Developing a Pareto based market model, using Internet-based research, and repositioning the brand

Experience with Masterfoods (FMCG) and Pitney Bowes (B2B)

I have recently been involved in two client projects where we were able to develop a market model based on new consumer insights, applying Pareto modelling (80/20 rule), that is capable of revolutionising the business plan and integrated marketing communications.

Finding the sweet spot

In the first of these, I collaborated with partner agency KB49 to work with one of the Masterfoods/Mars confectionery brands. Their problem was: why is the brand not doing better, and does it have a future? They wanted us to do a strategic planning review.

What we did first is review all of the research before and since launch and correlate this against actual sales results by distribution channel and region. We were also able to collect limited data from a Masterfoods panel (because the brand is relatively small in the Mars portfolio the data was weak). Just doing that was a breakthrough: it is very rare for anybody to have the time or take the trouble to look at such a body of research. But we found very important nuggets that had been overlooked and then forgotten. With some very limited one-on-one research I developed the hypothesis that the brand was incorrectly positioned. Basically, it was a classic example of modern marketing's love of young people. So since launch, the brand had been targeting 18 to 35-year-old males and females, and concentrating on 18 to 24-year-olds. It did not look like that was who was really most likely to enjoy the product.

To check our hypothesis we used Internet research working in partnership with SSI. Normally, the research would have been done by the roster research agency, but doing it on the Internet meant that we could turn around the results in less than a week, and cheaply, and moreover, we were easily able to reach those hard to find consumers who were actually relatively loyal heavy users. Question was: who is really consuming the brand? Where is the volume really coming from?

The results were surprising (for the brand), fully confirming the hypothesis. After we normalised the data to match national profile, most of the volume was coming from 40 plus older males, with a bull's-eye target of mid-40s to mid-50s and another special interest group. So instead of young trendy 24-year-old men and women we were dealing with mature, relatively conservative males, often drivers. Furthermore, their reason to buy had only a limited connection to brand claims at and since launch. That gave us a complete new concept for the brand, which rescued it from being killed. The next step was to take what was already smart and make it really powerful by optimising planning.

To do that I led a project to pull together all the data we knew and built a complex spreadsheet model of the marketplace. It related factors including the economics of production, penetration of distribution channels, cost of media by audience and communication method and conversion and loyalty rates in order to be able to predict the future of the brand based on alternative investment scenarios, justifiably making the brand manager a hero since it took planning in the corporation to a new stage. this provided a scenario modelling tool for optimisation of budgets and channels.

Quick delivery

In the second case, I lead a project working with Pitney Bowes, a global leader in mailroom technology. In this case, we were looking at understanding the European market for software to manage multiple carriers (Fed Ex, TNT, Royal Mail etc). It turns out that most larger companies have several carriers and couriers for different shipping applications and some more than a dozen. It also turns out that you can save a lot of money by managing it in an optimised way and that for any company into supply chain management and/or customer service, this is a great application. The primary questions were, how many companies could benefit, how do users get the benefits, what is the scale of benefit (ROI), and therefore what is the business opportunity for a stratified series of solutions? Secondly, the research wanted to get a state of the nation report for potential users proving benefit and attitudes from existing users.

Again, following a period of secondary desk research, I turned to the Internet to do the research, launching the largest market research project in the category in Europe to date. Once again, the Internet gave us a chance to reach difficult people and turn round the results quickly. Notice, this is a business-to-business research project but working with SSI we were able to get effective panels (which we subsequently normalised) to give us the result we needed. If you want to see the research report that I subsequently published (and this is just a blatant promotion to get you to look at the details of a research report we are rather proud of). You can find it on this link.

The research was designed not only to answer some questions about benefits, suppliers, usage profiles and so on, but also to be to develop a sophisticated planning model, again using Pareto-type analysis to segment and analyse the market. Using this, we were able to size not only the market but do scenario planning of projected business levels for Pitney Bowes, as well as identifying an optimum positioning and product development strategy.

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