Report on the effectiveness of Y2009 Lowenbrau national promo

Löwenbräu Y2009 Oktoberfest promotion

PromoIndex™ Sample report on promo effectiveness

Löwenbräu Y2009 Oktoberfest promotion — Bojole PromoIndex™ sample report 2

A welcome note

For most beer producers in Russia promotion activities account for a considerable part of total marketing spends. In Y2009 spring to autumn season 17 national-level campaigns have been carried out in beer category; in June 12 promotions were run simultaneously. It’s a time when it is becoming more and more difficult to get a consumer attention and succeed in getting a positive ROI.

With this in mind, Bojole research – an expert in promo measurement – in Y2009 initiated a massive consumer research among Russian beer consumers with a specific objective to evaluate all the promotions in the category. The study was conducted on a continuous basis April-09 to October-09 covering the most heavy season in promo activities of beer producers.

Attached is the report summarizing performance of one of the beer promo campaigns - Löwenbräu Oktoberfest national promotion. We are sharing this sample report on a free basis with all beer producers. Similar analytical reports could be purchased for any beer brand under promotion in Y2009.

The standard report covers promotion performance compared to industry norms in terms of traditional metrics (awareness level, participation level, overall likeability, uniqueness, relevance, ease to understand, trustworthiness, word-of-mouth and fit to brand, prizes relevance and uniqueness) as well as three exclusive Bojole PromoIndex™ metrics developed to measure ROI: incremental volume generated by a promotion, sources of incremental volume and derived importance of promo prizes.

We hope you enjoy this report. Please feel free to give feedback on this study, as we will continue this in Y2010 and want to make sure that it is addressing the needs of all our clients and partners.

Alex Lomizov, Research Director For more information please contact me at: [email protected] or +7 495 662-8928 ext.101


Contents

Executive summary 4

Promotion details 7

Awareness, participation and business effect Promo awareness, participation, intention to participate Incremental volume in transactions and per cent of sales volume Modeling at 30%, 40%, 50% awareness levels Sources of incremental volume

9

Promo performance Overall liking, Uniqueness, Relevance, Ease to understand, Trustworthiness, Word-of-mouth, Fit to brand

21

Performance of promo prizes Overall liking, Uniqueness, Relevance, Mechanics liking Derived importance of promo prizes

38

Methodology 49

Terms referenced in the study 50

Contacts 51


Executive Summary (1/3)

For details, see slide:

—  Löwenbräu promotion has started under strong competitive pressure —  Four more beer promotions were launched the same week —  Thirteen promotions overlapped with Löwenbräu within May-June

—  As a result of promo efforts, 28% of May-June Löwenbräu sales could be attributed to the Oktoberfest promotion

—  Business effect is at average level in volume terms —  Keeping in mind size of the brand the outcome is substantial, though far below

the best results demonstrated by … and … —  Incremental has been mainly sourced from Baltika 3, Heineken and Stary Melnik

—  Löwenbräu promotion achieved 17% awareness at national level —  This is below average observed in May-June and far below three leading

promotions (17% vs. 45%-48%) —  Lower awareness resulted in rather low participation (1%) —  However, those who are aware of the promo show participation and participation

intent rates comparable to the leaders; therefore, lack of awareness is the major weakness of the promotion

—  Worth to note, participation intent rates among those who are aware are flat across gender, age and cities groups

7

16 19 18

10 12 15 14



For details, see slide:

—  In terms of concept and execution Löwenbräu promotion performs rather well, achieving industry average level with most indicators:

—  Excellent connection with the brand (78% Top2Boxes vs. 73% avg) —  Acceptable relevance and trustworthiness

(relevance: 36% Tob2Boxes vs. 33% avg; trustworthiness: 50% Top2Boxes vs. 49% average)

—  As for the prizes, six-packs appeared to be the main drivers for participating in the promotion; in terms of attractiveness Löwenbräu six-packs are ranked 7th among all 61 secondary prizes across all Y2009 promos

—  At the same time the main prize—trip to Oktoberfest—which have been used as a core of Löwenbräu promotions for several years, lacks relevance and uniqueness

—  Main prize performance obviously constrains overall promo performance; having the main prize perceived outdated, the promotion concept as well lacks novelty and uniqueness

37 35 29 31 47 44 42 25



—  Löwenbräu has to reinvent and redevelop Oktoberfest concept which is the core of current promotion and of the main prize. Traveling in general and travel to Oktoberfest in particular becomes less and less exciting and unique, and therefore less capable to inspire consumers and generate incremental sales.

—  Beer per se is the obvious winner in relevance for a beer consumer. Besides, the major source of Löwenbräu six-packs success as secondary prize in Y2009 promotion is the unique size of the prize (180 cans and 600 cans) and reasonable prize pool. Therefore, this design could be recommended for further promotions.

