:52:02 PM]

The key to overcoming these challenges is establishing a clear set of rules for input coding in
order to collect quality information. These rules must be generic and based on what the product
actually is allowing for de-culturalization, but also must provide sufficient information to allow
flexibility.
Step Two: Avoid ambiguity

The coding structure must be supported with detailed Eliminate the ambiguity
descriptions and definitions—particularly for multi- that results from different
country coding—in order to eliminate the ambiguity that interpretations...
results from different interpretations. In addition, the
coding structure must be in the local language with
careful translations that use terminology understood
within the local business community. For example, there are three words that could mean
“ambient” in Germany: Raumtemperatur, Umgebungstemperatur or Konservierung bei Raum,
but the local Nielsen business uses Kamertemperatuur as the best term for what would be
identified as ”shelf stable” in the United States.
Step Three: Implement a system

Once the detailed definitions are in place, it’s important Mandate only one way of
to mandate only one way of coding any given item. This coding...
enforces the disciplined use of values assigned to
product characteristics and ensures the same values are
used consistently for the same product characteristics across countries.

Step Four: Build in quality checking

The coding system must include additional data for enrichment purposes from a variety of
sources to address data gaps. Multiple approaches can be used, such as allowing copy
facilities from similar products, or enriching centrally by facilitating coding of information which
has not been supplied.
Step Five: Establish a unique product identification

Integral to the success of the global data harmonization Distinguish each product
system is the ability to distinguish each product using a using a set of
set of characteristics and a unique numeric number. characteristics and a
Barcodes and GTIN (Global Trade Identification unique numeric number...
Number) numbers have traditionally served this purpose,
but for a number of reasons they’re not entirely reliable.
Often, the same product is marked with different codes,
or is coded the same as a product in an entirely different category. And in some cases,
promotional packs are given the same barcode as a regularly-packaged product. For example,
the Coca-Cola 330mL regular can has 30 different codes across Belgium, the United Kingdom
and France. To truly harmonize data from multiple sources and locations, a unique
identification number must be created and adopted.
Step Six: Create a global governance organization

Effective data harmonization requires a separate, central Effective data
decision team, with a direct link to local teams with harmonization requires a
experience, product knowledge and cultural separate, central decision
understanding. That central governance team should be team...
independent and consistent in order to manage the
changes that result from product or category evolution.
When new and unique products enter the market, the governance board determines where
they belong. For example, are under-arm absorbency pads deodorants or clothing protectors?
What’s the best way to manage products and categories that are unique to one market, such
as squash and cordials in the United Kingdom or Cuberdons in Belgium? How should unique
packages be handled, such as mayonnaise in plastic bags, offered in Denmark, or pickled eggs
in a jar, from the United Kingdom?

Step Seven: Keep it simple and provide centralized support

As databases can quickly fall out of sync without proper maintenance and updates, the data
harmonization team must consistently assign global codes for new items in the market and a
project manager to perform multiple ongoing tasks, including: ensuring that codes are properly
applied and are consistent across countries; supplying new codes when necessary; resolving
internal and external issues; clarifying borderlines, communicating results and assessing
whether local country changes have impacted the data synchronization as a whole.
Think local, act global

Harmonization is an ongoing process that requires strict governance and constant monitoring.
But when the process is in place and is drawing from both local knowledge and global
expertise, it provides high-quality information and a solid foundation for an integrated
information system.
With extensive, worldwide experience, Nielsen’s global project teams are well versed in the
harmonization process and are uniquely qualified to discern the global needs of both
manufacturers and retailers, providing consistent views that support individualized client needs.
“One size fits all” strategies just don’t work globally. Global harmonization provides the clarity
needed to move beyond data differences toward integrated information that drives better
decisions on a global scale.

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/the_united_states
Home>insights>Consumer Insight>July 2009: Target>Below The Topline: The United States in 2020 - A Very Different Place
Below The Topline: The United States in 2020

A Very Different Place
By: Doug Anderson, SVP, Research & Development, The Nielsen Company
CI SUMMARY: While the World is struggling with the economic hard times of late, the future
poses a new set of challenges that do not stem from arcane financial investments, but from
simple demographics. An aging population, a declining birth rate, and growing ethnic diversity
will change the face and the spending behavior of consumers in the U.S. Gaining share
among population groups that most marketers do not reach today—older and ethnic
consumers—will require shifts in focus, tactics, and products.
The recession of 2007–2009 has placed a great deal of

strain on marketers and retailers of consumer products. Economic hard times to
Price and value have become more and more important, come stem from simple
challenging marketers to rethink product and distribution. demographics...
Everyone just wants things to get back to normal, but will
they? While discretionary spending will return to
moderate levels as markets rebound, the economy of the United States—as well as the rest of
the more developed World—is well on the road to longer-term difficult times. The economic
hard times to come do not stem from the misuse of arcane investment instruments that can
take a degree in calculus to understand, but rather from simple demographics. The emerging
marketplace will be very different than today, and filled with wide-ranging challenges.
Tectonic demographic shifts

