By Erica Wenham, Thursday 17 May 2013.
Modern Marketing Information & Analysis (Week 28 - Exam Revision)
“Danone Activia: How a little bit of T.L.C.
made a market leader”
Principal Authors: Rowenna Prest and Alice Huntley,
RKCR/Y&R
Contributing Authors: Alan Bloodworth and Benjamin Morgan,
OHAL; Beatrice Boue, MEC; Shawn Pitt, Millward Brown
(Institute
of Practitioners in Advertising/IPA)
Silver, IPA
Effectiveness Awards, 2012
Introduction
This is a story of how a challenger brand became leader in
an especially competitive market. How a brand built on a functional claim to be
the solution to a particular kind of problem found a way to engage an even
wider group of consumers who didn't identify with that problem. How a small pot
of yoghurt gave over 10 million people a simple way to give themselves a little
bit of T.L.C. How a new brand platform delivered incremental sales of £58.6
million, a net profit of £3.6 million and an ROI of 23%. This is the story of
Activia.
Activia to 2009
The Activia brand is part of
the Chilled Yogurts & Desserts (CYD) market which by 2009 was worth over
£2.2billion. This category is tough, dominated by high-spending brands. And as
a discretionary part of the shopping basket, constant streams of new products
are launched, competing to keep consumers interested. Activia grew
exponentially in value from 16th in 2004 to 2nd by 2007. There it stayed vying with, but never
overtaking, the market leader Müller Corner.
Activia’s Ambition for 2010
In 2010, Activia UK had to be a true talisman for success:
being 2nd wasn't
good enough. In 2010 the brand’s agency were tasked to make Activia number 1.
To achieve this, Activia needed to grow faster than Müller Corner, which meant
they had to grow their value by 7%, equating to over £13 million value sales.
What Communications Had To
Do
Activia is a strong product
with a high repeat purchase rate: in 2009 70% who bought Activia did so more
than once (Fig. 1). Once hooked, the frequency of purchase is high: 6.6/year
versus 4.6/year for Müller Corner.
Fig. 1: Repeat purchase rate for Activia
in 2009
As a result, the company knew
trial would deliver more growth than frequency of purchase amongst an already
loyal customer base. To meet the 2010 target of 7% value growth Activia needed
to increase household penetration by 3.5 points to 38%, in other words add
900,000 new consumers.
The Challenges
Yogurt is a healthy category,
and Activia had a health claim: being a solution to the problem of
"digestive disorders". This refers to a broad set of self-reported
issues which the Activia U&A study demonstrated were experienced by 57.7%
of women.
By December 2009, household
penetration of Activia was 34.5%, two-thirds of whom (i.e. the 21% segment in
Fig. 2) reported digestive disorders.
Fig. 2: UK female Activia user & non-users,
split by those who do and don't suffer from digestive disorders (Source:
Activia U&A, TNS, June 2008. Base: 610 women aged 18 to 70 years old,
nationally representative)
But why hadn't this 36.7% tried it already?
The top three barriers to purchase amongst this potential
group were relevance, price, and taste (Fig. 3):
Fig. 3: Top 3 barriers to trial
amongst non-users with digestive disorders (Source:
Activia U&A, TNS, June 2008. Base: 224 women aged 18 to 70 years old, who
have a digestive disorder but don't use Activia)
Barrier 1:
Lack of Relevance
Lack
of relevance amongst people with digestive disorders seemed peculiar. Activia
had been successfully marketed on the basis of a widespread problem, so people
with that problem should be open to trying it.
Qualitative
research showed that however convincing their consumer testimonials had been
for many, there were many others who, who even if they said they sometimes
experienced the symptoms on the U&A survey, didn't think they had a
digestive "problem". Simply, it wasn't for them, it was for 'others'.
- "I just don't suffer from that bloated
stomach thing and that's what those ads say"
- "I've seen that ad before and I thought it
looked really good, but it isn't for me because I don't have that
problem."
- "It doesn't interest me one iota because I
don't have that bloated thing"
(Source: IPSOS, May 2008)
Looking at frequency of suffering of digestive disorder
revealed two-thirds didn't experience them often enough to feel they had a
problem (Fig. 4).