—  High promo awareness is the key to achieve high incremental volume. Awareness is a weak point of Löwenbräu Y2009 promotion. Incremental modeling shows that even with current concept and execution awareness uplift of 13pts would have doubled incremental volume, awareness uplift of 33pts would have increased incremental by four times.

—  Early start of a promotion is a clear advantage under heavy competitive pressure. And each week matters. While planning a promotion for a heavy season, creative media communication and up-to-date and unique concept/prizes become of a particular importance.


44 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 15 14

Sep Aug July June May Apr Oct 24 23 22 21 20 19 18 17 16

Stary Melnik

Klinskoe

Baltika 3

Kaltenberg

Zlaty Bazant

Stella Artois

Tuborg

PIT

Bavaria

BagBier

Carlsberg

Ochakovo

Tolstyak

Brahma

Löwenbräu

Sibirskaya korona

Velkopopovicky kozel

17 on-season promotions have been running in Y2009


Description of Löwenbräu Oktoberfest promo

Timing

SKUs under promo

Löwenbräu main prize

Secondary prizes

01.05.2009 till 30.06.2009

Glass bottle 0.5l

Prize: 7-days trip to Oktoberfest (Munchen) for two persons Mechanics: Collect max codes

Prize: Branded mug Mechanics: Collect & get (30 codes) Prize pool: 4 500 prizes

Prize: Branded T-shirt Mechanics: Collect & get (50 codes) Prize pool: 2 000 prizes

Prize: 30 Löwenbräu six-packs Mechanics: Contest (internet game) Prize pool: Draw each week

Prize: 100 Löwenbräu six-packs Mechanics: Contest (internet game) Prize pool: Draw once at the end of promo

Prize: 100RUB on mobile Mechanics: Collect & get (collect 20 codes among first 500) Prize pool: 500 winners each week

Awareness, participation and business effect


Promo awareness A performance comparison to industry norms

0%

10%

20%

30%

40%

50%

60%

June-09

18%

May-09

16%

Max level: 48% Max level: 45%

Min level: 9%

Min level: 15%


Promo awareness A performance within subgroups

0%

10%

20%

30%

40%

50%

60%

18% 17% 14%

18%

25-34 YO

19%

35-45 YO

16%

Capitals

18%

Regions

17%

18-24 YO Females Males Total sample


Promo participation A performance comparison to industry norms

Max level: 4% Max level: 3%

0%

5%

10%

15%

20%

June-09

0,3%

May-09

1,4%

Base: all beer consumers


Promo intention to participate A performance index comparison to industry norms

Max level: 22%

Max level: 18%

30%

20%

10%

0%

June-09

6%

May-09

14%

5%

15%

25%

Min level: 5%

Min level: 8%

Base: aware of Löwenbräu promo


Promo intention to participate A performance index within subgroups

0%

10%

20%

30%

10%

Total sample

11%

Males

10%

Females

11%

18-24 YO

8%

25-34 YO

11%

35-45 YO

11%

Capitals

9%

Regions

Base: aware of Löwenbräu promo


Awareness and participation in May-June A performance comparison to industry norms

Participation among

aware of promo

Promo awareness

Sibirskaya korona

17%/5% Löwenbräu

Industry avg. in May-June

Industry avg. in May-June


Incremental volume generated by promo campaign in average number of transactions per beer consumer per month

0,310,09

0,22

Total Löwenbräu

volume (May-June)

Löwenbräu incremental

volume

Löwenbräu base

volume (May-June) due to Oktoberfest

promotion

Löwenbräu Oktoberfest promotion has generated incremental volume of 0.09 transactions per beer consumer per month that accounted for 28% of total Löwenbräu sales in May-June


Löwenbräu incremental volume estimation at 30%, 40% and 50% awareness levels

0,22 0,22 0,22 0,22

0,28E

0,42E

Base volume

Incremental volume

0,59E

0,37E

0,50E

0,09 0,20E 0,31

50%40%

30%17%

Awareness

Actual achieved

in May-June

E E E

Total volume

The modeling provides estimation of potential ROI on media spends.

At 30% promo awareness Löwenbräu could always double base volume in May-June.

At 50% awareness Löwenbräu promo could increase brand sales volume in May-June almost three times.