Since the early 1970s, birth rates in the United States have been at least 40% lower than at the
heights of the Baby Boom. When a falling birth rate is combined with a very large generation
like the Baby Boom, the effect is a gradual aging of the population. The median age of the
population increases as the large group grows older because there aren’t enough babies being
added to balance them out. For much of the large group’s life cycle, they are typically a boon to
the economy—especially when they reach their prime economic productivity years (usually
from the early 40s into the middle 50s). However, as this large group continues to age, they
stop being an economic asset and begin to become a burden—as the Baby Boom generation
will become over the next several decades.
Aging populations place stress on an economy in two

ways. First, if the generation is sufficiently large, Aging populations place
retirement can lower the size of the labor force— stress on an economy in
particularly its most skilled and most experienced two ways...
component—lowering overall economic productivity.
Starting in the next two years until 2030, the number of
persons who reach the retirement age of 66 will increase by over 100,000 each year
throughout the Baby Boom retirement years. For many of the early years in that period, the
number of persons who reach the age of 19 and enter the labor force will actually decline by
more than 40,000 per year for the next decade.
The second impact of an aging population is perhaps larger—the costs incurred by society to
care for a large number of retirees. Social Security will begin to run at a deficit in about eight
years and will deplete its trust fund by 2041 unless changes are made now. At that point,
money coming into the program would only cover about 70% of the money paid out each year.
Medicare and Medicaid will deplete their trust funds in only about ten years and will be the
largest component of all U.S. government spending by 2030.
Additionally, many private pension plans are currently under-funded, and given the current
economic difficulties, may not have time to recover adding more people to the public dole. The
Baby Boom generation has suffered a disproportionate share of the $11 trillion in lost market
equity and $3 trillion in lost real estate value from the current recession and they will find it near
impossible to retire and sustain their current standard of living—particularly the 38% who will
be eligible to retire in the next ten years.
http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/the_united_states (1 of 4) [6/26/2009 2:52:30 PM]

Future impacts
Nielsen created a set of long-term demographic and economic projections that model the
potential impacts of the aging U.S. population. The projections make use of five groups of
households (Struggling, Lower Mid, Upper Mid, Affluent and Wealthy), each accounting for
20% of total, using an income-to-poverty ratio.
Households in the Struggling group have incomes that are no more than 1.5 times the poverty
threshold. For a single-person household under the age of 65, this equates to having a yearly
income less than $15,732. For a six-person family with four children, this means having a
yearly income less than $40,407. All together, the Struggling group has a median income of
$12,201.
From now until 2020, the projections show that the Struggling and Lower Mid groups will be the
only ones to gain share, with the Struggling group growing by over 10%. The lower affluence
groups will grow at the expense of all other groups. By 2050, the projections show that the
Struggling group will have grown in size by nearly 70%, pulling households from all other
affluence groups—particularly those in the middle.
For families with children, the growth in Struggling households will be even stronger. By 2050,
nearly one-third of all families are expected to fall within the Struggling group. In the same
timeframe, nearly 40% of all households whose household head is over the age of 65 are

expected to fall into the Struggling group.
A shrinking pie
As the Baby Boom ages, and birth rates remain low, The U.S. will experience
household sizes will decrease. Many aging Boomers will very minor growth in per
live alone or with one other person. The number of household spending...
children per family will get smaller. Add in growth in the
most economically-disadvantaged market segments,
and pressures on per capita spending will be like nothing
the U.S. has experienced in modern times. Between now and 2020, the U.S. will experience
very minor growth in per household spending. But after that, spending on consumer products is
expected to fall—and will continue to fall throughout the projection period in constant dollars.
Marketers in the U.S. and throughout the World are not accustomed to a shrinking pie, but
rather are used to thriving marketplaces with robust spending growth. Broad marketplace
growth enabled brands and categories to grow organically without increasing penetration or
buying rate. In the near future— and for decades to come—this growth gravy train will be off
the tracks. Growth will only come from increasing share against competition. The new
consumer marketplace of the U.S. will bring new relevance to the phrase “share wars”.
Opportunity knocks
Over the next four decades, the old U.S. consumer mass marketplace will continue to split into
distinct groups with very different product needs. By 2037, nearly one in three households will
be headed by a person over the age of 65. Of these households, nearly three-quarters will be
non-Hispanic white, nearly half will be single persons, and the majority of persons in the 65+
age range will be women. Despite their economic woes, the Baby Boom will still be a strong
consumer market and will provide substantial opportunity for marketers willing to design and
market products to an older consumer franchise.
On the other side of the divide will be America’s new