Fig. 4: Frequency women claimed to
suffer from digestive (Source:
Activia U&A, TNS, June 2008. Base: 352 women aged 18 to 70 years old, who
have a digestive disorder)
It
was clear that to continue increasing penetration Activia needed an idea that
would move beyond the "problem" and make the benefit of Activia more
relevant to more women.
However,
Activia were mindful that broadening relevance couldn't be at the expense of
differentiation. BrandAsset Valuator, (which measures brand perceptions,
linking them to commercial performance), demonstrated both were important to
build brand strength and a market leading position (Fig. 5).
Fig. 5: BAV Powergrid In 2008 Activia
had to increase relevance & differentiation (Source: BAV, Y&R UK. Base 1,856 British
women, nationally representative)
Barrier 2:
Price
Activia
was sold at a premium. The business felt confident that if they could fix
relevance and taste perceptions, price would cease to be a barrier, proved by
the high repeat purchase rate amongst existing users.
Barrier 3:
Taste
Taste
was an essential driver in the category.
"Health looks set to remain on the nation's long-term food
agenda, but taste is still the top factor in consumers' choice of snacks.
Against these often contradictory demands facing snacks, the majority view of
yogurt as a healthy but tasty snack and a popular alternative to chocolate or
desserts puts it in a rare, strong position for long-term growth."
(Source: Kiti Soininen, Senior Food
Analyst, Mintel)
Fortunately, Activia was very tasty.
Users see Activia's taste as even more of a benefit than its
ability to reduce bloating, impacting more on its repeat purchase rate. But for
non-users, the problem of bloating obscured taste, leading to low taste
expectations. (Fig. 6)
Fig. 6: Unprompted benefits of
Activia: users vs. non-users (Source:
Activia U&A, TNS, June 2008. Base: 610 women aged 18 to 70 years old,
nationally representative)
Whilst
Activia's positioning had to centre on health, as this is where the equity of
the brand had been built, they needed a positioning flexible enough to address
all three barriers.
Solving
the Challenge
Their hunch, backed up by the findings of the IPA, was that a
broader, more emotional health positioning would be more powerful. Activia commissioned
research to see what would happen if the brand were to be re-positioned:
Fig. 7: Hypothesis on how Activia's
positioning ought to shift (Source:
RKCR)
The results discovered the following:
Talking about a happy tummy was a more
positive way to reference Activia's benefit and delivered
a rich emotional territory
Results
surprisingly showed how much potential users had to say about their tummies. A
healthy tummy didn't just mean you didn't have to linger in the loo; it meant
you felt great too, inside and out.
- "If you are healthy you are happier"
- "When your tummy is right you feel better,
more confident, better able to tackle things"
- "When your tummy is working you are
happy"
(Source: Cre8tive Research, Nov 2008)
The bigger emotional need was for a bit
of T.L.C., not just a remedy for tummies
The
mums spoken to were facing endless and exhausting multitasking, resulting in
little time to care for themselves:
- "We're usually bottom of the pile"
- "I care much more about my husband or
children's insides than mine"
(Source: Cre8tive Research, Nov 2008)
As a result, the brand and agency felt confident that Activia
could play a role in helping the nation's mums look after themselves; helping
them have happy tummies and making them feel good on the inside and outside.
The Brand New Idea
The
organisation used these insights to create a powerful brand platform, which
positioned Activia as a delicious champion of happy tummies everywhere.
The
creative idea was to hijack the common term "T.L.C.", imbuing it with
new meaning, no longer "tender loving care", but "tummy loving
care."
Research
showed this idea had the potential to resonate powerfully with women;
- "It pricks your
conscience that you should think about yourself more"
- "It made me feel better - because it's moved
me away from the bloated thing"
- "It's quite caring and warm in a way"
- "People will remember T.L.C. - tummy loving
care"
(Source: Cre8tive Research, Nov 2008)
Importantly,
given the competitive nature of the market, it still felt distinctive- no other
brand owned this emotional territory.
A clear communications
strategy was now put into place (Fig. 8):
Fig. 8: Activia's 2010 Communications
Strategy (Source: RKCR)
A
New Communications Approach
1) Creative Vehicle
Championing Women's Right to T.L.C.
Activia
wanted to motivate women that they had the right to a little T.L.C, a much
bigger message than normally delivered by CYD brands. So, communications had to
have a confident, upbeat, almost celebratory in tone to convey the sense of
feeling great.
