Insights into the Consumer Journey(A Structural Equation Modelling Approach)

Our Approach: Structural Equation Modelling

Structural Equation Modelling (SEM) is an advanced statistical technique that allows us to understand

the causal and co-varying relationships that exist between metrics within a traditional sales funnel

concept. Using SEM, we are able to test a series a pre-defined hypotheses, some of which were based

on findings from a media effectiveness modelling project. These were:

1. TV has not been very effective in driving sales volume for Brand X – it might be that the TV

messages and recall do not cut through to awareness.

2. Digital media does not drive brand awareness for Brand X as well as overall offline and mass-media

channels.

3. Intrinsic (experiential) brand attributes drive familiarity for brand X. This is thought to be a key

factor affecting product usage and considered a gateway to new customer acquisition.

4. Extrinsic (externally perceived) product attributes drive purchase intent (consideration) for Brand X.

5. Brand consideration drives Likelihood to recommend to family and friends, an indicator of brand

loyalty; and is generally thought of as a key gateway to product purchase.

6. Positively engaged Earned social media comments operate lower down the sales funnel and are

more directly linked to purchase compared to paid social media adverts and banners. [extended

model not included in this deck].

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Symbols used in SEM

SEM uses symbols to denote relationships between metrics.

Observed

Variable

(i.e. we have

survey data for

this)

Regression:

Causal

relationship

Regression:

Co-varying

relationship

This is an

interaction

that may or

may not be

synergistic

Unobserved

or “latent”

Variable

(a collection or

cluster of

observed

variables with

similar effects

& influence)

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Radio Communications

Recall

Newspaper Communications

Recall

Brand Awareness

Familiarity

From Path to Structural Equation Model

SEM uses Path Diagrams to illustrate relationships between data metrics. The model below is a very simple

illustration of how Radio and Print media are causally connected to brand familiarity. This relationship is

‘mediated’ by brand awareness. Radio and Print are also inter-connected and vary together in similar patterns.

We call this a pattern of covariance between Radio and Print recall.

Introducing an unobserved metric converts a path model into a structural equation model. Here we

structurally link a latent (unobserved) variable that is made up of three survey based brand attributes to

familiarity.

Co

-var

yin

g

Causal

Intrinsic brand

attributes

Cares for my skin

Comforting

Leaves skin fresh

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The Sales Funnel Concept we modelled using SEM is a representation of the customer journey

Creative Message

Liking

Media

Communications

Recall

Spontaneous

Brand Awareness

Brand Familiarity

Brand Purchase

Consideration

Data based on total sample (see appendix 2)

In this model we have

attempted to understand the

chain of transmission from

media message liking through

media communications recall,

awareness, familiarity and

measure of purchase intent

(consideration) and loyalty

(likelihood to recommend)

Consumer Journey Model

Brand

Experiential and

Image and

Attributes

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Likelihood to

Recommend to

family & friends

SPONTANEOUS AWARENESS

TV/CINEMA

RADIO

PRINT

INTERNET DISPLAY

OUTDOOR

SAMPLING & TRIAL

TV msg 1

TV msg 3

Message Liking/Activity

BRAND FAMILIARITY

PURCHASE CONSIDERATION

LIKELIHOOD TO RECOMMEND TO

FAMILY & FRIENDS

TV msg 4

TV msg 5

TV msg 6

IN-STORE

Kylie’s corner

TotalMedia Recall

Communications RecallBrand

Awareness

Protection I Trust

Keep you drier

Keep you smelling

fresh

Gentle on your skin

Makes you feel more

comfortable

Designed for best

Protection

Has attractive

Packs

Suits your lifestyle

Fashionable Brand

TV msg 2

SOCIAL MEDIA

MOBILE

MXIT

Brand Familiarity

Brand Consideration

Brand Recommendation

0.11

0.09

0.14

0.12

0.07

0.04

0.19

0.54

0.67

0.74

0.66

0.66

0.70

0.33

0.40

0.26

0.32

0.18

0.32

0.47

0.14 0.41 0.20

0.14

EMOTIONAL

EXTRINSIC

0.87 0.84 0.86 0.83 0.85

0.79 0.82 0.72 0.78

Outdoor = Billboards, Posters and Taxi Rank advertisingPrint = Magazines, newspapers, broadsheets, promo pamphletsSampling & Trial = Stokvels, Clinics, School sampling, sampling and school presentations

0.71

Model n = 3381 (Includes 2012, 2013 & 2014 Femcare Sample)MODEL FIT RMSEA: 0.041 (Good)

Sales Funnel SEM: Consumer Journey

In-store promotion

Advertising on the shelf

Stand alone display

0.30

0.13

0.43

Good Quality Better Price

0.20

ECONOMIC &VALUE

0.67 0.34

Effectively absorbs fluid

0.13

Always doing new things

0.85

0.66

0.62

0.88

Key Insights• TV message liking has been relatively weak in driving communication recall for TV across all campaigns.

– The two most recent TV campaigns (Messages 5 & 6) have been the least effective in driving communications recall for TV. This is consistent with findings from MMM (econometrics).

– Overall TV’s recall has been weak in driving total media recall.

– This has been a common theme across both MMM and SEM and indicates brand X needs to improve the copy effect.

• Outdoor media is the strongest driver of total media recall.

• In-store merchandising activity, namely shelf advertising and stand-alone display drive s in-store recall and strong brand recall. There is a co-variance [synergy] between shelf advertising and stand-alone display.

• Overall traditional media has been more effective in driving total media recall than digital media channels.

• Total media recall drives spontaneous brand awareness which drives product trial and usage (familiarity with brand X)

• Emotional brand attributes such as it 'keeps you drier', 'gentle on skin' and 'effectively absorbs fluid' are strongly associated with brand familiarity.

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Key Insights

• Brand Familiarity is a driver of purchase consideration for brand X. Brand X’s outward appeal (Extrinsic) in terms of

innovation, pack design and fashion drive purchase consideration. These factors are the gateway elements to purchase

consideration and purchase.

• There is a strong link [covariance] between total media recall and the salient ‘Extrinsic’ concept. This could due to the

inclusion of in-store advertising which focused on ensuring a presence on shelves with bright colours.

• Purchase consideration is a core driver of likelihood to recommend to family and friends, a key measure of loyalty. Another

important driver of ‘Likelihood to recommend’ is the concept of ‘Economy and Value’ which is largely driven by quality and

to a lesser degree perceptions of price. The ‘Economic’ concept is strongly linked to the Emotional concept.

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Masood Akhtar

Managing Partner, (EMEA)Bottom Line Analytics GlobalE: ma@bottomlineanalytics.comM: +44 7970 789 663

www.bottomlineanalytics.com