An introduction to Focus Group China

Shanghai headquartered China-wide market research

@focusgroupchina

Jonathan_axup

Jonathan.axup@focusgroupchina.com

www.linkedin.com/companies/focus-group-china

2

Introduction to DDMAThe facts

Founded in 2002 Independent full service agency with

qualitative focus and quantitative service with DDMA Market Research

Headquartered in Shanghai with coverage across 20 cities in China

Clients include major multinationals, with particular strength in FMCG and retail

DDMA works closely with Chinese companies such as Shanghai Sports Lottery and baijiu brands

3

Introduction to DDMA Business UnitsFocus Group China is part of DDMA Group

Focus Group China: One of largest independent qualitative research networks in China. Provides international standard research at independent agency prices. Highly experience moderators, and excellent facilities in all major China markets. (www.focusgroupchina.com)

DDMA Market Research:Provides clients quantitative consumer, trade and retail distribution research across China and Asia Pacific. DDMA Market Research is best able to recruit and quantitatively research decision makers and consumers. (www.ddm-asia.com)

DDMA Business Consulting: Led by a highly experienced management team of people with Fortune 500 experience our team consults on: market entry, corporate restructuring, business development and joint venture formation. Clients include private equity companies, finance groups and large scale brand owners.

4

Qualitative Research Capabilitieswww.focusgroupchina.com

DDMA in-house qualitative unit Focus Group China provides our clients the following services:

Focus Groups Mini Focus Groups In-Depth Interviews Buddy Groups Observational and Mystery Shopping

5

Qualitative Research Capabilitieswww.focusgroupchina.com

Our qualitative team of moderators are highly experienced and employ some of the most advanced projective techniques.

Our recent qualitative projects include: Online Purchase Behavior Studies Brand Positioning and Repositioning Studies Communication and Advertising Evaluation and Testing Concept Screening and Testing Customer Needs Mapping Industry Process and Performance Mystery Shopping New Product Development Senior Management/Executive Interviews

6

Qualitative Research Facilities across ChinaMost advanced facilities in Shanghai and coverage across China

Focus Group China research facilities across China offer clients:

Spacious city-center focus group rooms

Seamless online viewing system allows clients to observe and interact with focus groups in real-time from anywhere in the world

Large capacity client viewing rooms with one-way mirror and comfortable client lounges with refreshments

Shanghai headquarter facilities are the most advanced in the market, and are fitted with high-end Logitech and Sony AV equipment

7

Quantitative Consumer and Trade Researchwww.ddm-asia.com

DDMA Market Research provides data collection capabilities, and conducts large scale consumer, trade and research projects across China, and in other Asian markets. DDMA Market Research uses a variety of different methodologies in our data collection operations including :

Telephone Interviewing Face-to-Face Interviews via Central Location,

Door-to-Door, and Street Intercept Mail & Online Surveys Hall Test

8

Quantitative Consumer and Trade Researchwww.ddm-asia.com

Recent quantitative research projects conducted by DDMA Market Research include:

Retail and Channel Evaluation Studies Retail Audits Retail Census Brand Usage and Awareness Studies Brand and Product Switching Studies Concept Test Taste Test Packaging Test Advertising Test

9

Full China CoverageWe manage research across China from 21 Research Centers

We conduct research in:Shanghai Headquarters

BeijingChangsha Chengdu Chongqing Fuzhou Guangzhou GuiyangHangzhou Hefei Jinan

Kunming Lanzhou Nanjing NingboQingdao ShenyangShenzhenTianjin Wuhan Xiamen

10

Our Industry ExperienceWe bring China experience in these industries with particular strength in FMCG and Retail

Consumer Products

Banking & Finance

Food & Beverage

Retail & Hotel

Healthcare

11

China Alcohol ResearchDDMA is highly prominent in China alcohol market research and business consultancy

Our team provides a full range of consumer, retail, distribution, market research as well as business consulting to many leading international and Chinese alcoholic beverage companies. Our client experience includes:

DDMA China Online Influence Report Online Supermarket report is designed to supplement earlier publications by DDMA

