Part 2: PROCESSES 273

Chapter 9

Consumer panels
Denis Delmas
Dominique Levy

The word 'panel' describes a continuous collection of identical information

from a sample which represents a segment of a population to study. It is by
definition permanent and repetitive. There are as many varieties of panels as
there are different populations and methods for measuring them. The research
objective must determine which population will be studied and the nature of
the information collected. For example, we can have doctor panels which
measure their prescription orders, user panels which measure specific products
or services, measures of the media audience and of course shop panels.
In this chapter, we will take a particular interest in those studies generally
known as consumer panels. Their objective is to specifically record the
everyday purchases of different households. These panels were developed
many years ago (since 1948 in the United Kingdom, 1962 in France) in most
developed countries and are part of the basic tool kit for professionals working
in marketing research and the marketing of mass-consumption products. They
are syndicated studies, covering a large number of products and/ or services,
the results of which are shared between all the players within a given market.
This characteristic of covering many customers and many product categories
is basic to the very idea of a panel. Effectively, the need to cover several
categories requires the building of a general sample which is as large as
possible, and the multiplicity of clients makes possible a substantial
investment, since it is divided between them.
To start with, we will take a look at the organisation of consumer panels. We
will describe the different steps, explaining for each of them the difficulties to
be resolved, the different methods in use and their major consequences.
Next, we will concentrate on the analysis of the information collected from the
panels. If their main purpose is to measure markets, consumer panels both
274 Denis Delmas, Dominique Levy

enable understanding of these markets through the reading of a number of

indicators, and provide answers to specific questions about markets or brands.

THE MAJOR STEPS FOR THE CREATION OF A CONSUMER PANEL

The essential preliminary to setting up any consumer panel is the definition of
its objective (e.g. to record the food consumption of individuals aged 15 years
and older). It is only the definition of that objective that will enable us to
choose which population needs to be audited, what size the sample should be,
the nature and frequency of the information to be collected and the most
appropriate method of data collection. The 'syndicated' aspect of the panels,
which we mentioned in the introduction, leads to a double requirement of
objectivity: representativeness and generality. It is necessary to audit the
consumption of the largest possible number of people, using methods adapted
to the largest number of possible categories.
Following this reasoning, we may list the different choices made at each step
in the creation of a panel. These stages are as follows:
1. to define and measure the population to study
2. to determine the ideal sample
3. to set up the actual sample
4. to manage and maintain the sample
5. to determine the method for collecting information
6. to specify the nature of the collected information
7. to carry out specific validation checks on the data before proceeding to
analysis.

To define and measure the population to study

The principal quality required from a consumer panel is its representativeness.
Therefore, we need to specify what we want to represent. This requires
definition of the nature and the statistical unit that we will consider (will it be
a household panel, individuals, men, women?) and the limits of the universe
that will be covered (geographical boundaries, exclusion of certain kinds of
households or individuals, etc.).
In the great majority of cases, so-called 'consumer' panels are really
household panels (even though individual panels do exist). The term
'household' is usually defined as 'a group of persons living in the same
accommodation, occupied as their main residence' (this example is the
definition adopted in France for the INSEE; similar definitions are used in
many other countries). Since the objective is to measure the 'normal'
consumption of households (most often by tracking their purchases), we
generally accommodate that definition by excluding certain groups whose
behaviours are considered to be specific and not comparable with the
 Consumer panels 275

behaviour of "ordinary" households (e.g. religious communities, army,

prisons, retirement houses, boarding schools, etc.).
To this first limitation of the population that will constitute th~ panel are added
geographical boundaries, intended to enclose precisely the domain for the
coverage of the panel. For example, a panel of Spanish consumers will offer a
coverage of the national territory, including the Balearic islands, but excluding
the Canaries and the enclaves of Ceuta and Mellilla, zones in which, for
geographical and financial reasons, consumption is not comparable with that
of the Spanish population as a whole. For the same types of reasons, French
panels will exclude the Outre Mer territories and British panels will not cover
the Channel Islands. There may also be other exclusions, for economic or
logistical reasons. We will refer to these later.
Once the universe for the study has been defined, in terms of its nature and
boundaries, it is necessary to quantify and describe it.
The population is described in terms of objective criteria which will allow it to
be segmented and will later serve for structuring the sample. These criteria
should be a priori discriminators of the overall consumption of households,
but also as independent as possible of the measurements that will later be
used. The panel has to retain its objectivity as well as its coverage of many
categories; it is not permissible to stratify the universe in terms of elements
linked a priori to the consumption of this or that type of products (for example
the presence of a pet in the household). The description and segmentation of
the population is generally carried out in accordance with the most common
demographic characteristics, which are:
o the region in which the residence is located
o the type of environment (e.g. rural, small, medium or large towns)
o the age of the head of household or the housewife
o the number of people living in the household
o the number of children and their ages
o socio-economic group, in terms of income and/or head of household
occupation.

Depending on the particular situation of the countries being studied, other

important characteristics may also be used (for example, belonging to an
ethnic group in some countries).
This description of the population must be established before the construction
of the sample, and then must be updated regularly so that the panel can
maintain its representativeness over time. The question then arises, what
sources of information are available, about either a specific country or an
entire geographic zone?
276 Denis Delmas, Dominique Levy

The quality of these sources varies enormously according to the level of

development of the country concerned. In the developed countries, censuses
of population are generally conducted by the government, or partial access to
files, fiscal year files or others is possible. For developing countries, however,
obtaining knowledge of the universe to be studied is often a severe problem
and can generate considerable extra costs (if the institute conducts a
preliminary survey) or can lead to a deliberate limitation of the panel to known
populations.

To determine the ideal sample

Designing a sample requires the definition of three things:
o its size
o its structure, that is, its sub-division into cells
o a sampling plan.

The optimum size of a sample is the result of a compromise between the

accuracy expected and the cost of subscription to the panel supposed
acceptable for the advertisers. In fact, after a certain level is passed
(determined as a function of the effective population total), the gain in
precision arising from even a substantial increase in the sample is marginal.
The level of accuracy expected is calculated according to the nature of the
product classes for which we want to record consumption (the larger the
sample, the greater the number of markets which can be audited) and the
precision of the analyses that we wish to achieve. A large number of the
special analyses we might consider are possible only if a sufficient number of
observations (and indeed of panel members) are available. The actual sizes of
known samples range, according to the country, between three and fifteen
thousand households.

