Behaviorscan

BehaviorScan

The Next Generation

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. Agenda Why Test New Products & What Options are Available? Why Test TV Advertising & What Options are Available BehaviorScan: How it Works & What You Get New Multi-Outlet Panel Data Improved Panel ANCOVA Model Appendices

f Many new products launches are failing, costing $millions f Increase the odds of success by testing

f The biggest opportunities have the biggest risks f Accurately evaluate innovative ideas – without betting the company on them

f Bscan is more accurate than STMs and less costly than Roll N’ Reads

Test the NEW: New brand, major line extension/restage, new usage and benefits, 3rd entry or later

% of Total New Brands Introduced in CPG Food & Beverage Categories by Year One Dollar Sales (F/D/M)

1997-2002 2003 2004 79% 76%78%

7% 8% 8% 8% 9% 4% 4% 7% 3% 2% 2% 2% 1% 1% 1%

<$7.5MM $7.5- $10MM $10- $20MM $20- $50MM $50- $100MM $100MM+

Source: New food & beverage Pacesetter brand sales based on 52 weeks of dollar sales after achieving 30% ACV distribution between February 2003 and January 2004 InfoScan® Reviews Advantage, Food/Supermarkets, Drugstores & Mass Merchandisers, excluding Wal-Mart data for 2002-04 Pacesetters; 1997 – 2001 based on FDM including Wal-Mart store data. 2004 = 851 total new brands; 2003 = 749 total new brands; 1997 – 2002 = 3,567 total new brands

f Average launch-only costs: $25 million (range: $5 million - $100 million) f Trade f Retail slotting fees: $1-2 million per SKU

f Off-invoice allowances, feature ad & display fees: 5-20% of sales

f Sales force time & sell-in materials/sales kits

f Consumer f Advertising: $5 - 75 million

f Couponing: $5 - 10 million

f Other: R&D, Market Research, etc

Cost of a Typical Failure: $14,200,000

Of all new products Of new products tested in introduced nationally, BehaviorScan and introduced less than half succeed. nationally, over 84% succeed.

Failure 52% Success Success 48% 38% Not 40% Rolled rolled Out out 60% Failure 2%

SOURCE: IRI New Product Trends 2000

f Simulated Test Market (STM)

f Roll & Read Test

f BehaviorScan

Criteria Score Comments f Only a concept board stimulus Completeness f Just norms for marketing mix elements f Good diagnostics Insights f Based on what people say, not what they do f Good where norms exist Accuracy f Can be very wrong for unusual products f 2-4 week setup Speed f Results in 6-12 weeks Cost f Typically under $100k f Supplier handles everything Effort Required f Very limited product requirements Confidentiality f Almost guaranteed

Poor Low Average Good Excellent

Brand/Category STM Actual Error

Skin Care $70mm $15mm +79%

Analgesic $40mm $15mm +62%

Frozen Ethnic Food $100mm $40mm +60%

Cleaning Product $90mm $150mm -60%

Shelf Stable Pasta $60mm $25mm +58%

Frozen Snack $70mm $40mm +43%

The more unique the product, the higher potential for error.

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 9 Testing Options: New Product Tests Why not just Roll N’ Read? Criteria Score Comments f Can execute full marketing plan Completeness f May have execution problems f Panel data may be available Insights f Surveys possible f Insight into sell-in process Accuracy f Good representation f Preparation takes months Speed f Constrained by retailer resets f 24+ weeks because of distribution build f Total cost can exceed $1.5 million Cost f Need to stock 2-3,000 stores f Ties up sales/brokers Effort Required f Requires mainstream manufacturing Confidentiality f Completely readable by competition

Poor Low Average Good Excellent

Criteria Score Comments

Completeness f Can execute full marketing plan. Full control f Complete panel data available Insights f Can test/model alternative marketing plans f Can identify and survey triers Accuracy f IntroCast validates at +/- 9%, 90% of time f 6 week setup Speed f 12-24 weeks to run f Research costs $350k+ Cost f Need to stock 20-40 stores f IRI negotiates with retailer Effort Required f IRI stocks and merchandises product f Some of store data is masked Confidentiality f All of panel data is masked