A year-long consumer research report

Data Driven Marketing Asia512 consumer interviews to quantify popularity of online channels and websites

Focus Group China28 consumer focus groups to understand how they collect information online for purchases

Product Categories Covered

3G and Smartphone HandsetsConsumer Electronics PCs and PeripheralsTravel and Tourism

Cosmetics and SkincareMovies and Cinema

Social Places (Bars, Restaurants, KTVs)Fashion Clothing

Passenger Cars, Accessories, ServicesPrinted Books

Household FurnishingsHome Appliances

13

Online Supermarkets Study ShanghaiDDMA study into drivers and barriers of online supermarket usage

The No.1 Store

Taobao Online Supermarket

Lianhua OK Blemall

Dahuozhan

Auchan Online Supermarket

Quantitative and Qualitative Market Research Study Conducted in Shanghai in April 2011. A total of four focus groups with people that have used online supermarkets in last three months and 150 interviews conducted online with main household grocery buyers.

Research Objectives: To determine the:

1. Incidence of online supermarket usage among this affluent group of consumers

2. Drivers of online supermarket usage among this affluent group of consumers and general usage characteristics

3. Barriers to the usage of online supermarkets4. Identification of the opportunities and challenges

which online supermarkets present

14

DDMA in the NewsDDMA is regularly quoted in international media

May 18, 2011 – BloombergWal-Mart to ‘Actively Invest’ in China Internet Shopping

May 11, 2011 – BBC TV NewsOnline Retail takes off in China

April 22, 2011 – South China Morning Post:Online Supermarkets Take off in Shanghai

April 13, 2011 – Wall Street Journal:Burberry Stores in China Get Digital Makeover

Feb. 18, 2011 – The Independent: Web Plays Key Role in Shanghai Shoppers' Purchasing Decisions

 Jan. 31, 2011 – Financial Times:

High Spirits Lift Chinese Liquor Price 20%

15

DDMA Biography: FounderSam Mulligan

Sam Mulligan: Sam founded our company in 2002, and has over 15 years marketing research and consultancy experience in Asia Pacific. He has worked extensively across all key Asian markets with many of the world’s leading companies as his clients.

In 1996, while Sam was Director of Synovate Taiwan, his team was appointed to manage the Anheuser Busch marketing research programs in Taiwan. This was soon expanded to include Korea, Hong Kong, the Philippines and Japan. In 1997, Anheuser Busch expanded his responsibilities to include mainland China, and in mid-1997 he relocated to Shanghai to head up the Anheuser Busch China market research program. Sam has also worked extensively on new product development research across Asia Pacific for Johnson & Johnson and provided consulting services to a wide array of leading multinationals.

Sam is widely quoted in international media on research in China, including BBC TV News, Wall Street Journal, Financial Times, and more.

16

DDMA Biography: DirectorCarrie Yuan

Carrie Yuan: Carrie has over 12 years’ qualitative market research experience in China. Carrie has moderated over 900 focus groups across a wide range of categories in multiple markets around China including, finance products and technology products. Carrie has moderated and conducted qualitative research projects for companies such as Anheuser Busch, Diageo, V&S, Molson Coors, Jiannanchun and Independent Liquor.

Carrie started her career as a qualitative researcher at Synovate. In this period she accumulated rich experience in moderating and reporting. After four years she joined a 4A advertising company responsible for both internal and external research projects.

She joined DDMA in 2003, and is responsible for China operations, qualitative research projects, and plays a senior role in business-to-business research. Carrie directly supervises a team of qualitative researchers as well as playing a key role in business consultancy projects.

Carrie speaks Shanghai local dialect is also fluent in Mandarin and English.

17

DDMA Biography: Project ManagerJonathan Axup

Jonathan Axup: Jonathan brings over six years’ marketing and communications experience, including working for Citibank and well-known public relations firms in Shanghai and the B2B unit of Millward Brown in London.

He is originally from the UK, and delivers clients insights earned from many years of marketing experience in China. With this experience, he is able to fully understand the needs of marketing and research heads as well as business leaders doing business in the country. He has been quoted in media including South China Morning Post.