To structure the sample, we make use of the descriptive criteria for the
population mentioned in the previous paragraph. First, the principal
segmentation criteria are selected on which it is planned to stratify the
universe (for example region x type of residence x number of people in the
household). In this way cells are defined with known content. This determines
the segmentation of the sample. Each panel member recruited will correspond
to a designated cell. We then decide on the secondary criteria, i.e. those
characteristics of the population in question that we want the sample to
represent (children, age of the head of household, socio-economic group).
The last step in designing the sample is the sampling plan. Once the total
sample is divided into cells, the ideal number of panel members in each cell is
determined, generally with the use of a quota method. The average sampling
fraction is the ratio between the total population and the number of households
in the sample.
 Consumer panels 277

This last stage results in an accurate description of the households to be

recruited to the panel. The number of households of each type required to
construct the ideal sample (a type being the result of combining the
characteristics) will be known.

Setting up the actual sample

Once the ideal constitution of the sample is determined, we may proceed to the
effective recruitment of panel members, most often by random selection. At
this stage some important differences can appear between theory and reality.
A number of problems may arise.
The first and most frequent problem concerns populations that are difficult or
impossible to recruit to a panel. So, from the start, it will be necessary to
exclude from the sample illiterate populations, populations which do not have
telephones (whenever a method is to be used which depends on transmitting
data by telephone) or populations beyond the reach of a postal service (when a
postal survey is to be used). We have to make the assumption that these
excluded households have similar behaviour to those that will be effectively
recruited to the panel. Weare thus introducing a bias which is difficult to
estimate, which will be more important the more numerous the populations to
be excluded.
Another type of problem occurs at the level of the actual recruitment. In
theory, random selection is used, door-to-door. In reality, for cultural reasons
(in certain countries, door-to-door calling is very badly perceived), or for
reasons of cost, pre-recruitment by telephone or postal means may be used.
Several questions may arise. What bias are these methods introducing? Does
the use of a data file in the case of pre-recruitment by post, for example,
change the nature of the contacted households? It is also known that some
types of households are, for various reasons, more difficult to recruit to a
panel than others (refusal rates are higher at the time of recruitment).
Classically, working women, bachelors, and elderly people are more difficult
to recruit (and to keep in the sample).
Once the actual sample is set up, we apply to each household in the panel a
weighting (or extrapolation) coefficient, calculated according to the weight of
the cell to which it belongs in the total universe, and to the number of
recruited panel members occupying this cell. Because of the natural renewal
of the sample (see next paragraph), the weight given to each panel member
will change from one period to another and according to the total duration of
the study period in question.

To manage and maintain the sample

As previously mentioned, one of the fundamental principles of panels is their
continuing character (i.e. the periodical repetition of the same measurements
on a sample kept as stable as possible). Their quality, as well as the possibility
278 Denis Delmas, Dominique Levy

of carrying out specific analyses covering long periods or comparisons

between periods, are strongly dependant on minimising the fraction of the
sample which has to be renewed (a fraction of around 20% per year is
generally considered as acceptable) and on the regularity with which the
households in the panel co-operate. Research institutes devote considerable
energy to encouraging the panel members to collaborate effectively on the one
hand, and to controlling the effective quality of their contribution on the other.
To generate loyalty among the panel members, to maintain the regularity and
quality of their answers, and to reward them for their participation, the
institutes set up mechanisms for incentivising the sample. These are usually
composed of:
o an assistance element (a programme of telephone answers to those panel
members who have questions on the form of their collaboration)
o a communication element (panel members' magazine, messages on the
purchase booklet or transmitted by the home scanner)
o a reward element (accumulation of points giving a right to gifts,
participation in lotteries), and
o an element for control and stimulation (when co-operation is incomplete or
imperfect).

These mechanisms vary, of course, according to the method used for

collecting data and the cultural features of the country concerned. Clearly, the
actual nature of the methodology used (whether it is more or less fatiguing
and/or more or less complicated) will have the most important effect on the
loyalty of panel members and on the quality of their collaboration (see the
point which follows).
Encouraging the panel is particularly crucial at the start of the collaboration of
a panel member. It is during the three first months following recruitment that
the highest proportions of deserters occur. Panel members who survive this
critical period of time present a good probability of a satisfactory 'lifetime'.
These practices are undoubtedly expensive, and maintaining the sample
represents an important section in the budget of a panel, but it is essential to its
quality.
Inciting the panelllem,)C1S to he regular is not a guarantee for the quality of
the data. Mf'~L.<·'1i'IDS are therefore also put in place to control the quality of
their collabora~.· T!lese consis' ab~lve all of checking the regularity of their
returns, that is (..:m paring the number of communications actually made by the
panel household 'vith the number (f 'recoveries' expected. When there is
unjustified failure )f communication ).e. no explanation for a gap signalled to
the institute) tl . rst step is to attempt stimulation, and then, if the failure
persists, the pai nember is excluded from participation. Care is also taken to
locate inconsistcl1cies within the panel records (e.g. a household with a baby
not mentioning buying milk, the total absence of consumption for categories
 Consumer panels 279

considered as basics). There again, the detection of an inconsistency will

provoke a call to the panel member to obtain confirmation of the doubtful
information and to check that it has not been the result of forgetfulness or
failure to understand the instructions correctly.
From these different methods of control, we can calculate a general quality
'index' for a panel member, for each period of time considered. If, for a given
period, the index is too low, the household will be excluded from the sample
used to produce results for that period.
The composition of the sample varies from one period to another (because of
natural renewal and temporary exclusions of unsatisfactory panel members),
and it becomes necessary to calculate a new weight for extrapolation specific
to each member of the sample for the period studied.

Determining the method for collecting information

We will now review the different methodologies in use around the world,
describing briefly their operating principles and indicating their strengths and
weaknesses.

The oldest method: the diary method

Principle. The institute sends a diary to each panel member who fills it in
manually and sends it back every week by post.
Strengths. This system requires no specialised equipment to be installed in the
household. The cost of collection in itself is relatively low. The questionnaire
can easily include methods of answering appropriate for a given category (use
of visuals, precoded answers, questions adapted to specific product
descriptions, etc.). Since this method is not tied to any particular system for
coding ,products, it can be used in countries where the use of bar-codes is not
well developed, or for categories of products without a code (such as fresh
produce), without difficulty. The co-operation required from the panel
member is relatively simple, and does not require the handling of any
particular material. Finally, and this advantage is common to all the
methodologies listed with the exception of ID cards, the fact that the collection
of the information is done directly in the household permits the coverage of all
of the purchases, whatever selling point they have been bought from.
Weaknesses. Since the purchase diary is pre-formatted, the only categories
recorded are the ones which the institute 'proposes' to the panel members (in
general, they are the ones for which there are subscribers). The diary method
is thus incompatible with an exhaustive, or almost exhaustive, coverage of the
household's whole consumption, and does not permit the establishment of
inventories of markets which are not purchased. Reliance on a written record
limits panel coverage to literate populations and leaves room for panel
members' own interpretation in the description of the products; this can lead
to certain inaccuracies of identification, and, whatever the reason, does not
280 Denis Delmas, Dominique Levy

permit very clear distinction between two items from a single range which
differ, for example, only by the colour or the perfume. Since the completion of
the diary is disconnected from the purchase itself, it is sometimes done 'by
memory', and can reflect consumers' normal habits rather than their real
buying trends.
It is equally clear that the use of the post service is only possible in countries
or regions where the courier system is functioning correctly. Even then, this
mode of communication involves a delay which can not be reduced ('posting'
by the panel member and carriage). Finally, once the questionnaires are
received by the institute, they still need to be sorted, which permits a human
control of the responses but involves extra cost.

