Display Penetration for IRI's New Product Pacesetters

The launch of a product is one of the more opportune times to undertake display programs, because of the attention it can gain not only from shoppers, but also from retailers.In a November 2003 survey of brand marketers, the fact that a display is supporting a product launch was cited most often as a critical reason for display acceptance. (See "P-O-P Trends Acceptance Factors" at right.) Retailers are willing to accept display programs for new products because: A launch is typically supported by a significant marketing budget, which usually means potentially traffic-driving media advertising and incremental trade funding. New products can deliver incremental sales for stores. Placement of displays allows the retailer to test a new product's sales potential without having to significantly alter the existing category shelf set (or incur the expense of doing so).As for shoppers, 39% say they first learn about new products from in-store displays ("How Shoppers Learn About New Products" at right), and more than 75% say they're more likely to buy a new product if they see it on display ("Influence of Display on Purchase Likelihood" at right).Information Resources, Inc. releases an annual report called "New Product Pacesetters" that examines the 10 best-selling new products of the previous year among food and beverages and among non-food packaged goods. (See Related Articles.) The report typically includes ad-spending estimates (from ACNielsen) for these 20 products, so that a comparison can be made between sales success and ad spending. However, this data strongly suggests that amount of ad spending does not predict new-product success: Breyers CarbSmart Ice Cream was the most successful new food and beverage product of 2003-2004, with sales of $137 million through the food, drug and mass-merchant channels excluding Wal-Mart (FDMX) in its first 12 months on the market, despite having the smallest ad budget on either list; Tylenol 8 Hour had the third-largest budget among non-food products, but produced only the 10th highest sales total.Using data supplied by field auditing company Mosaic InfoForce (now wholly owned by IRI), the Institute sought to similarly compare the level of display penetration with sales success. While there appears to be a stronger connection between display activity and sales success, however, no direct correlation can be drawn here, either: Prilosec OTC was far and away the most successful launch on either list (earning $239 million in sales in its first 12 months) and also had the strongest display penetration of any new product; Breyers CarbSmart Ice Cream -- a refrigerated item with little potential for secondary placement -- topped the food and beverage list despite having relatively low display penetration.Not surprisingly, nearly all of the most successful new products were launched by major packaged-goods companies: Procter & Gamble accounted for five, PepsiCo, Coca-Cola and Energizer two each, General Mills, Kraft Foods, Unilever and Johnson & Johnson one. These industry leaders boast formidable distribution resources (either internally or through outside merchandising companies), large marketing coffers and strong retailer relationships.That's why most of the products on the lists were able to gain strong display placement almost immediately: Prilosec, Pepsi Vanilla, Mountain Dew LiveWire, Diet Coke with Lime, Sprite Remix and Schick Intuition all had displays in better than 40% of stores within the first two months after launch.On the 2003-2004 lists, there are three exceptions: Breyers CarbSmart, Yoplait Nouriche and Healthy Choice Flavor Adventures -- all refrigerated items -- took several months to reach their peak for display penetration.The other notable exception is Mucinex, the only product on either list to come from a relatively small company, Adams Respiratory Therapeutics. The over-the-counter expectorant received strong display support in fall 2004 after launching a consumer advertising campaign (featuring the animated "Mr. Mucous"), with penetration peaking at 15.0% in November.Additional Notes: Display penetration for Procter & Gamble's Prilosec OTC, heartburn medication -- 39.2% of stores in the last four months of 2003 and just under 30% over its first 10 months in market -- was rivaled only by that of Diet Coke with Lime (37.5%), which benefited from Coca-Cola's near-ubiquitous secondary presence in supermarkets. Prilosec's September 2003 launch was supported by one of the most extensive in-store marketing campaigns ever. (See Related Articles.) The brand's peak came in its second month, when a display could be found in 52.2% of stores. Heavy activity (20% or better) didn't subside until summer 2004, when a severe product shortage made display placement a moot point.Pepsi-Cola launched Mountain Dew LiveWire in late May 2003 as a limited-time-only product. Its success inspired the company to bring it back for a longer "summertime" run in April 2004.Smirnoff Twisted V's relatively low penetration in the first seven months reflects the select-market testing Diageo conducted before rolling out the brand nationally in January 2004. Penetration peaked at 15.95% in July 2004.Data for L'Oreal Dermo-Expertise represent display levels for Dermo-Expertise Refinish, the most prevalent SKU in the line.

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