Jonathan is a native English speaker, and also speaks Mandarin and Japanese.

18

DDMA Biography: Research ManagerIvy Wang

Ivy Wang: Ivy has more than three years’ experience in qualitative research, and she has moderated over 100 focus groups and 50 in-depth interviews. With her advanced qualitative skills, she is able to extract deep insights from discussions, and her performance has won praise from many clients.

She was the lead field researcher on the Focus Group China and DDMA report into Chinese consumer online purchase behavior which was covered by media including BBC News and The Independent. Her client experience includes Transitions Optical, Jack Daniels, Jiannanchun and BNP Paribas.

She is a native Mandarin speaker and is fluent in English.

DDMA Case Study - V&S Group/Absolut Vodka New Product Development - China

19

Project Objectives: V&S(Absolut Vodka) commenced a project to identify potential opportunities within the Chinese domestic baijiu market.

Methodology: Focus Group China conducted extensive market and industry research among consumers, business leaders in producer and distributor companies and senior government officials. The result of this research was the identification of several key opportunities within the baijiu category. As the project moved forward DDMA Business Consulting held direct negotiations with over 20 leading baijiu producers. From this process three potential partners were identified. Negotiations progressed with one key company and a joint venture was formed in 2007. In addition, two new baijiu brands were developed, and are the property of the joint venture. The first of these is a super-premium baijiu that has won awards for taste and design. The second is a completely new type of baijiu for young drinkers.

Project Outcome: The joint venture has been successful in the development of new brand has demonstrated that the new brands have high potential in the market. These brands are imbedded in and sold through the Pernod Ricard China network.

20

Methodology: Our team identified three key markets. And then evaluated current sales operations in these markets , after which we designed a new approach to distribution, sales and marketing of lottery instant games. In addition, several joint promotional programs were designed and implemented.

Project Outcome: In the selected markets, sales of instant tickets have increased considerably and continue to expand.

DDMA Case Study – Scientific GamesDistribution Channel Consultation - Shanghai

Project Objectives: Scientific Games (SG) is the largest lottery management company in the world. SG established a joint venture with Chinese National Lottery to develop and sell instant scratch games in China. There was a strong need to revamp the existing distribution and marketing network in order to support sales.

21

Project Objectives: Objectives were to measure the perceptions and requirements of expatriates and their families in Shanghai on private health insurance and a range of local hospitals for ParkwayHealth to develop and position its health insurance.

Methodology: Our team held one-on-one interviews with expatriates from over 15 countries, including a full range of incomes, up to very high.

Project Outcome: We then determined final insurance pricing, positioning and package structure. In addition, we developed a strategy for providing insurance at local Shanghai hospitals.

DDMA Case Study - ParkwayHealthHealth Insurance – Shanghai

22

Project Objectives: Objectives were to measure the level of acceptance among Chinese consumers for Icelandic Glacial Mineral Water. We were also tasked with identifying preferred brand name, packaging and label design, acceptable price point, taglines and most compelling brand positioning and brand communication strategy for the brand. In addition, we were charged with measuring brand positioning relative to key competitors and identifying strengths and weaknesses relative to key competitors.

Methodology: We conducted a total of 24 focus groups were across four key markets. We recruited white collar respondents aged between 25 and 45 years old. All respondents were current buyers of premium bottled water.

Project Outcome: We determined final brand name and brand positioning as well as pricing strategy for various different SKUs.

Brand communication strategy was finalized as a result of this research and Icelandic Glacial was successfully launched in Shanghai and Beijing in mid-2010.

DDMA Case Study - Icelandic Glacial Mineral Water Brand & Packaging Evaluation – Shanghai, Beijing, Guangzhou , Chengdu

23

Project Objectives: Objectives were to Develop a new and fashionable baijiu for Chinese consumers, determine brand name, packaging, advertising concept, tagline design and price point for Purfeel 21. We were charged with measuring channels Purfeel 21 is perceived as being most suitable to be consumed in and on which type of drinking occasions Purfeel is most suitable for. We also were responsible for testing which flavor is most liked by Chinese consumers.