Collection of information in the household: home audit or 'bin panel'

Principle. The institute equips each household with a receptacle (bin) which
will be used to collect packaging of consumed products. In addition, a
surveyor visits the household regularly to carry out a pantry check, that is a
check of current stocks, mark them, and compare them to those marked on the
previous visit. Just as in the case of a retailer panel based on an audit of the
selling points, we can deduce the consumption of the household from the
following equation: consumption during period N = stock at period N-l
minus stock at period N plus products used in the interval (not marked).
Strengths. The co-operation of the panel member is reduced to its simplest: he
only needs to keep the packs of some products which he has used and to open
his door and cupboards regularly to a surveyor. The risks of forgetting to co-
operate are thus reduced to a minimum. The presence of the inspector makes
possible a more professional data collection, involving a stricter and faster
application of coding instructions, instructions for the introduction of new
categories, etc. In some cases the inspector is equipped with a portable
computer so that he can type in the information collected and transmit it
immediately to the institute. Finally, contact with the panel members solves
the problem of sampling management. Because of his visits, the inspector is
informed in 'real time' of any change in the household structure (birth, death,
moving, departure, wedding, change of professional activity, acquisition of a
pet, or of capital goods, etc.) and can inform the institute of them. He also can
check directly the 'normality' of the household's consumption in the period
and can ask the appropriate questions. Because the home audit allows the
stocks in the household to be measured, it is the method which gets closest to
monitoring actual consumption rather than purchases.
Weaknesses. The use of inspectors, and the logistics of their visits, do not
permit a wide geographical coverage of households in the sample and can
therefore damage its representativeness. Because the panel member' must be
present in the residence when the inspector is visiting, the home audit method
is difficult to practice in countries where the proportion of working women is
 Consumer panels 281

high. Similarly, it is not possible to apply this technique in countries where

labour cost is an obstacle to employing an inspection team. As regards
monitoring the markets, one may note that this procedure can be a problem
when applied to non-packaged products (bread, fruits and vegetables, etc.),
and with dairy products, of which the life in the household is significantly
shorter than the period between two visits.

Home scanning
Principle. The institute provides each household with an electronic scanner, an
apparatus which permits the optical reading of bar-codes and the recording by
the panel member of a number of details (quantity bought, price, place of
purchase). Bar-codes are directly read from the product packaging, when
available, and on a 'code book' (that is a collection of bar-codes with
descriptions of corresponding products) provided and updated by the institute
for use when the product does not have a bar-code. The collected information
is transmitted by telephone (the households are provided with a modem)
without any interaction from the panel member.
Strengths. The identification of products is precise (as is the codification by
bar-codes) and objective. Home scanning does not imply any pre-
determination of the categories to be audited, and permits the establishment of
a priori databases for non-subscribed categories. The co-operation of the
panel member is simplified and, for comparable products, its duration is
significantly reduced (compared with the diary book). The direct collection of
the data by telecommunication link between the institute computers and the
sample household means that there is no fear of any risks of forgetting to send
the information, or of delays in dispatch. This system has the advantage that
there is no need to type the information into the computer. Also, any changes
in the data to be collected can be effected simply by remote-controlled
modification 'of programs stored in the home scanner.
Weaknesses. Exploitation of the information given by home scanners depends
on the existence of a coding system. This requires the creation and
maintenance of a dictionary where all the bar-codes of the products being
purchased are listed, so the panel member can select the appropriate one. Each
bar-code is associated with a detailed description of the characteristics of the
product (category, segment, brand, name, size, special features, etc.). The
eventual quality of the panel will be influenced by the quality of this
dictionary which must be compiled before starting the panel and be updated
regularly. This represents one of the heavy investments necessary for setting
up a 'home scanning' panel, which also requires the acquisition, installation
and maintenance of each of the home scanners and the training for each of the
panel members. It is therefore obvious that the installation of such a panel is
materially complicated and very expensive. It also needs the establishment of
expert systems of validation of the returns from the panel members of a
particularly sensitive kind. These reasons, in addition to the requirement for
282 Denis Delmas, Dominique Levy

bar-codes and a high standard of telephone equipment within the households,

make the use of this method only possible in developed countries.

Collecting information at the shop cashier points: ID cards

Principle. The panel members are recruited around a store or within a precise
zone defined according to the major stores around it. They are provided with a
magnetic card (ID card) that they show at the cash point each time they are
purchasing goods in the store or stores included in the zone. The card is read
by a system which identifies the panel member and communicates the
description of his purchases directly to the institute. With this method, data
collection is obviously limited to the store or stores equipped with the relevant
system.
Strengths. The advantages which concern co-operation are obvious: the panel
member only has to present a card each time he is buying. He does not declare
anything, so that the interpretation risk is limited, as well as the danger of
laziness or forgetfulness. It is equally clear that this method has enormous
advantages for the input and processing of the data. Finally, the 'immediate
capture' of the data in the shop at the moment of purchase makes possible
accurate knowledge of any promotional offers (prices, promotions, etc.) with
which the purchase has been made, and therefore enables us to study the link
between this offer (and its variations) and the behaviour of the consumer.
Weaknesses. Whilst this methodology reduces the panel member-institute
collaboration to its simplest form, it requires an agreement with the
distributors whose accounting systems are to be 'pirated'. The panel is thus
dependant on the quality of their product coding system and their information
system. One is brutally exposed to the loss of the purchases from an entire
group of panel members if the store decides to terminate the agreement or has
to be omitted. If a panel member forgets to present his card, then all the
recorded purchases for that period are also missing. Moreover, it is difficult
for such panels to claim national representativeness (they are limited to one or
more specific zones) and their coverage is restricted to purchases made in
certain types of retail outlet (supermarkets or hypermarkets) and to bar-coded
products. Therefore, we can only use them for monitoring mass market
products intended for widespread distribution.
The combination of practical advantages and limitations of this kind of panel
makes them highly specialised tools, more suitable for area tests (of new
products or changes to an existing product) than for national tracking. It is for
this objective that they are generally used, sometimes with the addition of a
system permitting the integration of information related to advertising
exposure (e.g. Scannel of SECODIP in France, BehaviorScan in the United
States and Germany).
Overall, the two methods used most frequently are the diary method and home
scanning. Technology for home scanning has developed rapidly in Europe
 Consumer panels 283

over the last three years (following the United States). New panels are likely
to be created in the years to come, especially in Asia, South America and
Eastern Europe.