Sources of Löwenbräu incremental volume

Base volume

Incremental volume

Löwenbräu volume in May-June

0,31

0,22

0,09

27%20%

Baltika 3

37% Other

17%

Heineken

Stary melnik

Total volume


Promo Incremental Volume in transactions A performance comparison to industry norms in May-June

0,010,03

0,06

0,090,11

0,29

0,32

May-June Industry avg

0,13

Löwenbräu


Promo Incremental Volume as % of total brand sales A performance comparison to industry norms in May-June

17%

28%32%

41%46%

56%57%

May-June Industry avg

40%

Löwenbräu

Promo performance


Promo overall likeability A performance comparison to industry norms

52%

Industry avg 53%

Max 63%

Löwenbräu

Min 42%

Top2Boxes on 5-point scale


Promo overall likeability A performance within subgroups

Top2Boxes

Top1Box 5%

52%

Total sample

6%

55%

Males

4% 6%

51%

25-34 YO

6%

50% 53%

3%

Females

46%

4%

52%

Regions

52%

6%

Capitals 35-45 YO

18-24 YO

5-point scale


Promo overall likeability A performance compared to industry average in subgroups

-5pts

-4pts

-9pts

-8pts

-4pts

-7pts

Capitals Regions

Males Females

18-24 YO 25-34 YO 35-45 YO

Light users Medium users

+4pts Heavy users

Low income +8pts Mid-high income

Secondary education High education

Married Single


Promo uniqueness A performance comparison to industry norms

67%Löwenbräu

Industry avg 61%

Max 78%

Min 42%



Promo uniqueness A performance within subgroups

Top1Box

Top2Boxes

Regions

64%

7%

Capitals

71%

17%

35-45 YO

69%

13%

25-34 YO

67%

8%

18-24 YO

65%

15%

Females

61%

13%

Males

70%

11%

Total sample

67%

12%

55%

5-point scale


Promo relevance A performance comparison to industry norms

36%

Industry avg 33%

Löwenbräu

Max 41%

Min 24%



Promo relevance A performance within subgroups

Top1Box

Top2Boxes

Regions

9% 2%

Males 18-24 YO

Capitals

36%

5%

Total sample

33% 36% 39%

30%

40%

25-34 YO

30%

Females

44%

7% 3% 6% 5% 4%

35-45 YO

5-point scale


Promo ease to understand A performance comparison to industry norms

78%

Min 72%

Löwenbräu

Max 81%

Industry avg 77%



Promo ease to understand A performance within subgroups

21%

78%

Total sample

23%

74%

Males

17%

84%

Females

69%

35-45 YO

30%

88%

Capitals

12%

69%

Regions

Top2Boxes

Top1Box

77%

18%

18-24 YO

86%

24% 20%

25-34 YO

5-point scale


Promo trustworthiness A performance comparison to industry norms

50%

Industry avg 49%

Löwenbräu

Min 38%

Max 58%



Promo trustworthiness A performance within subgroups

Males

10%

51%

Females

12%

49%

18-24 YO

11%

49%

63%

39%

Top1Box 20%

Capitals Regions 35-45 YO

25-34 YO

4%

Top2Boxes

11%

46%

Total sample

50%

11%

53%

12%

5-point scale


Promo word-of-mouth A performance comparison to industry norms

23%Löwenbräu

Industry avg 24%

Min 15%

Max 35%



Promo word-of-mouth A performance within subgroups

5%

24%

Males

5%

20%

Females

5%

28%

9%

35%

Capitals

2%

35-45 YO

5%

23%

Total sample

6%

25-34 YO

21%

Top2Boxes 12%

Regions

Top1Box 4%

18-24 YO

19%

5-point scale


Promo fit to brand A performance comparison to industry norms

78%

Min 50%

Industry avg

73%

Löwenbräu

Max 82%



Promo fit to brand A performance within subgroups

Total sample

76%

Males Females 18-24 YO

25-34 YO

19%

76%

35-45 YO

24%

79%

21%

Capitals

78%

20% 20% 26%

76% 81%

17%

80%

Top1Box 15%

Top2Boxes

76%

Regions

5-point scale


Promo performance Summary of key indicators vs. industry average

Löwenbräu performance vs. industry average

Löwenbräu place in rating

Overall likeability, Top2 -1pts 9th out of 17

Uniqueness, Top2 +6pts 5th

Relevance, Top2 +3pts 7th

Ease to understand, Top2 +1pts 6th

Trustworthiness, Top2 +1pts 7th

Word-of-mouth, Top2 -1pts 10th

Fit to brand, Top2 +5pts 5th

Performance of promo prizes


Löwenbräu main prize—trip to Oktoberfest Summary of key indicators

Top1Box

Top2Boxes

Mecha- nics

liking

53%

21%

Rele- vance

74%

34%

Unique- ness

86%

48%

Overall liking

47%

81% Top2 Industry avg: 86%

82%

52%

82%

5-point scale


Löwenbräu main prize liking A performance comparison to industry norms

82%Löwenbräu

Max 93%

Min 68%

Industry avg

86% Top2Boxes on 5-point scale


Löwenbräu main prize A performance within subgroups

84%

Males

42%

78%

Females

47%

89%

18-24 YO

51%

80%

25-34 YO

41%

74%

47%

82%

Total sample

50%

35-45 YO

57%

84%

Top2Boxes

Top1Box

Regions Capitals

79%

39%

5-point scale


Löwenbräu main prize relevance & uniqueness A performance comparison to industry norms

Löwenbräu

Relevance, Top2boxes

Tolstyak PIT

Uniqueness, Top2boxes

74%/86%

Zlaty Bazant

Industry avg.