Activia
developed a positive rallying cry to the women of Britain to love their
tummies, with the phrase 'Give yourself some Tummy Loving Care', underpinned by the rousing classic, Gimme Some Lovin".
Delivered by an Engaging, yet Identifiable Champion
Finding
the right person to champion this cause was key.
It's
been well documented that the use of a celebrity, if done well, can
significantly increase engagement.
Activia needed someone who a), women could
relate to and b), might credibly need a little help to keep their tummies on
track.
Countless
celebs failed to make the cut.
Then
they struck gold.
Activia
found the nation's typical 'girl next door': Martine McCutcheon.
Her
appeal was strong, having starred in big heart of the nation entertainment such
as Eastenders and Love Actually. Yet, in spite of her success, research found
that the target audience could still identify with her:
"I like Martine
McCutcheon she is a real woman - not all skin and bone like some."
"You can imagine her shopping in Tesco's like we do."
Source: Movement, T.L.C. Creative
Development, 2008
Looking like a
Market Leader
Activia wanted to feel like a
brand for everyone. But also wanted Activia to feel like a leader, building an
iconic image in consumers' minds. So, they developed a strong visual for
Activia T.L.C. (Fig. 9 & 10) which ran as posters, a media rarely used by
other CYD brands.
Fig. 9: Activia launch poster &
key visual
This
image was then successfully taken across other media, such as the Activia
website (Fig. 10)
Fig. 10: Activia’s website with key
visual
2)
Media & Messaging
Delivering Taste: The Flexibility of the Creative Thought
and Vehicle
The
testimonial approach made delivering non-health messages difficult. However,
because 'T.L.C was a clear idea with more flex, it could carry a range of
messages, including taste. After all, as the previous quote indicated people
believed Martine wouldn't be shy indulging her taste buds.
Market-Leading
Media Behaviour (Econometrics)
Activia acted like
a market leader, increasing its media investment by 17% and share-of-voice by 8% (Fig. 11)
Source: MEC&OHAL
TV predominantly delivered this (Fig. 12) because it was
excellent at provoking an emotional response and econometrics had proved its
ability to payback for Activia previously. Outdoor was the key secondary media,
delivering the brand stature worthy of a market leader.
Fig. 12: Activia's media 2010
spend/channel (Source: MEC)
Media
placements built relevance. TV was placed in key 'talkable' slots and strong
daytime programming. Posters were placed where busy women were most likely to
be i.e. train stations, bus stops and in proximity to supermarkets.
Maximising the Relevance of T.L.C.
Activia
were confident we had a strong, engaging creative vehicle and were working off
a strong insight which would deliver the necessary relevance to a broader audience.
However,
we knew we could increase relevance further by launching the campaign at a time
when more tummies were gurgling for T.L.C, and when women were most likely to
be considering their future health and happiness... New Year
This
contextual insight was confirmed by research;
- "I always think,
new year, new start"
- "By New Year I'm thinking about sorting
myself out"
(Source: Movement TLC Creative
Development Research, 2008)
So
New Year was when Activia launched T.L.C. (Fig. 13)
Fig 13: Activia
TLC Launch
Example of creative flexibility (Fig. 14), delivering a
variant and taste message.
Fig. 14: Activia Intensely Creamy
(variant & taste)
By
Summer 2010, Activia had successfully overtaken Müller Corner. Acting as market
leader, we encouraged consumers to make this the 'Summer of T.L.C and were
confident enough to make great taste our lead message.
Summary
of Comms Approach
Fig. 15: Activia's 2010 Communications
Approach (Source: RKCR)
Business
Results
The brand’s agency had been tasked to grow Activia to number
one in market. Activia needed to achieve a minimum value growth of 7%, worth an incremental £13m, by driving
penetration 3.5 points to 38%, equating to 900k new customers.
After the launch of the T.L.C. campaign penetration significantly
increased (Fig. 16).
Fig. 16: Activia's household
penetration vs. actual TVRs in 6 month increments (Source: AC Nielsen, April 2009-January
2011, 52wk rolling data; MEC actual TVRs. (Note: Activia only buy data for the
past 3 years which is why a 12 month pre comparison wasn't able to be made))
A
more granular look (Fig. 17) shows that Activia met the 38% target 2 months
ahead of plan, finishing the year a point ahead, attracting 1.2 million new
customers (versus 900k target).