Poor Low Average Good Excellent

STM Bscan

Established category New or multiple categories

Cannibalization not important Cannibalization important

“Typical” marketing plan “Unique” marketing plan

Low investment High investment

Low risk High risk

Confidentiality critical Some exposure acceptable

Need results in 6-8 weeks Need results in 12-24 weeks

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 12 Testing Options: New Product Tests Fact: New Product Testing in BehaviorScan Is Less Expensive than Other In-Market Options

Controlled BehaviorScan Roll N’ Read Market

Research & Analysis $300,000 $80,000 $40,000 Controlled Distribution $25,000 $195,000 $0 Media $150,000 $250,000 $500,000 Sales Force $0 $0 $60,000 Sales Promotion $15,000 $100,000 $200,000 Manufacture Product $25,000 $100,000 $200,000 TOTAL $515,000 $725,000 $1,000,000

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 13 Agenda Why Test New Products & What Options are Available? Why Test TV Advertising & What Options are Available BehaviorScan: How it Works & What You Get New Multi-Outlet Panel Data Improved Panel ANCOVA Model Appendices

f Many advertising programs have negative ROI’s f Advertising doesn’t always work – you need to test it f Get more for your marketing dollar; reduce uncertainty

f The media has changed; you must adapt

f Bscan is more accurate than Matched Market tests and often costs less

Test TV: Heavy or reduced spend, broadcast vs. cable, in/out season, 15s vs. 30s, multi vs. single brand

Effect on Sales % of Cases

No significant difference 45 Up to 5% difference 15

5.1 to 10% 16

10.1 to 20% 16 24% More than 20% 8

Source: IRI Results Database. BScan & MM Tests.

Incremental Profit Per Marketing Dollar Spent

Trade 72%

Coupons 51%

Advertising 57%

Source: 21 Recent Mix Drivers Studies

More channels, more choices 1980 10.0 means more opportunity for media targeting 2004 100

Cost per Thousand Viewers (CPM $)

1980 4.8 TV is more expensive: A 414% increase in CPM vs. a 212% increase in Cost of Living. 2004 19.9

Source: Media Dynamics

f Look to the Past: Model

f Advertising Tests: f Informal Matched Market f Statistical Matched Market f BehaviorScan

f Copy Testing

Model Test

Been done before Never been done before

Moderate change within +/-25% Major change

Low investment or risk of failure High investment or risk of failure

Few unknowns Many unknowns

Criteria Score Comments

Completeness f Good for guidance on low-risk decisions

f Directional reads Insights f May be able to read competitive response f “Raw” read – no statistically techniques applied Accuracy f Leads to wrong conclusion 50% of the time f Similar to Bscan for established brands Speed f Distribution build slower for new products Cost f High due to media costs

Effort Required f Manufacturer handles all aspects

Confidentiality f High competitive exposure

Poor Low Average Good Excellent

Criteria Score Comments f Good for analyses that can’t be tested at the HH-level Completeness like consumer promotions and radio advertising. f Panel overlay possible Insights f May be able to read competitive response f Statistical match and ANCOVA greatly improve Accuracy accuracy f Less control/more unknowns than Bscan f Similar to Bscan for established brands Speed f Distribution build slower for new products

Cost f Usually higher than Bscan due to media costs

f Client sales force executes treatment Effort Required f IRI matches markets and analyzes results

Confidentiality f High competitive exposure

Poor Low Average Good Excellent

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 22 Testing Options: TV Ad Tests BehaviorScan TV Ad Testing Criteria Score Comments f Controlled, real-world environment. Completeness f Often the only way to test new copy in the real world f Reads actual panel sales; surveys also available. Insights f Multi-outlet panel captures Wal-Mart purchases f Most accurate design: test and control cells exposed to the same conditions with targetable TV Accuracy f Representative markets f Statistical procedures like ANCOVA improve sensitivity Speed f Typical test is 52 weeks; 12-24 reads are possible f Typical Media + Research = $325 Cost f Frequently lower than MMT’s due to media costs f IRI handles all execution (e.g., cut-ins), except Effort Required media buy f Low panelist burden f Most store and all panel data is masked. Confidentiality f Possibility of competitive exposure Poor Low Average Good Excellent

Criteria Score Comments f Good for ranking of alternative copy ideas Completeness f Not helpful for new copy or significant changes f Measures recall, awareness, ad effectiveness Insights f Extensive databases available f Based on recall, not actual behavior Accuracy f Low sample size Speed f Typical test takes at least 5 wks (start to finish)