The nature of the collected information

Once the most suitable method for the country and for the objectives of the
panel are decided, the next task is to define the type of information requested
from the panel member. Here, too, it is necessary to reach a compromise
between the desire to enrich the panel and the restraints imposed by
complexity (of collection and processing), by cost and by data quality. In fact,
the more questions that are asked, the greater the risk of seeing the panel
member withdraw his co-operation Gudged too fatiguing). Moreover, not to
bias the behaviour of panel members by causing them to pay too much
attention to their own consumption, one must avoid all 'parallel' interrogation
of the sample member about his motivations, opinions and intentions in
relation to the categories to be monitored.
The essential data, which are therefore systematically required, are the nature
and quantity of the products purchased, their prices and their source of
purchase. Depending on the method of collection, the description of the
product will be gathered by way of passive recovery (digital reading of a
code), by recognition (for certain markets, such as clothing, we give the panel
member a list of products represented pictorially and he must recognise the
nature of the product he has just purchased), or by description more or less
complete and more or less assisted (type of products, brand, variety).
Quantities are generally described by the panel member as number of units
bought. The difficulty is to ensure a consistent (homogeneous) comprehension
of this notion (when a set of two packs is purchased, should the panel member
consider that he has bought one or two units?). The declared quantities will
then be converted (into kilos, litres, etc.) to permit a reconstruction of the
market volume.
Price can be recorded or in the case of ID cards, collected in the stores. Source
of purchase is defined by the type of retail trade, by the name and/or the
address of the store.
Other information that may be collected includes: the presence of a special
offer on the product (coupon, game with gift, free product) and the exact date
of purchase. For certain categories )f product, we sometimes ask the
housewife to specify which member of the household the product is for (this
notion is, for example, especially usefu for certain markets such as clothing,
cosmetics or confectionery).
284 Denis Delmas, Dominique Levy

Processing of the information

Once the sample is set up, the methodology chosen, the data defined and
collected, there remains an essential and delicate task: to process the data and
make them available for use.
Classically, this process is broken down as follows:
1. coding (constitution of the product dictionary)
2. setting up of a nomenclature (definition of the outlines of a market in
terms of products, and of the segmentation used to present the results)
3. selection of the panel members whose purchases will be considered for the
time period (in accordance with the criteria of activities described above)
4. calculation of the results (extrapolation and aggregation)
5. establishing the outputs (standard formats, cross-tabulations, databases).

At the data processing stage, questions may arise that are particularly sensitive
and critical, which (almost) every institute will resolve in its own way. There
is no question here of entering a technical debate on that subject, so we will
limit ourselves to mentioning the principal problems: the panel members'
holidays and the specific treatment (or editing out) of purchases which are
abnormally high.

ANALYSIS OF THE PANELS

We described in the previous section the principal stages in the organisation

and monitoring of a consumer panel. We will now turn to its utilisation. Very
roughly, this can be dealt with along two dimensions.
a The use of the panel results for:
* measuring and/or quantifying markets in terms of numbers of
consumers and levels of consumption
* arriving at a first level of understanding of the general functioning of
markets and brands, of their purchasing structures, of their
development mechanisms, integrating concepts of buyer profiles,
sources of purchase and purchase cycles
* establishing an initial understanding of the health of markets and
brands and identifying leads for deeper analysis.
a Proceeding to more specific analysis
* in accordance with the results of this initial analysis, and taking
account of events occurring in the life of the product, one is led to
conduct further analysis in more precise directions. The answer to
these specific questions will be gathered, in most cases, by means of
special studies.
- Consumer panels

The reading and analysis of panels thus implies using a number of indicators,
285

or measures, that are to be found, more or less, in all consumer panels. We

propose, at first, to detail their mode of calculation and their significance, and
then to describe their most common utilisation, before discussing the principal
marketing problems and the role that consumer panels play in their resolution.

READING OF THE RESVL TS

Principal indicators
a) The number of buyers, NA (NA = Nombre d'Acheteurs) corresponds to
the number of households that purchased the product at least once during
the given period. Penetration is the most frequently used indicator. We
talk of absolute penetration (NA brand/total number of households) or of
relative penetration (NA brand/NA market, i.e. percentage of households
purchasing the market that purchased the brand). The penetration
measures the size of the customer base, that is the proportion effectively
reached by the brand. Penetration gives a first diagnostic of the uptake of a
brand or a market.
The meaning of this notion varies markedly according to the length of the
period studied. Calculated over a short period, penetration gives an almost
photographic indication of the sales traffic generated by a brand. If this
information (monthly penetration for example) is compared with the same
figure obtained from a longer period, we introduce notions of frequency or
repetition. The graph of accumulating penetration over time gives us
information on how long it takes for a brand to reach its total customer
base. Comparison of this accumulated penetration with the penetration
cal~ulated for separate periods is a first indicator of repetition.
b) The average purchases per household. This may be expressed in terms of
volume (QA/NA, = Quantites AcheteeslNombre d'Acheteurs, i.e. the
average quantity bought per buyer), in consumption units (VC/NA, =
unites de consommation/NA, i.e. the average number of units purchased
per buyer, or in value (SD/NA, the average expenditure on the brand per
buyer). This indicator, whether it is called average frequency of purchase,
or level of consumption, measures the quantities purchased (or average
amount of money spent) per household for the period studied. The
transition from quantities to amounts spent is effected by means of the
average price, an indicator which is provided by all panels.
c) The quantities purchased (QA = Quantites Achetees) of a category or a
product are determined by the multiplication of the number of buyers
(NA) by the average purchases per buyer (QA/NA or SD/NA).
High levels of quantities purchased (QA) can be the result of a high
number of buyers (high NA) or a high average buying rate (QA/NA).
286 Denis Delmas, Dominique Levy

