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Thursday, May 27, 2010

What's your Skuuber Score?

Your Skuuber Score™ is a powerful indication of net retail sales potential for your product.

It is based upon a combination of survey research, database category usage norms and predictive modeling using our proprietary algorithms.

A Skuuber Score™ of 837, in this example, means that the potential exists for $837 of net retail dollar sales of your product for every 1000 US consumers. Keep in mind that this is an indication of potential and not a sales forecast as such.

Actual, in-market performance is the result of distribution, merchandising, consumer awareness, actual trial and consumer satisfaction, competitive activity, marketing and promotion plans and a host of similar variables.

Things that affect a Skuuber Score™ include the following:

· Uniqueness and value
· Trial intent and repeat norms
· Category size and usage
· Purchase frequency norms

Products that compete in large, frequently purchased categories will tend towards high Skuuber Scores, while specialty items in small or seasonal categories will score lower. Therefore, category size is an important consideration in determining the potential of a new business opportunity.

Skuuber Scores have ranged from 255 - 1258; from niche players to products with true blockbuster potential.

How will your items perform? Are your investments sized according to market potential?

Making consumers fully aware of your product and achieving meaningful distribution to them is an enormous challenge. It is assumed that your product lives up to expectations and that it will generate repeat purchases from those trying it. It takes a lot of work and investment for products to become successful and to reach their potential.

Your Skuuber Score™ is an indication of your potential reward for those efforts …the higher the score, the better.

Optimizing product development

Whether you are considering a new product entry or diagnosing the performance of an existing item, you should know how consumers compare your item and its value proposition to the category leader.

Where are your strengths? Their vulnerabilities? Your opportunities?

Savvy marketers will launch an objective evaluation of the category-leading SKU and then another to compare and benchmark their item. The differences are often pronounced and give visibility to where you can seek advantage. These can include positioning, value, uniqueness, branding, target markets, channels and literally dozens of other variables you can focus upon and exploit to your advantage.

Skuuber is so affordable that you can afford to test someone else's item, too.

The question is, can you afford not to?

The price is right. Or is it?

All products succeed or not depending upon their uniqueness and value.

Your pricing decisions will result in one of the following outcomes:

1. Overpriced relative to percieved value

2. Priced to fully capture perceived value

3. Underpriced allowing percieve value to go unrewarded

Skuuber uniquely allows you to measure value capture at the MSRP (list price at the shelf) and at a 25% off promotional price levels. This will help you understand price elasticity of demand and whether your MSRP is at a level that captures value and whether or not price discounting will generate sufficient incremental demand to at least break even.

You need to know that a 25% price discount will require a 33% increase in unit demand to break even. If it does not, you need to consider alternatives to price discounting as a promotional strategy. These include brand building activities like sampling, demos, retail features, value-added promotions and consumer advertising.

It does not follow that price drops = profitable volume building all of the time.

Understand your price elasticity of demand, made easy with a Skuuber study.

'SKUs me: category reviews, sku rationalization & private label

Category reviews are increasing in frequency and intensity. And for good reason.

The number of new items introduced annually has increased tenfold vs. a decade ago. But shelf space has not.

Private label brands are gaining significant momentum. 35% of shoppers are trying store brands for the first time and 90% plan to remain loyal once the recession is over.

Unless you can make the case for consumer demand for your product, defend its position vs. leading competitors---and now store brands---and support claims for uniqueness and value, you are at risk.

Increasingly, retailers are looking to keep the top two brands in a category and add their own house/private label as a third. If you're not in the top two, you need to find out why not.

Chances are, your item has untapped consumer demand and more potential than you or the trade have been able to tap. Certify that demand and identify ways to close the gap between you and the top two.

Don't hesitate, though. This is a fast-moving initiative.
Skuuber is fast moving for this very reason!

Real results in real time for the real world.

Thanks for finding Skuuber and this blog!

I began work on Skuuber nearly two years ago out of the frustration I've experienced in my 30+ years of new product launches and optimization work. No matter where I looked for reliable consumer insight to guide product decisions, all I discovered were hugely expensive and lengthy concept tests or simple surveys and focus groups.

The huge market research companies charge over $50,000 for what I needed and even then only provide data from 200 consumers. While they can provide volume projections, they rely upon a historic database that contains results from decades ago when the world was a very different place. Worse yet, their processes are complex and time consuming, taking 3-4 months to get results.

On the other hand, there are online survey companies that can ask consumers anything you want for at least $6 per respondent. You write the questions and you recieve back raw data, leaving you to figure out what it means. If you want a nationally representative sample of consumers, you'll pay at least $3000 and still must do the analytic work. This has high potential for garbage-in/garbage-out results and they are not strictly comparable study-to-study.

Of course, there are always focus groups in which you can invite 10-12 people to give you feedback on ideas. These cost about $8000 and there is no quantitative value whatsoever. You can get pretty good snacks, though, as you watch the group from the other side of the mirror.
None of this is real world.

In the real world, you need understand the impact of a product idea as it would most likely be presented to consumers as a finished thing, not as a concept or idea alone.

In the real world, performance is measured in a competitive environment where consumers trade off one value proposition against others in deciding what to try and buy.

In the real world, most, if not all, of the information consumers will get about your product before trying it will be found on the product's package alone.

In the real world, price matters and you will seldom sell 100% of volume at MSRP.

In the real world, you need answers and feedback quickly to accelarate and inform your product launches.

We wanted to design Skuuber for the real world and I think we have.

This blog will be a running commentary on issues and opportunities that face we CPG marketers every day. I hope you enjoy it and will contribute your thoughts as we go along.