families. Because birth rates are low, these new families By 2025, over half of all
will be smaller on average than those who have come families with children will
before. However, their most distinguishing characteristic be multi-cultural...
will be their ethnic and racial makeup. In only a few short
years, by at least 2025, over half of all families with
children will be multi-cultural. Less than half will be native born non-Hispanic white. Within this
multicultural marketplace, Hispanics will be the largest group, but Asians, African and
Caribbean blacks, and others will make up significant shares. Though also beset by economic
woes, this group will provide substantial opportunity, but only for marketers who can navigate
diverse cultures, tastes, and languages.

The future of the U.S. is a challenging one for marketers and retailers of consumer products.
Gaining share among population groups that most marketers do not reach today will require
shifts in focus, tactics, and products. Successfully reaching new markets like multi-cultural
families offers a new set of opportunities. The breakdown of the mass market and the mass
media that once served it, combined with certain economic difficulties, will make for challenging
new times ahead.

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Home>insights>Consumer Insight>July 2009: Target Print This Issue

Consumer Insight: July 2009

Role Reversal – Mr. Mom Goes Shopping.

Auto Industry’s Wild Ride is Getting Smoother.

Now You’re Speaking My Language.

Cost-Savings Innovation in a Downturn.

From Hayworth to Cansino: Turning the Tides in Latino Movie-

Organized Chaos: Global Data Harmonization.

© 2009 The Nielsen Company. All Rights Reserved.

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009 [6/26/2009 2:45:53 PM]

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/role_reversal_mr_mom (1 of 6) [6/26/2009 2:46:59 PM]

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/role_reversal_mr_mom (2 of 6) [6/26/2009 2:46:59 PM]

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/role_reversal_mr_mom (3 of 6) [6/26/2009 2:46:59 PM]

Not just beer and brawn

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/role_reversal_mr_mom (4 of 6) [6/26/2009 2:46:59 PM]

● Men’s External Breathing Aids (61%)

Impact on media strategy

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/role_reversal_mr_mom (5 of 6) [6/26/2009 2:46:59 PM]

Contact us to learn more.

© 2009 The Nielsen Company. All Rights Reserved.

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/role_reversal_mr_mom (6 of 6) [6/26/2009 2:46:59 PM]

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/auto_industry_wild (1 of 5) [6/26/2009 2:47:44 PM]

April 2009. Volkswagen leapfrogged seven spots from

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/auto_industry_wild (2 of 5) [6/26/2009 2:47:44 PM]

Setting your sites

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/auto_industry_wild (3 of 5) [6/26/2009 2:47:44 PM]

the site, virtual experiences, testimonials and incentives.

While 86% of online shoppers rely on third party sites for

Video streaming is playing out across the computer

Following a classic advertising paradigm, exposures

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/auto_industry_wild (4 of 5) [6/26/2009 2:47:44 PM]

Listen and learn

Contact us to learn more.

© 2009 The Nielsen Company. All Rights Reserved.

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/auto_industry_wild (5 of 5) [6/26/2009 2:47:44 PM]

Now You’re Speaking My Language View the most memorable TV

Putting on Brave Faces

Together, advertiser spending within the Top 10 Spanish-language product categories

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/now_youre_speaking (1 of 5) [6/26/2009 2:48:19 PM]

adult 18-49 primetime audience demographic (based on Live+7).

Reach and cost considerations aside, research shows

But that doesn’t account for one of the most powerful

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/now_youre_speaking (2 of 5) [6/26/2009 2:48:19 PM]

points of difference: likeability, a key ad effectiveness

And the power of language becomes even more evident

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/now_youre_speaking (3 of 5) [6/26/2009 2:48:19 PM]

Nielsen reports that Latinos who are online are more

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/now_youre_speaking (4 of 5) [6/26/2009 2:48:19 PM]

Contact us to learn more.

© 2009 The Nielsen Company. All Rights Reserved.

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/now_youre_speaking (5 of 5) [6/26/2009 2:48:19 PM]

Home>insights>Consumer Insight>July 2009: Target>Cost-Savings Innovation in a Downturn Find Out More

Cost Savings Innovation in a Downturn How Do I Approach Pricing in this

Downsizing the package size Downsizing and

http://en-us.nielsen.com/main/insights/consumer_insight/July_2009/cost_savings_innovation (1 of 4) [6/26/2009 2:48:57 PM]

Additionally, Nielsen analyses have shown that

● The manufacturer is a significant market share leader within the category.

Upsizing the package size

There are a few key stumbling blocks to a successful

Changing the packaging

Similar to shifting away from a more expensive