High levels of QA/NA can result from frequent buying, or buying which
is infrequent but of a high volume or amount. Therefore, they are not
predictive of frequency of purchase or of loyalty to a brand. To begin to
interpret them in that sense, they must be decomposed into two indicators:
QA per purchase occasion and number of purchase occasions.
c) The number of purchase occasions corresponds to the average number of
purchases in a household in a period, i.e. its purchasing frequency.
Depending on the collection method, there will be a number of purchase
occasions or a number of purchasing weeks (in those methodologies using
the diary method or the home audit). From this we will deduce the repeat
buying rate (percentage of buyers who purchase on at least two
occasions).
Clearly linked to the number of purchase occasions is the notion of the
purchasing cycle or purchase interval. This corresponds to the average
length of time (in days or weeks) between two purchase occasions in a
household. It is therefore a way to measure the familiarity of consumers
with a category or a brand (the more often they buy it, the more likely it is
that they will remember characteristics such as the price).
These indicators (frequency, purchasing cycles) are very useful for the
planning of certain promotional activities (duration of a game operation,
number of points to be collected, etc.).
e) The other variable which can explain quantities bought overall by the
household is the QA/purchase occasion (average quantity bought per
occasion) or the SD/purchase occasion (average amount spent per
occasion). This indicator is very useful for establishing a formulation
policy for the brand, e.g. what to include in a range, or the design of
promotional formats. It also provides a first approach to understanding the
level of involvement consumers have with a category or a brand (the
higher the amount spent on a purchase, the more we can suppose that the
consumer will have made a considered choice).
f) The last indicator commonly used is the share of requirements. It
measures the fidelity of consumers to a brand, and corresponds to its
relative weight within their purchases. It is calculated as QA/NA
brand/QA/NA category (i.e. the ratio of brand purchases to category
purchases) among those consumers who buy the brand.
Depending on the size of a brand's customer base, the size of its
competitors' universe and the level of consumption of its buyers, the share
of requirements can be read in very different ways. A high share of
requirements for a brand whose customer base is small and essentially
composed of light buyers of the category will suggest an atypical
positioning. At the other extreme, the same share of requirements for a
brand which enjoys a large customer base, and which recruits heavy
 Consumer panels 287

buyers in a category containing a large selection of alternatives, will

indicate that the brand is well capable of establishing customer loyalty.

As regards penetration, QA/NA, share of requirements or any other of the

indicators mentioned above, the reading and interpretation of the results will
depend on the period of time to be considered. In fact, depending on whether
we work with a short period (a month) or with a long lasting period (a
semester or a year), the meaning of the results can be totally different. If these
differences are obvious when applied to QA/NA (which clearly accumulates
for a given household over time), they may probably appear less clearly when
we are considering the repeat buying rate or share of requirements, yet their
importance for these is no less fundamental.
It is easy to understand that a repeat buying rate calculated on a monthly basis,
for a category in which buyers only purchase three times a year on average,
makes little sense. Its probable weakness will merely show that the consumers,
in most cases, have not had the opportunity to make another purchase.
Similarly, a high share of requirements in the same situation will mainly result
from the fact that it has been calculated on too small a base of purchase
occasions. The choice of the period to be read must therefore be made in
accordance with the characteristics of the category or brand (size of customer
base, purchasing cycle) and with the nature of the data to be analysed.
As we can see from these examples, a 'flat' reading of the basic indicators
rarely allows us to reach a first judgement on the health of a brand or to
understand how a market functions. Nevertheless, it is one of the first
objectives of consumer panels. To reach that objective will require the setting
up, at an early stage, of clever standards of reporting that will permit reading
of these indicators with satisfactory precision.
To achieve a 'more precise reading of the results, it is common practice to
'open them up', that is to segment them according to a number of criteria, so
that we can proceed to the comparison of these and then note salient points.
The criteria most commonly proposed for opening up the results are of two
types: either into sub-sets of households (sub-populations) or sub-sets of
purchases, regrouped according to the places where the purchases were made
(type of retailer, store name, etc.).
Sub-division into sub-populations is the method most often used and requires
the use of socio-demographic characteristics to describe the households in the
universe or the sample. The total population is sub-divided according to the
place of residence, the type of residence (rural, urban ... ), the age of the head
of household, professional activity, salary or number of children. It is also
possible to use criteria more specific to the nature of the market being
analysed, such as the presence of pets or babies in the household. For each
sub-population defined this way, the classical buying indicators are analysed
(NA, QA/NA, etc.).
 288 Denis Delmas, Dominique Levy

Panel results are also sub-divided in accordance with the places where the
purchases were made. We then have a reading of the performance of a brand
(always using the same indicators) according to the type of retailer (store close
by vs. hypermarkets, specialised shops vs. general shops, mail order etc.) or
the store name.

Once the periods for study have been selected, together with judicious
segmentation criteria, the list of brands to be monitored and the most suitable
indicators, it is then possible to set up a standard reporting system, to be
reproduced for each period. This reporting system will permit the comparison
of brands, periods (for dynamic reading), sub-populations, types of trade or
store names. The objective of this sorting of the results is to identify the
important facts. These may involve elements which discriminate between two
brands (the weakness of my brand compared with a specific competitor is due
to our respective levels of penetration), relevant developments between two
periods (in such and such a period there was a break in the trend line for my
brand: what event can explain it?) or differences in performance according to
one criterion or another in relation to a type of population or trade (the
increase in my market share is accounted for by households with children. The
QA/purchase occasions of my competitor are especially strong in this or that
named store).
Another way to read the indicators of the panel is to use decomposition
schemes to highlight the characteristics of a brand. These permit us to quantify
the contribution of each indicator to the overall performance of a brand and to
direct the analysis accordingly.
The first and most commonly used scheme is to decompose the total quantities
(QA). It is extremely easy and can be written as follows:
QA = NA (number of buyers) x QA/NA (average quantity bought per buyer)

-
(Figure 1).

OAINA Figure
0.0- 1ft prilXi ( 1
~ =
0)

3
I
/
BRANDV(llJJ\£
j
\
1(1r&nl8q
( N?Pcm )
 Consumer panels 289
--
It permits a first obvious interpretation. If we consider two brands with the
same buying volume (l00 litres for example), this volume can be reached in
very different ways.
Brand A might have a customer base of fifty households each buying two
litres, whilst brand B achieves the same sales with 200 households each
buying 0.5 litre (Figure 2).

Figure 2
QA = NA x QA I NA
NA

200

50
A
J
0.51 11 21 QA/NA

One can pursue this analysis by segmenting the QAlNAs using the following
equation:
QA/NA = Number of purchase occasions x QA/occasions
Returning to the above example, it will be seen that the sales of brand A are
achieved by fifty households, each with an average of four purchases of 0.5
litre each, whilst the 200 households of brand B each made an average of two
purchases with a volume of 0.25 litre per purchase (Figure 3).

