Homescan: CPS Module 2

Homescan
CPS Module 2
Confidential & Proprietary • Copyright © 2007 The Nielsen Company

Homescan
CPS Module 2:
Page 2 Confidential & Proprietary
Homescan Copyright © 2007 The Nielsen Company
Topics Covered
> What is Homescan?

> Methodology
> 5 steps of continuous tracking
> Output
CPS Module 2:
What is Homescan?
CPS Module 2:
What is Nielsen | Homescan® ?
• The essential marketing

tool to provide unique,
insightful and actionable
diagnostic information on
consumer purchasing
behavior
• The information will tell
you
– How many households buy?
– What do they buy?
– Where do they buy?
– How much do they buy?
– How often do they buy?
– Who buys?
CPS Module 2:
Why Nielsen | Homescan® ?
Do you know the driving force behind your brand sales?
Sales Scan Data
Consumer
Panel
Data
How many shoppers? How often? Spend per trip?
What strategies and tactics can I employ to change these dynamics?
ATTRACT NEW BUYERS

GENERATE REPEAT SALES DRIVE SPEND IN STORE
Pricing/discount
Next purchase discount Larger packs / Multi-buys
Wider range
Loyalty cards Premium brands
More brands/variants
Promote consumption Merchandising
Exclusive lines
Build brand equity Improved facings/position
Alternative uses
CPS Module 2:
Methodology
CPS Module 2:
The 5 Steps of Continuous Tracking
CPS & RMS main
steps are the
MSci
5 same!
Analysis & Interpretation

4
Statistical expansion
3 …of sample to universe
Data collection
2 Establish best method of data capture
Design a representative sample
1 How many of each demographic target do we need to
represent the universe with a desired margin of error?
Establish the Universe
Define universe and gain information on demographic targets
CPS Module 2:
1) Establish the
Universe
CPS Module 2:
1) Universe Definition
Who?
> We are seeking to represent all Private ‘Households’.
A private household is a person or group of persons sleeping in the
same housing unit who…
 have a common arrangement for preparing & consuming food
 have a fixed place of residence
 not necessarily a family
> Excludes:
 Businesses; Guest houses; Student Houses
 Armed Forces
 Institutions; Associations
CPS Module 2:
What?
> Homescan is designed primarily to monitor purchasing of
FMCG products.
> For use/consumption in their home or as a gift for someone else
> Exclude products that are consumed outside of home
> Includes: Bar-coded & Non Bar-coded items
Bar-coded Non Bar-coded
• Foodstuffs > Dairy Products
• Confectionery > Fruit & Vegetables
• Beverages > Bakery Products
• Toiletries > Meat, Fish & Poultry
• Baby Products > Savoury Products
• Pet Foods & Accessories > Tea
• Household Cleaners & Products > Flowers & Houseplants
> Record total till spend (allows us to see level of non-food purchasing
through the major retailers)
CPS Module 2:
Where? – Outlet Coverage
> Supermarkets / Grocers

> Other Large Stores / Department Stores
> Door Step Deliveries
> E.g. Milkman, Mobile Shop
> Freezer Centres
> Butchers / Bakers
> Petrol Station Forecourt Shops
> Chemist / Drugstore
> Off Licences
> Other Outlets E.g. Newsagent, Market Stall
> Internet Purchases E.g. Home Shopping
CPS Module 2:
How to measure universe
• Household Universe facts can be obtained from
– Country Population Census
– Government Statistical Agency Population Estimates
– Nielsen Household Establishment Survey
• Nielsen Household Establishment Survey (HES)
– provides Universe Estimates and a pool of households with known
characteristics for panel recruitment
– provides estimates on selected demographic variables not available from
official or other reliable external sources at the required level of detail,
accuracy and freshness
– Ideally, HES should be conducted on an annual basis
CPS Module 2:
Universe Update
• There must be a regular procedure to update the households
universe estimates required for the projection of the CPS data
– provides accurate and opportune tracking of the geographic and
demographic trends of the household population
– more accurate and timely tracking of the market events and the response
of consumers to these events
– assurance that the universe continues to be representative of their
markets, providing relevant information about the market events
CPS Module 2:
2) Design & Recruit
the Sample
CPS Module 2:
2) Sample Design
Stratification
• Panel is stratified by household characteristics that have
a strong relationship with household purchasing
behaviour
• Within these characteristics, households will have
significant differences in purchasing behaviour
– difference may be the amount purchased
– the more people in a household the more purchased
– difference may be the items purchased
– higher income households purchase more premium brands
CPS Module 2:
2) Sample Design
Stratification
• Common stratification variables are
– Geographical areas and/or cities to be reported
– Socio-economic level
– Household Size
– Presence of Children
– Age of Household Head
– Lifestage
– Combination of household size, age of adults and age of children
CPS Module 2:
2) Sample Design
Allocation
Proportional Allocation - same proportion as universe, preferred method
Disproportionate Allocation – may be used for more important or less
important household demographics or harder to recruit, meaning more
costly demographics
100%
30 30 32
80%
60%
50 50 53
40%
20%
20 20 15
0%
Universe % Proportional Disproportionate
Allocation Allocation
Household Size 1-2 Household Size 3-4 Household Size 5+
CPS Module 2:
2) Sample Design
Stratification and Allocation