Methodology: We held 48 focus groups across four key markets. In addition, our team invited 150 respondents to Chinese restaurants for taste testing and perceived suitability testing. We recruited 300 respondents to participate in our online research.Target respondents were white collar consumers aged between 25 and 40 years old and drink baijiu at least once every three months.

Project Outcome: Our research determined final brand name, packaging, tagline and key advertising concept. Pricing strategy for on-premise and off-premise channels was completed. We determined most popular flavors among target consumers. Purfeel 21 was successfully launched in Shanghai market in December 2009.

DDMA Case Study – Purfeel 21 BaijiuBrand, Taste, Packaging & Advertising Evaluation – Shanghai, Beijing, Guangzhou , Chengdu

Product Concept, Brand & Packaging Evaluation, Taste Test – Shanghai, Beijing, Guangzhou , Chengdu

24

Project Objectives: Objectives were to identify an appropriate modern baijiu product concept that meets the needs of modern successful Chinese business people. We were tasked with measuring the acceptance of Tianchengxiang’s taste, packaging design and brand name. Our team was also responsible for testing the most suitable drinking occasions as well as ideal price relative to competitors.

Methodology: A total of 48 focus groups were conducted across four key markets. Target respondents were aged between 30 years old and 50 years old. All respondents were current premium baijiu drinkers and consume baijiu most often in business occasions.

Project Outcome: We determined target consumer insight, and based on this, the ladder of brand benefit, brand value and brand vision was developed.Final brand naming and packaging was determined. Pricing strategy for various different SKUs was determined. Brand communication strategy was finalized as a result of this research and Tianchengxiang was successfully launched in Chengdu in 2008.

DDMA Case Study – Tianchengxiang Baijiu

25

DDMA Case Study – Pop WeaverProduct Taste Test – Shanghai & Beijing

Methodology: We recruited 200 white collar consumers to attend a sensory test at our focus group facilities in Shanghai and Beijing. All were frequent consumers of concession popcorn aged between 20 and 35 years old. Also we researched 32 respondents for focus groups to test their consumption behavior and opinions of the test products.

Project Outcome: We determined the preferred taste and appearance profile.The product is going to be launched in China mid-2011.

Project Objectives: Our objectives were to identify the preferred taste profile for a concession popcorn in terms of overall flavor, butter flavor, crunchiness, and appearance, including kernel size. We were also tasked with identifying the ideal price level for on-premise consumption.

26

DDMA Case Study – WanglaoJiProduct Taste Test – Shanghai, Beijing & Guangzhou

Project Objectives: Our objectives were to identify the brand positioning and to forecast potential market size. We were also tasked with finding out a unique and appealing brand positioning relative to other key soft drink categories and functional drinks – to understand whether Wanglaoji should be positioned as a tea, soft drink or functional tea.

Methodology: We recruited and conducted 60 retailer and 30 trade interviews across 3 cities. The retailers were segmented into: mum and pop stores, convenience stores and supermarkets. Trade interviews were with wholesalers in the business of soft drink distribution.

Project Outcome: We helped confirm Wanglaoji’s product positioning, which was successfully re-launched in 2003.

27

DDMA Case Study – Anheuser-BuschMarket Entry - Vietnam

Project Objectives: Anheuser-Busch wanted to evaluate a series of entry options into the Vietnam beer market. These options included establishing a wholly owned subsidiary, working through an established importer or distributor or forming a joint venture with a large government owned entity.

Methodology: Focus Group China conducted a series consumer and trade research by including C-suite respondents in key markets across Vietnam to evaluate the strength of local partner’s operations and to determine how Budweiser would fit into existing brand portfolios and business operations.

Project Outcome: As a result of our research, Anheuser Busch launched in Vietnam in 2008 through an import and distribution agreement with the GANNON Distribution Company.

@focusgroupchina

Jonathan_axup

Jonathan.axup@focusgroupchina.com

www.linkedin.com/companies/focus-group-china