Figure 3
QA/NA = QA I P. Occ x No. of Ps

No.of if
Purch.5

4 DA
2 3

0.1 0.2 0.3 0.4 0.5 QA/Purch

290 Denis Delmas, Dominique Levy

This simple example illustrates two completely different brand situations. In

the first case, we are clearly dealing with a brand which is well established
among a limited but regular customer base, which often returns to the brand
and makes substantial purchases each time. The second case is evidently a
brand with a larger number of customers, but buying less regularly and
making smaller purchases each time.
Of course, these results cannot be interpreted without referring to elements in
the context, arising from the reading of the panel or knowledge of the markets.
Their main use is to allow us to refine progressively the questions that should
be asked about these two brands.
In this actual case, to continue with our example, it would be essential to know
the 'age' of the brands in question (if B is a brand which has been launched
recently, its apparent lack of popularity might attributable to its youth), their
distribution (is brand A present in the same retail outlets as brand B, or is it
subject to a selective distribution?), their formulation (is the superiority of
QA/purchase occasion of brand A the result of the brand offering larger-sized
bottles?). All these elements are external to the panel but essential for the
relevant interpretation of the results.
We can complete this analysis by looking for other elements within the panel
itself. (We will always begin by referring to characteristics of the category in
question: the results of a brand cannot be understood outside the context of a
specified category). Are buyers of brand A heavier consumers of the category
(what is their level of consumption?). Does brand A benefit from a frequency
of purchase higher or lower than brand B (repeat buying rate)? The nature and
development of such questions can vary endlessly and will often lead to a
precise question that can only be answered with a special analysis.
In very rough outline, this first decomposition will direct the analysis of the
brand on certain very broad lines, to which we will return later. We can
mention some of them as follows.
o Weakness of NA Problem of recruiting new buyers.
o Weakness of QA/purchase Unsuitable formulations; failure to
occaSLOn adjust the formulation (pack design or
size etc.) to the target consumer;
Promotional activity;
Price positioning;
Brand status (is it a complementary
brand with a small share in the
purchases of its customers? Is the
brand positioned in a market with a
low level of consumption? Does the
brand have an impact on the smaller
buyers of the market?);
 Consumer panels 291

o Weakness in the number of Problem of repeat buying;

actions Assortment (is the offer of the brand
favourable to the circulation of the
buyers within a range?).

Another approach to the decomposition of the indicators takes its source from
the market share, which is the most common measure of overall performance.
Market share can be read as the product of the following elements:
Market Share = relative NA X share of requirements X index of consumption
where:
Market share = QA brand/QA category;
Relative NA = NA brand/NA category;
Share of requirements = QA/NA brand/QA/NA category among buyers of
the brand;
Index of consumption = QA/NA category among buyers of the
brand/QA/NA category among all buyers.
Thus:
INDEX
SHAREOF
OF
(brand X X
(brand buyer)
buyer) CONSUMPTION
(all
OAiNA
OAiNA
OAiNAbuyers)
category
category
Figure 4
category
X MARKET
X 11
1 I~

The use of this decomposition
following problems:
o Weakness of the relative NB
diagram will logically lead the analysis to the
Recruitment problem;
Distribution (type of distribution);
Brand appeal (reputation, image,
level of promotional activity,
importance of the price, etc.).
292 Denis Delmas, Dominique Levy

o Weakness in the share of Problem of establishing customer

requirements loyalty
Offer policy (range size, formulations,
pack sizes etc.)
Analysis of the competitors.
o Weakness of the index of Capacity to attract heavy buyers
consumption Mix offormulations (packs etc.)?
Analysis of the customer base (in
terms oflight, medium, heavy,
profiles)
Analysis of the heavy buyers of the
market (Who are they? What else do
they buy? ... ).

One can see that reading the results of a consumer panel rapidly leads to
specific marketing problems. Through this reading, one is led to ask questions
about the brand, either its customer base or its mix, its competitors, the market
in which it is positioned. Whether these questions are motivated either by the
reading of the panel itself or as a result of events arising within the markets or
products, we can, to answer them, dispose of a wide range of tools and
methods in which standard results and special analyses will be mixed.
There follow some examples of questions, or marketing issues, and how a
consumer panel can answer them.

MARKETING ISSUES
The answers obtained from a consumer panel to marketing questions will be
the indicators that we have just described and also more specific approaches
such as special studies.
Intended to complete and to deepen the analysis of the standard results, a
special study is a 'segmentation' of these results. Technically, a special study
uses disaggregated data (that is data separated panel member by panel
member, purchase by purchase) and rearranges them according to criteria
which define a population and/or a period or a sequence of purchases.
There exist a certain number of studies of this type, which are used, with
variations, by all the institutes. One can nevertheless imagine what sort of
questions are asked. To bring about a special study one might, for example,
wonder who are the new buyers of a brand, or try to understand what the
consumers who are giving up a product are doing, or to identify the heavy
buyers of a category.
 Consumer panels 293

It is thus the question that must precede the choice of a methodology. We have
tried to identify here the principal types of marketing issues, and name
examples of special studies relevant to them.
We will discuss in turn certain broad issues, which are:
o understanding the market (the product environment)
o the different aspects of the product's life (launch, customers, competition,
variables of the mix)
o the trade
trying, with actual examples, to explain the most common methodologies and
their practical use.

UNDERSTANDING OF THE MARKET

What is its positioning compared with other markets?

To understand consumers' behaviour towards a brand, we need to understand
their behaviour in the category of the brand. We will start by positioning the
category in the context of other categories so we can assess its importance in
the eyes of a consumer or a distributor.
The first information to capture is, obviously, its size (in tonnage, in number
of purchases or in turnover). One must also take account of such notions as
seasonality and distribution structure (is it a category generating the majority
of its turnover in hypermarkets, that is in an environment of strong
competition and large availability of choice, or, on the contrary, a 'selective'
category which benefits from a smaller distribution but a more preferential
access for the consumer when buying?).
Immediately after their overall size, we characterise categories by their
penetration, the average annual amount spent on them by the households, the
average number of purchases made by the buying households. The objective
of this sorting is to gain an initial understanding of how the market functions.
Is it a common category, regularly consumed by the majority of households
(such as butter, rice, etc.), or, on the contrary, is it a market which only
reaches a small part of the population? In that second case, is it a very
exceptional purchase, or very regular but restricted to a certain amount?
From the answers to these basic questions an initial description of the market
and its consumer emerges, in terms of familiarity (we know a market well if it
is one we make use of regularly) and of involvement (according to the amount
spent per purchase), etc.

Who buys?
Once we know how many people buy and how frequently, the first question to
ask is: who are the buyers?
294 Denis Delmas, Dominique Levy

We will answer this question first by defining their profile, that is by detailing
the level of penetration and consumption of the category according to different
criteria for describing the population.
This analysis permits us to:
o represent the structure of the customer base and of the category and, by
comparison with the structure of the population, to identify the groups that
are under- and over-consuming
o measure the contribution of the same groups to the total volumes of the
category.