Industry avg.


Löwenbräu secondary prizes Summary of key indicators

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

12% 100RUB on mobile 50% 13%

30 beer packs 72% 29% 100 beer packs 38%

42% T-shirt

63% 52%

27% 26% 27%

100 beer packs 30 beer packs

100RUB on mobile Mug

T-shirt

27% 21%

9% 9% 12%

64% 64%

54% 47%

41%

27% 100 beer packs 30 beer packs


T-shirt

25% 17%

15% 16%

54% 54%

52% 51%

Top2Boxes

100 beer packs 30 beer packs

Top1Box

Mug 13%

46%


T-shirt

19% 18%

16% 14% 13%

76%

Liking

Uniqueness

Relevance

Mechanics liking

Top2 industry avg: 55%

45%

55%

48%

5-point scale

47%


Löwenbräu secondary prizes liking A performance comparison to industry norms

42%

46%

50%

72%76%

Min 28% Industry avg

55% Max 83%

T-shirt

Mug

100RUB on mobile

30 beer packs

100 beer packs



Löwenbräu secondary prizes relevance & uniqueness A performance comparison to industry norms

Relevance, Top2boxes

Uniqueness, Top2boxes

T-shirt Mug

100RUB on mobile

30 beer pack

100 beer pack

Industry avg.

Industry avg.


Löwenbräu secondary prizes A performance within subgroups

Total sample Males Females 18-24

YO 25-34

YO 35-45

YO Capitals Regions

100 beer packs 76% 86% 58% 74% 76% 78% 80% 72%

30 beer packs 72% 82% 55% 73% 72% 72% 77% 68%

100 RUB on mobile 50% 51% 48% 57% 51% 39% 56% 45%

Mug 46% 51% 36% 49% 46% 41% 58% 36%

T-shirt 42% 49% 29% 45% 45% 31% 54% 31%



Derived importance of promo prizes Contribution of each prize into generation of incremental volume

Incremental volume generated by Löwenbräu

Oktoberfest promotion

Main prize— trip to Oktoberfest

39%

Beer six-packs (100 and 30)

43% Mug,

T-shirt 10%

100 RUB on

mobile 8%

Appendix: Methodology Terms referenced in the report Contacts


Methodology

Method: Face2face in-home interviews Random route sampling Continuous data collection on weekly basis Fielding occurred 13/04/09 – 08/11/09

Sample: 4510 interviews Minimum 150 interviews per week Beer consumers aged 18-45

—  30% are 18-24YO, 40% are 25-34YO, 30% are 35-45YO

—  60% are male, 40% are female

—  Capitals (30% live in Moscow, 17% in St.Petersburg) and regions (13% live in Ekaterinburg, 13% in Samara, 13% in Novosibirsk, 13% in Rostov-on-Don)

—  23% are heave users (drink beer min 3 times per week), 47% are medium frequency users (1-2 times per week), and 30% are light users (less than once a week)


Terms referenced in the report

Promo or promotion: a national-level promo campaign with prize draws stimulating product purchase communicated on pack, in-store, in media (e.g. TV, radio, press, outdoor, internet)

Promo awareness: a number of respondents who when exposed to a color card which presents a promo concept, prizes visuals, name, slogan and a pack under promotion, recalled that they were aware of a promotion

Participation: a number of respondents who recalled that at the moment of interview they have already been involved into activities required by a promo rules to be qualified for a prize draw, i.e. registering promo codes via SMS or Internet or participating in creative contest

Intention to participate performance index: a number of respondents who are likely to participate in a promotion calculated upon standard 5-point intention scale

Transaction: single purchase occasion of a brand

Brand volume in transactions: an approximation of total number of transactions with a brand occurred per month divided by total number of beer consumers

Total brand volume: an approximation of brand volume achieved in a given month

Base brand volume: an approximation of brand volume in a given month which would have been achieved if there were no promotion running in this given month

Incremental brand volume: a difference between total brand volume and base brand volume in a given month; i.e. net volume attributed to an effect of a given promotion in a given month


Contacts

Bojole research have prepared similar reports for each of 17 beer promotions which have been running in Y2009. If you would like a copy of this report or if you have any questions or comments about this research report or if you would like to purchase a report on another promotion, please feel free to contact us:

Alexander Lomizov +7 (495) 662 8928 ext.100 +7 (909) 911 9570 [email protected]

Olga Makarova +7 (495) 662 8928 ext.102 +7 (909) 993 1058 [email protected]

Report on the effectiveness of Y2009 Lowenbrau national promo

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