Fig. 17: Activia's household penetration vs. actual
TVRs (Source: AC Nielsen,
April 2009-January 2011, 52wk rolling data; MEC actual TVRs.)
As
a result, value sales (Fig. 18) also saw a significant rise:
Fig. 18: Activia's total market value
sales (4 weekly rolling)
(Source: AC Nielsen, April 2009-January
2011. (There is a seasonality factor to the CYD market. Due to only being able
to get 3 years data we can't show all of 2009 vs. 2010. However, the Christmas
dip in 2010 is still £1.65million higher than in 2010.))
Activia
beat its 7% increase in value sales target by 1.9 points, delivering
incremental sales of £20.1 million, (£7.1m above target). Müller Corner
performed less strongly than expected, but even if it had grown at its
2008-2009 rate, Activia would have still edged ahead (Fig. 19).
Fig. 19: 2009 vs. 2010 Value Sales (Source: Nielsen)
The
increase in value sales meant Activia increased its value share by 7% whereas Müller Corner
remained static; this enabled it to take its position as market leader (Fig. 20)
Fig. 20: Value Share of Chilled Yogurt
& Dessert Market 2009 vs. 2010 (Source:
Nielsen)
Activia's
growth outperformed the market, even though it grew by 1.7%, instead of a
projected 1%. (Fig. 21)
Fig. 21: CYD Value Sales 2009 vs. 2010 (Source:
Nielsen)
Summary of Business Results
Fig. 21b: Summary of Activia's 2010
business results (Source: Nielsen
& RKCR)
The
Impact of Advertising
Activia have demonstrated a step-change in penetration and
value growth concurrent with the launch of T.L.C. They then proceeded to prove
that advertising was the key driver of this change by:
- Demonstrating
that advertising worked as intended
- Using
econometric modelling from OHAL to precisely identify the contribution of
advertising
Activia and their
marketing/advertising agency also underwent the exercise of eliminating other
factors using a range of sources. However, OHAL's model has an R2 of 99% which proves all significant factors have been
accounted for.
The advertising has worked as intended
Activia successfully changed
the behaviour of over 1.2 million UK consumers, but had communications
made the attitudinal shifts identified?
For advertising to have made
these shifts, it had to be noticed. Brand tracking demonstrated that Activia's
communications awareness increased by 28% over 2010 (Fig. 22).
Fig. 22: The % Women who were aware of
Activia advertising December 2009 vs. January 2011 (Source: Millward Brown. Base 320 women.
Statistically significant to 95% confidence level.)
The
media efficiency (spend/awareness) increased slightly Y-O-Y (Fig. 29) which
suggests the increase wasn't solely down to spend.
Fig. 23: Media efficiency 2009 vs.
2010 (Source: Millward Brown
& MEC)
Whereas
the previous testimonial campaign struggled to engage consumers, the T.L.C.
campaign had no problem, performing 29% better. (Fig. 24)
Fig. 24: Average Activia Engagement
Score 2009 vs. 2010 (Source:
Millward Brown. Base 320 women.)
Engagement
and awareness of T.L.C. helped drive relevance by 26%. (Fig. 25)
Fig. 25: The %
Women who agreed, 'Activia is for people like you December 2009 vs. January 2011 (Source:
Millward Brown. Base 320 women. Statistically significant to 95% confidence
level.)
Perceptions
that Activia maintained digestive health also increased (Fig. 26).
Fig. 26: The % Women who agreed,
'Activia helps maintain digestive health', December 2009 vs. January 2011 (Source:
Millward Brown. Base 320 women. Statistically significant to 85% confidence
level)
Taste
perceptions improved by 8% (Fig. 27).
Fig. 27: The % Women who agreed, 'Activia is great tasting' December 2009 vs. January 2011 (Source:
Millward Brown. Base 320 women. Statistically significant to 85% confidence
level)
A
key aim of the campaign had been to increase the number of women who'd consider
giving themselves some T.L.C. Consideration over the period increased by 27%
(Fig. 28).
Fig. 28: The % Women who agreed, 'I
would consider Activia December 2009 vs.
January 2011 (Source: Millward
Brown. Base 320 women. Statistically significant to 95% confidence level.)