By doing this, we then know which are the types of households which are
under- or over-consuming, and if this level of under- or over-consuming is the
result of a level of penetration or of QA/NA.
In the following example (Figure 5) it can be seen that an over-consumption
of the category by people aged 65 years and older is the result of a strong
penetration and a level of QA/NA much higher than normal. Logically, this
profile could equally be the result of a high level of consumption in
households with two people, a portion of the population in which the elderly
are represented.

Figure 5
CATEGORY A: PENETRATION AND CONSUMPTION LEVEL
BY SOCIO-DEMOGRAPHIC GROUP

PENETRATION CONSUMPTION LEVEL

Av. age 1 128.6 Av. age 1 I 6.9

-351"S 1 126.3 - 35 I"s r::::==::J 3.6
35 - 49 y •• 1 1 5.6
35-49yrs I: _ 128.4
50-64y •• 1 130.8 50-64yrs 1 17.4
65y •• &+ 1 111.1
65 y •• & + 1 129.2

rich II 15.0 15.1

15.9
16.017.5
17.1
16,918.9
15.8 18.5
deh 1 136.4
-3 pers I
poor
Lr Iinc
4pers
child'n.
Upper I I
2 pers
in I + I
Upper in 1 1 31.5
1 pers I
+ child'n·1
Lr ine 1 .•.. I 26.5
poor 1 120.5

1pe"l 127.3
2 pe"l 130.3
3 pe"l -: 129.3
4pers + 1 127.4

+child'n 1 130.5
- ehBd'n I I 26.9

Another common approach is to segment the population in accordance with its

level of consumption of the category. Classically, we can constitute three
groups: the light, medium and heavy buyers.
 Consumer panels 295

rIn the following example, we will consider that the 'heavy' buyers are the
20% of households for which the QA/NA are highest. Thirty percent of the
households following these form the medium buyers group, and the 50%
remaining will be the light buyers. We can equally fix definitions according to
the consumption level (heavy buyers = households that purchased X litres and
more during the period of study), or the number of purchase occasions. The
advantage of specifying these segments by percentages of buyers is that it
permits a homogeneous segmentation of one category (or a brand) compared
with another and makes it easier to set up the comparison and to establish
norms.
The first information produced by this type of segmentation is the relative
weight of each group of households in the total sales of the category. In our
example, the 23% who are the heaviest buyers account for 58% of the total
sales of the market (Figure 6).

Figure 6
CHEESE

Year 1996
NA: 23.2 % = 100 % QAlNA in gr
755 gr
225 gr
41
o LIGHT 625 gr

.MEDIUM

IililHEAVY

1,930 gr

Segmentation Segmentation
of customers of volumes

Besides the degree of concentration of the market, the study of light, medium
and heavy buyers allows us to describe the different groups in terms of:
o profiles
o buying behaviour (QA/NA overall, number of purchase occasions,
QA/purchase occasion, number of brands purchased)
o nature of the purchases (what other categories do they buy, what brands
within the category do they consume?).

This study allows us to identify precisely the heart of a target market and to
identify the elements of differentiation between an average and a heavy buyer.
296 Denis Delmas, Dominique Levy

What are they buying?

Very logically, the next step in understanding the working of a market is the
analysis of the purchases.
Beyond the basic description of the timing of purchases, understanding of the
purchases is developed by studying their nature in terms of segments and/or
brands. We can, at this stage, use two notions: mixture of purchasing and
simultaneity of purchasing.
We talk of mixed consumers to describe households that are buyers of several
segments or brands during a given period, as opposed to exclusive consumers
for which all the purchases come from the same segment or the same brand.
In the case of a market composed of few segments, they can be more or less
watertight to one or another, more or less complementary or more or less
competitive. The study of their mix allows us to design a first partition of the
market and to understand the role of each segment in this context.
Consider an example of a market composed of two segments, fresh food (A)
and frozen food (B). The two segments differ, first by the size of the customer
base for each and by the QA/NA recorded. We could, of course, improve on
this first view by completing it with information on frequency, on the
QA/purchase occasions, etc.
The analysis of the mix between the two segments (Figure 7) tells us:
o 80% of the customers of the fresh food also buy the frozen food.
o Households which buy both fresh and frozen food represent 20.7% of the
households, which is 30.9% of the customer base of the category, and their
purchases represent 48% of the sales volumes of the category, because of
QA/NA of7.9kg against 6.7kg average.
o The mixed buyers are heavy buyers of frozen food (5.9kg against 4.2kg for
the exclusive households in the segment) and average buyers of fresh food.

We can conclude that the market in question is composed of a principal

segment (frozen food) and of a complementary segment (fresh food). Since
the level of consumption of the mixed buyers in both segments is superior or
equal to that observed for the exclusive buyers, we cannot conclude that the
two types of food are competing with each other.
For a marketer working in this market, the conclusion would be that the
ideal offer is composed of products belonging to both segments, with a
preponderance of products from segment A.
Through the analysis of the mix, we get to a first approach to the segmentation
of the market, that we will complete later with the study of competition
between brands or products.
 Consumer panels 297

Figure 7
MIX BETWEEN SEGMENTS

QA/NA QA/NA
A B
NAp100 66.8% 1.9 kg 4.8 kg

20.7 ~/", 2.0 kg 5.9 kg

5.5%
1.9 kg

40.6 % I I I I 4.2 kg

Customer share Volume share

o Frozen only o Fresh only.Mixed

As indicated by its name, the study of simultaneous purchasing applies to the

description of purchases in the same trolley. (In accordance with the
methodology of collection used, the notion of simultaneous purchasing will
describe products purchased either during the same visit to the store or during
the same week).
The question is to know what is contained in the housewife's basket. This
investigation can be used to place a category within a collection of product
families accompanying it (for example, we might be interested in which
different families of drinks are bought at the same time, or which different
types of breakfast products), or to place segments or products within the same
category in relation to each other.
The example in Figure 8 concerns two different types of cold dressings for
meat and fish. It tells us that, in 66% of cases, when a consumer buys type A
(the dominant type in the category), he also buys at least one other type of
dressing at the same time. The study next tells us how these simultaneous
purchases are combined (here, we can see that the variety most commonly
associated with type A is variety C, and that is the case in 17% of the
congruent purchases).
The study of simultaneous purchasing improves understanding of the
mechanisms of competition or complementarity between categories, segments
or brands. It permits us to improve the range policies of a manufacturer or a
distributor. It is also useful in certain cases for researching promotional
mechanisms.
Those are a few examples of studies that can help to place a category, to
visualise the main behavioural characteristics of its consumers. It is clear that
the approaches described above can and must enrich one another. We can also
 298 Denis Delmas, Dominique Levy

look at the profile of exclusive buyers of a segment or proceed to a precise

analysis of the mix of purchases by heavy buyers of a category. Of course,
these investigative methods are not the only ways of answering the general
questions raised about markets, and their field of application is not restricted
to this type of problem. They equally find their place in other investigative
contexts, especially in analysing brands and products.
Figure 8
COLD DRESSINGS CATEGORY

