This paper will look at two markets as case studies (microwave ovens and 3-in-l vacuum cleaners) and attempt to show that an accurate prediction could have been made of when the markets would peak. In each case study the prediction is made when the markets were growing at their fastest - the most difficult time to make such a forecast. The experiences gained from the case studies are then used to make a prediction for the camcorder market in Great Britain - a market which itself is currently undergoing a period of rapid volume growth. The principal device used to forecast the market peaks is a mathematical equation often referred to as the logistic equation. More commonly this particular tool is used in population forecasts but it works very well here too, providing the input data is accurate enough. Accurately predicting the market peak is one thing, but what happens after the peak also needs to be understood. Analysis of continuous consumer data can highlight whether the market is likely to go into rapid decline or to stabilize into a mature replacement market. The data used throughout comes from two sources: 1) Lek-Trak GfK's census based monthly retail audit of the electrical durables markets in Britain and 2) Home Audit GfK's quarterly consumer measurement. Home Audit acquisitions data is based on 100 postal/telephone interviews per year; the ownership comes from 10 face-to-face interviews per year.
The Consumer Electronics Industry has worldwide arrived at a phase of reconditioning. Both manufacturers, consumers and the intermediate trade are confronted with Shakespeare's intriguing question mark: "To Be Or Not To Be?". Who will survive? There is no doubt that in the marketing era of Consumer Orientation and Consumer Satisfaction, the consumer will survive in the end. But what about manufacturers and the intermediate trade, where business is going more and more multi-national, regional or global? Will they endure, and how many manufacturers will endure? Market- and Marketing Research and Intelligence cannot solve all these questi- ons, but there is, certainly in these days, a tremendous opportunity to help solve these questions. Three major Issues will be highlighted, where alliances and partnerships are leading principles. The first Issue relates to the future of the Electronics Industry in Europe itself. It will pave the way for the second Issue, which refers to developments in Distribution in the European arena, and whether these will deliver opportunities to Consumer Electronics manufacturers. The concept of Added Value will be shown to be the cornerstone of new policy making. The last Issue covered refers to developments in Marketing Research and Intelligence, and whether Marketing Research and Consultancy can help improve Customer Orientation and the development of Partnerships, both at Trade, and Consumer level.
The Durables industry is considerably less researched than many others, such as fast moving consumer goods. It is a competitive one nevertheless, and research has, or should have an important role. Moreover there are some problems which are more or less peculiar to Durables because of their very nature: for example their greater longevity, higher price, and relatively low volume of sales. The paper explores some of these problems in three main areas: Product evaluation: the practical difficulties in product testing, the need for reliable methods of market simulation to predict the likely success of new products or concepts, and the need to gauge how a product is received by consumers. Market and brand share tracking: with few exceptions retail audits have a short history in Durables, and although they are improving and extending their coverage, there are still gaps. Consumer tracking: the contribution of consumer panels, often limited in their ability to measure recent developments by low purchase penetration; other approaches to measuring adoption and switching behaviour. The paper concludes that the scope for industry initiatives in improving research techniques are probably limited, except in the sphere of syndicated research.
Probably 95% or more of all NPD in the durables sector is associated with product evolution and range extension. Once in a while, with luck, the NPD marketer gets the opportunity to substantially innovate a product category. The process isn't that different from managing an evolutionary development, but the risks involved tend to be much higher. No comforting files of historical data plotting the market development and the company's performance against that of its competitors. No carefully structured segmentation or price point analysis. Just an idea, and a belief that it can be turned into a commercial success. This paper outlines one such idea and how that idea was nurtured and finally brought to market with the help, or in spite of the many hurdles and procedures bound up with the product development process in a large company. The paper does not seek to preach any doctrine, merely to illustrate how one project was successfully completed.
Increasing competitive pressure - notably from the Far East - threatens the European consumer durables industry. The trade are becoming more sophisticated and demand more from suppliers. Product performance and new features are no longer enough to build a long term position of strength: they are rapidly copied by competitors. Instead, European manufacturers must develop long term values for their brands which allow them to form emotional bonds with consumers; just like successful grocery brands. Marketing communications play a crucial role in this process. The author traces a history of developing techniques in f.m.c.g. marketing, and finds parallels in contemporary durables communications: from "informational" advertising, through demonstrations of product performance, FALSE steps including the use of irrelevant humour, to a "nineties" approach based on a deep understanding of the role the product and brand plays in consumers' lives. He cautions researchers against judging the success of brand communications against limited objectives; and calls for a pro-active process of "brand audits" to define the long term personality and emotive franchise of the brand, and provide a basis for assessment of individual communications.
In the annals of the history of business, the L980s will undoubtedly be recorded as the decade of globalization. But like so many other aspects of that hyper-decade, the rhetoric of globalization often out-ran the reality. For the marketer retailer or manufacturer of the 1990s, it is necessary to move beyond the glittering generalities of globalization, and toward a deeper appreciation of the limits as well as the possibilities inherent in any global business strategy. Nowhere is this more TRUE than in the durables marketplace. Manufacturers of audio, video or electro- durable products were among the first to develop global brands. How deeply has the globalization movement penetrated in the durables marketplace? And what are the prospects for its continued advance? More specifically, what does European distribution mean in the durables context? If you are a manufacturer or distributor of audio, video or consumer electro products, understanding what European truly means in the 1990s could spell the difference between success and failure. We all know what the term European used to signify. In the 1980s, the decade of multinational commerce, regionalization and global marketing, no part of the world seemed to exemplify these trends better than Europe. But things have changed, and we have all grown a bit wiser. For today's marketer, the 1990s time for a harsh reality check, a time to move beyond the glittering generalities of globalization and toward a deeper awareness of both the potential and the limits of regional or global business strategies. This reality check is particularly appropriate in the durables marketplace. Manufacturers of audio, video or electro-durable products were among the first to develop pan-European or even global brands. How deeply has the drive for a unified Europe affected distribution in the durables marketplace? What is a European brand? What constitutes a local brand? And what are the prospects for the future? To answer these questions, representatives of Nielsen Europe conducted a complete trade census of the retail trade across 17 European countries. The results are reported in this presentation. This research was supplemented by wide-ranging interviews with retailers and manufacturers of durables products. Two sectors of the retail trade were studied. We began with specialized trade in audio-video-electro goods ranging from CTVs and white goods to small domestic appliances, through chains and independent dealers. Secondly, we studied the sale of batteries, cassettes and other durables products through hypermarkets, supermarkets and other outlets in the Fast Moving Consumer Goods or FMCG distribution network. And I am delighted to be able to share the results of this research with you here today.
The paper describes a research tool- the Conversion Model -which is now being widely used in the USA, but is still relatively unknown in Europe. Essentially what the model does is to define the people in any given universe according to their relationship with a given brand i.e: for current owners/users of the brand, how strong is the relationship? for current non- owners/users of the brand, is there a basis for building a relationship? The principle of the model is that what needs to be established is not a single dimension of "customer satisfaction" but rather the precise interaction of three separate forces which determine the course of conversion: satisfaction, involvement and ambivalence. What it produces is a statement about customers likely future decision making. This can be particularly useful in product fields where the trends in brand switching may be difficult to read - e.g. consumer durables with 5-7 year replacement cycles. The paper reviews the underlying principles of the model, and describes how it can be employed, using illustrative examples drawn from studies in the car market.