In
summary, all attitudinal measures improved over the T.L.C. campaign period:
Fig. 29: Summary of attitudinal shifts
towards Activia (Source: Millward
Brown & RKCR)
Penetration
increase is the best proof of actual trial but claimed trial also increased,
with an uplift of 17% (Fig 30):
Fig. 30: The % Women who agreed, 7 have tried Activia' December 2009 vs.
January 2011 (Source: Millward
Brown. Base 320 women. Statistically significant to 95% confidence level.)
The Shift in Relevance
made Activia increasingly perceived as a Market Leader
Significant
improvement in relevance is corroborated by BAV.
Due
to the survey's scale it's not run every year but data from 2008 vs. 2011 is
available which provides a good indicator of campaign impact.
It
shows Activia grew from 64.2nd ranked percentile to the impressive 80.4th percentile out of 1,500 brands. Importantly, broadening
relevance wasn't at the cost of distinctiveness, which grew to the 86.1st percentile (Fig. 37), making Activia in the top 20% of all UK
brands on these measures. Impressive for a lowly yogurt pot.
Fig. 31: How UK female perceptions
have shifted across 4 key brand health measures (Source: Y&R UK. Base 1,856 women in
2008, 815 women in 2011. Statistically significant to 99% confidence. Note due
to the sale of study it isn't run every year but the 2008-2011 time frame gives
Activia an idea of perception shifts during the campaign.)
This growth meant Activia had strongly consolidated its
position in people's minds as market leader (Fig. 32)
Fig. 32: BAV Power Grid showing,
Activia increasing in market-leader perceptions (Source: Y&R UK. Base 1,856 women in
2008, 815 women in 2011.)
This
put Activia ahead of many other well known FMCG brands, many of which were now
considered mass market rather than market leading, and in the company of 'super
brands' such as Apple, Dyson and Coca-Cola. It also put Activia ahead of Müller
Corner. (Fig. 33)
Fig. 33: Perceptions of Activia vs.
other market leaders (Source: Y&R UK. Base
1,856 women in 2008, 815 women in 2011.)
This
consolidation as market-leader is important because the Powergrid relates to
future financial growth (Fig. 34). 'Leadership' brands have a much higher projected
growth versus 'mass market'.
Fig. 34: Multiple of intangible value
per unit sale (Source: Y&R)
Econometrics
Econometric modelling has been used
to identify and accurately quantify the effect of advertising and other
relevant factors on Activia's sales.
The fit of the model is very strong
with an R2 of >99%.
OHAL have supplied us with the
incremental uplift figures which take into account the full impact of
advertising. It looks at the campaign period, but also includes the longer term
impact of the advertising with a cut off period of 52 weeks.
The model demonstrates that the 2010
T.L.C. campaign drove an incremental uplift of £58.6million revenue from sales
of Activia.
Confidentiality prevents Activia from
publishing actual gross profit. So, as in the previous 2008 IPA paper, the
brand’s researchers have used an average margin for this category as a proxy to
help us establish whether the advertising was profitable for Danone. OHAL's
experience in this category indicates that it is reasonable to assume a gross
profit margin of 33% which gives us an incremental profit of £19.5million.
Minus the total marketing cost
(production, media spend and agency fees) of £15.9million, the end campaign had
generated £3.6 million incremental profit.
So, for every pound spent,
advertising generated a profit of £1.23 (Fig. 35).
Fig. 35: TLC's 2010 Return on
Marketing Investment (Source:
OHAL & RKCR)
Conclusions
& Wider Learnings
1)
Market leaders differentiate themselves
both emotionally and functionally
This
case shows how it's possible to develop powerful emotional platforms that
resonate widely with consumers, but still retain the functional product truth
that is at the heart of a brand's original differentiation. For Activia, this
ensured a solid platform for continued growth and market leadership. As the
client commented,
"Launching the T.L.C. campaign successfully ensured Activia's
position as market leader and gave us a great platform to build from for the
future" - Corinne Chant, Marketing Director of Danone UK.
2)
Behaving like a leader can make you a
leader
Activia
were ambitious enough to go for No.1 slot, and brave enough to move on from a
highly successful but ultimately limiting functional communications approach.
Like a leader they adopted a more emotional platform, and they supported that
platform with the media investment and behaviour of a leader.
3)
Driving trial with new users is a
powerful engine of growth for high quality products
When
you know you have a product that performs very well for people, sometimes all
you have to do is overcome the barriers that prevent new people trying it.