Share of purchases of A Broken down by Varieties bought at same

time
18%

I
16%

14%
r-
~
r-1
8%
11%
5%
14%
Ii r-1
,--,
10% -,
8%

12%

10%

8%

6%

4%

2%

0%
B c D E F G H

66% of purchases of A are made with a simultaneous purchase of another variety

ANAL YSING BRANDS AND PRODUCTS

Established products
Questions regarding established products are many and varied. However, we
may consider that the principal ones are related to the following themes.
o How many buyers are there?
o Who are the buyers? Are they loyal? What else are they buying?
o What is the competitive universe of the product? Who are the most
dangerous competitors?
o How can we refine and make an evaluation of the different components of
the mix?

Who are the buyers?

The answer to this question passes initially through the same stages of analysis
as the studies of the customers of a category (quantification, description by
profiles, breakdown into light, medium and heavy buyers).
In the case of a brand, the build-up and renewal of its customer base may be of
interest, as well as the attachment of the customer to the brand, in terms of
regularity and loyalty.
 Consumer panels 299

To build a customer base requires, in the first place, recruiting buyers and then
establishing customer loyalty. During the lifetime of a brand, its customer base
is enlivened by a continuous motion of renewal: at every moment the brand is
losing and gaining customers. The illustration in Figure 9 illustrates this
continuous flow.
Figure 9
THE BRAND IS IN PERPETUAL MOTION

As can be imagined, the aim of a brand is, at the same time, to maintain or
increase the level of water in the bathtub, and to limit leaks by introducing
enough 'fresh' water; in other words, to have a balance of gained buyers
against lost buyers and to keep its customers as long as possible. The
challenge is to keep recruiting new consumers (which is usually expensive)
and/or to increase the regularity or loyalty of the ones already attracted.
Depending on the maturity of the product, marketing efforts will tend towards
one or other of those objectives.
From this point of view, the consumer panel will, first, allow us to identify the
nature of the major problem of the brand (recruitment or loyalty). It will also
help us to understand the consumers' behaviour and thus identify the reasons
for any lack of regularity or loyalty, and the means to cure the problem.
We will start by measuring consumer flows. The simple reading of the
evolution of the cumulated penetration rate and of the repeat buying rate
permits an initial diagnosis. To improve on it, we very often use the analysis
of the loyal, lost, gained customers of a brand.
This study consists of two distinctive periods (two semesters, or two years for
example) and segments the customers into three groups:
o The loyals or renewers: they are the consumers that purchased in period 1
and in period 2.
o The lost: the consumers that purchased in period 1 but not in period 2.
o The gained: the consumers who did not purchase in period 1 but did in
period 2.
300 Denis Delmas, Dominique Levy

By means of this analysis, the renewal rate of a brand's customers can be

measured (the percentage of customers who are not retained during both
periods) and the behaviour of buyers in each group analysed for the two
periods. Thus, we can discover where the gained consumers come from, where
the lost consumers are going to, and the characteristics (in terms of QA/NA,
frequency, share of requirements) of the retained buyers (Figure 10).

Figure 10

Period 1 Period 2

Non category Non category buyer

buyer Competitor buyer
Brand X buyer
.Non category buyer
Brand
buyer Brand X buyer
:Competitor buyer.-

Brand X buyer
Competitor
buyer Competitor
buyer

non category buyer

Figure 11
YOGHURT
BRAND A: RENEWERS, LOST, GAINED
NA= 6.5%
NA= 5.8%
OAINA: 4.0 kg OAlNA: 3.1 kg

OAINA: 1.1 kg OAlNA: 1.1 kg

OAlNA: 7.9kg OAlNA: 6.3 kg

f-- - --t--
T1 T2

T1 = Year dating from first week; T2 = Year dating from first week

The example in Figure 11 is of a yoghurt brand. We can see that the

penetration of the brand is significantly increasing from one year to the next,
from 5.8 to 6.5% of buying households. On the other hand, it is penalised by a
 Consumer panels 301

high renewal rate of its customer base and, above all, by a worsening of
QA/NA among the renewal buyers. In total, the brand is losing approximately
15% of its volume between the two periods.
We could complete the analysis by studying more closely the purchases of the
lost consumers (is their loss due to a total or partial withdrawal from the
market or a result of switching to other brands?), and of the retained
consumers. Regarding this last population, the question is to find out whether
the fall in their QA/NA is due to a reduction in frequency (perhaps
foreshadowing their defection), or in QA/purchase occasion, and if it is
expressed in a reduction in the brand's share of requirements, that is a drifting
away to other brands.
These two concepts: frequency (and regularity) and loyalty (or relative
importance of the brand in question amongst all purchases) are two essential
indicators of the solidity of the brand. To analyse them, we often use studies
of distribution.
The distribution of the frequency of purchasing consists of classifying the
buyers of the brand in accordance with the number of purchases made during
a period. It permits the identification of the occasional buyers, regular buyers
and assiduous buyers, and to measure their contribution to the sales volumes
of the brand. Depending on the stage of maturity of the product, a high share
of occasional buyers can be a sign of a period of recruitment or, in the case of
a product in decline, a sign of a weakness in the brand.
In either case, the analysis of purchase frequencies and their distribution is
important. A deficit of assiduous or regular buyers can lead to questioning the
policy respecting the formulations (packaging, etc.) or varieties of the brand,
or to organising promotional activities to encourage repeat purchasing
(collecting tickets, discount coupons) or the circulation of the buyers between
the varieties on offer, rather than instantaneous promotional mechanisms
which are better adapted to a problem of recruiting new buyers.
If the number of purchases of a brand by a consumer is a good indicator of his
familiarity with the brand, it is not directly linked to his loyalty to the same
brand. Loyalty is a relative concept, which will be measured by the part
played by the brand in the purchases of its customers. If a consumer buys
brand A very regularly but another brand even more regularly, it may be
considered that he is assiduous with regard to both brands, but loyal to neither
of them. On the other hand, a very occasional buyer of a brand who does not
buy anything else in the category will be an occasional but also a loyal buyer.
Loyalty is measured by the share of requirements, the distribution of which
will allow us to classify the consumers in terms of their degree of loyalty to
the brand.

The example in Figure 12 refers to a milk brand. We can see that the 20%
most loyal buyer group accounts for 52% of the volume of the brand, which