NEW YORK -- Kraft General Foods is using a synthesis of demographics with other market and brand data to accurately estimate brand sales and target promotions at the store level.
"We found that demographic characteristics were a significant indicator of store sales. But by including the store and market characteristics with the demographic factors, we were able to significantly improve the predictions of what the store sales were," said Richard Haffner, manager of market research for KGF's beverage division, White Plains, N.Y.
Armed with that information, the field sales force has been able to plan relevant promotions accordingly and concentrate its efforts where they are most warranted, said Haffner, who spoke at "Measuring, Analyzing & Assessing Promotions," a conference sponsored here by Marketing Advisory Council, Upper Montclair, N.J.
Panel data from Nielsen Marketing Research, Northbrook, Ill., and demographic, lifestyle and life stage information from Spectra Marketing Systems, Chicago, were combined with a nationally syndicated sample of 3,000 stores and the input of the field force. Haffner said the company was able to use that data to develop projections for the rest of the 30,000 stores in the universe.
Using a specialized computer program, KGF analyzed five factors affecting store sales: brand demographics, trade area demographics, store characteristics, market characteristics and merchandising practices.
The company tested the targeting program on five brands: two "upscale," two "downscale" and one with "all-family appeal." Haffner found that only one brand was being well marketed. That effort was solely due to a push from headquarters. The other four brands were not especially well targeted and, consequently, the stores' promotions were not well-suited to their sales potential.
"We want to talk about those stores that have high potential, medium potential and low potential and then target activities along those lines. We gave [the field sales force] rough rules of thumb on how they could target store-customizable activities. Or, where they had store tactics available to them, this gave them the stores they wanted to concentrate on, vs. the stores they didn't want to pay attention to," Haffner said.
The goal was not only to leverage the existing customer base, but to develop new business opportunities and mobilize the marketing and sales departments to take advantage of them. The key, Haffner said, is to make targeted approaches the plan, not a portion of the overall marketing agenda.
Although this process may result in initial increases in volume and distribution, Haffner cautioned that it may be a one-time phenomenon. To continually improve targeting capabilities, daily scanner data and information gleaned from frequent shopper cards will be useful resources in the future, he said.