• A proper stratification and allocation of the household
sample allows
– better representation of the differences in purchasing patterns
among segments of the target population
– reduce the sample variability and thus increase the accuracy of
the estimates obtained from the sample
– control and reduce the biases associated with different
collaboration rates among different household types
– ensure specific segments of the population are represented with a
large enough sample to achieve the required level of accuracy
CPS Module 2:
2A) Recruit Sample
Sample Recruitment Process
> Interest in joining panel established
> Registration pack dispatched
> The ‘main purchase decision-maker’ is recruited
> The person mainly responsible for the household shopping
> Households matched against panel requirements
> Selected or Rejected (‘On-Hold’)
> Kit box dispatched 2 – 3 weeks later
> Fact Finders file
> Shop survey
> Wand (Hand Held Scanner) & Base Unit (Modem) – For Homescan
> Printed diary forms – For Homepanel
> Sign up gift dispatched 8 weeks after kit
CPS Module 2:
2A) Recruit Sample
Training & Eligibility
> Contacted by Panel Management Team
> Telephone call within first 3 weeks
> Review practice sessions
> Kit Connection
> Any other queries
> Eligibility for Panel Member ‘sign off’
> Set criteria for ‘signing-off’ the Panel Members from ‘on-hold’ to
‘eligible to report’.
> 8 weeks before household reporting is added to the panel
CPS Module 2:
What’s in it for the Panel Member?
Motivations Incentives
• “Scanning is a way of • Joining gift

registering your opinion,
making yourself heard". • Monthly Points credit
Redeemable against Gifts
• “It's like doing voluntary
work, it's doing something • Monthly Prize Draw and
which makes life easier for annual car draw
other people".
• Chance to win additional
• “It's no good moaning about points for additional work e.g.
something if you are not Surveys
willing to give somebody
your views”. • Monthly Newsletter - Fact
Finders Post
CPS Module 2:
Panel Communications
> Monthly
> Newsletter, Reward Points Statement
> Annually
> Christmas Calendar, Panel Check, Blue Generic Store Card
> On ad-hoc basis (could be 5 times a year in some case)
> Survey
> As required
> Letters, Surveys, Messages
> Help Desk
> Fact Finders Help Line
> Primary Contact for Panel Members
> Free phone Number
CPS Module 2:
Panel Maintenance – Demographic Balancing
> The Panel Mangement team is responsible for:
> Monitoring the composition of the sample against design

targets
> Maintaining up to date records of household demographics

> Demographic profile of existing panel members is monitored by:-
> Annual Panel Check Survey
> Monthly Points Statement
> Tear off slip for demographic update
CPS Module 2:
3) Collect the Data
CPS Module 2:
3) Data Collection
> Panel Members record their grocery purchasing on return
from a shopping trip using hand held barcode scanners
installed in their home.
> Information recorded includes:-

> Date of shopping trip
> Store used
> Item bought
> Price per pack
> Quantity bought
> Whether the item was on offer
> Panelists home polled weekly

> Midnight on Saturday
CPS Module 2:
3) Data Collection – Standard Scanning Sequence
Do you want to
answer a Survey ? Attitudes
Do you want to enter
shopping trip ?
Date of
shopping trip ? Behaviour
Please scan
store code
Receipt total?
Any bar-coded
items?
Scan barcode
Scan offer
Price on receipt
Enter quantity
CPS Module 2:
Confidential & Proprietary
4) Statistical
Expansion
CPS Module 2:
4) Usability
> Criteria applied to all panelists for inclusion in reports
> Applied at two levels

> Expenditure
> ‘Valid’ weeks
> New recruits not eligible until 8 weeks run-in period
CPS Module 2:
4) Expansion
• The purchase data provided by the panel households

must be projected to the Household population
CPS Module 2:
4) Expansion
Expansion process
• Calmar / IPF on socio-demo margins is most commonly used approach but
there are also cases of cell-based expansion
– In order for the final projected panel to more closely resemble the population, the
households are weighted to the number of households in the population.
– Each control variable must have a known Universe of Households
– The weighting process ensures that the sum of household weights is equal to the
Universe number of households for each control variable
– Often, control variables are the socio-demographic characteristics used for
stratification
• In some countries, RMS data are used to define further calibration targets
(either explicitly, or through adjustments aimed at reconciling retailer market
shares)
– Requires a second round of calibration
CPS Module 2:
Confidential & Proprietary
4) Expansion
Why we need to do expansion?
• Use of projection factors means that the reported results provide an

accurate representation of the purchasing behaviour of the
household universe
• Proper calculation of the projection factors allows the sampling error
to be within acceptable limits
• To a certain extent, projection factors will compensate for imbalances
in the sample, or incomplete response from panel homes to purchase
recording
CPS Module 2:
4) Validation
> Data validation is a continuous process and takes place
> Daily
> Weekly
> 4 Weekly
> Automated system checks & Manual validation
> Price Validation
> Shop Product – Own Label wrongly assigned
> Shop Area
> Quantity
> ‘Mismatches’
> Extreme Purchase or Outlier validation
> These checks occur before data processing
CPS Module 2:
Thank you
CPS Module 2:
Homescan Copyright
Confidential & Proprietary • Copyright © 2007
© 2007 TheThe NielsenCompany
Nielsen Company

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Homescan

Confidential & Proprietary • Copyright © 2007 The Nielsen Company

> What is Homescan?

• The essential marketing

Sales Scan Data

What strategies and tactics can I employ to change these dynamics?

ATTRACT NEW BUYERS

Analysis & Interpretation

Where? – Outlet Coverage

> Supermarkets / Grocers

Household Size 1-2 Household Size 3-4 Household Size 5+

Stratification and Allocation

• “Scanning is a way of • Joining gift

> The Panel Mangement team is responsible for:

> Monitoring the composition of the sample against design

> Maintaining up to date records of household demographics

> Information recorded includes:-

> Panelists home polled weekly

> Criteria applied to all panelists for inclusion in reports

> Applied at two levels

> New recruits not eligible until 8 weeks run-in period

• The purchase data provided by the panel households

Why we need to do expansion?

• Use of projection factors means that the reported results provide an

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