Cost f Low end $15K; average test $50-60K f Ads do not have to be complete to be tested Effort Required f Respondents watch tape more than once and are interviewed extensively Confidentiality f Low competitive exposure

Poor Low Average Good Excellent

BehaviorScan Split-Cable Matched Markets/DMAs Test and Control Cells Test and Control Cells in the Same Market in Different Markets

Market: Eau Claire Market: Phoenix Market: Dallas

Test Test Control

Control

Lower media costs in small markets offset higher research costs

Bscan Matched Market Pittsfield (Albany) + Nashville + Markets Midland Indianapolis Media Cost $160,000 $280,000 Research Cost * $165,000 $50,000 Total Cost $325,000 $330,000 SAVINGS $5,000

AND you get much more with BehaviorScan!

Research Cost for B-Scan: 24-week contract (1 outlet, 2 markets) with 20%under-utilized category discount, analytics, and TV ad cut-ins. Research Cost for MMT: IRI analytics only, 1 outlet. (NOTE: Albany is the worst case; other markets are less expensive.)

Bscan Matched Market

Markets 2 Bscan Markets 2 DMAs

Media Cost $120,000 $712,000 Research Cost $250,000 $50,000 Total Cost $370,000 $762,000 SAVINGS $392,000

% False Positive* 54%

17% 8%

Informal Market Matched Mkt w/ BehaviorScan Within Comparison Statistical Methods Market

Flipping a coin would be just as accurate

* Reporting a “test effect” when none exists

f “In 2003, our ad spending rose to 8.9 percent of sales, while trade and consumer spending fell to 10.2 percent. Most importantly, rigorous testing tells us that we’re spending our money on marketing and advertising programs that are among the very best in persuasion and impact.”

Jim Kilts, the CEO of Gillette

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 29 Agenda Why Test New Products & What Options are Available? Why Test TV Advertising & What Options are Available BehaviorScan: How it Works & What You Get New Multi-Outlet Panel Data Improved Panel ANCOVA Model Appendices

f Full retail execution for testing new products

f The nation’s only within- market Targetable TV system for testing new creative and alternative media plans

f In-depth analytics f Retail sales f Household purchasing f Attitudinal surveys available

Cedar Rapids, IA Eau Claire, WI

Grand Junction, CO* Pittsfield, MA

Targetable TV

*Targetable TV available in Grand Multi-Outlet Panel: Cedar Rapids, Eau Claire, Grand Junction Junction Q3 2006 (available Q3 2006)

% of Categories Note to IRI Sales: Customize this slide 61% depending on your client issue. See the Appendix for more examples of market representability, including demographics.

23%

10% 6%

<80 80-120 120-150 >150 CDI Distribution of 1200+ Categories & Subcategories

SOURCE: InfoScan Reviews category definitions, BScan market sales data for 52 weeks ending 7/31/2005.

f Retail scanner sales data collected weekly from nearly all grocery, drug, and mass merchandise stores* f Weekly collection of feature ads and displays f Data from other sources can also be incorporated

Participating in each BScan market are:

f7 to 12 FOOD stores

f1 to 14 DRUG stores

f3 to 5 MASS stores*

*Mass stores are not under contract but can be approached on a test-by-test basis

f Warehouses for storing and delivering test products (shelf stable, refrigerated, and frozen)

f Delivery vehicles

f Permanent, experienced staff obtain retailer authorization, deliver and shelve test products, execute promotions, perform shelf audits, etc.

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 35 Benefits- TV Ad Testing: Controlled, Real-World The Only “Split Cable” Advertising Testing System in the Country Invisibly deliver To distinct household groups different TV commercials in the same city

Broadcast Ad

IRI Cut-In Ad

f Markets have 30+ fiber optic “nodes”, grouped into three demographically balanced cells. f Covers all TV channels in that market and all TV sets in the household f Large sample for survey research f No panelist workload

A C A

A B A C A C B

A C B A B B A

f The Bscan DMAs are among the smallest and least expensive in the U.S. for tests requiring spot media buys (e.g., new product, ad/no ad, and media heavy-up tests).

Media Cost Comparison* DMA Rankings (out of 210) $190 184 Grand Junction/Montrose 123 Eau Claire/LaCrosse 88 Cedar Rapids $75 55 Pittsfield (Albany)

Cincinnati/Dayton Pittsfield Bscan InfoScan Mkt (Albany DMA)

* $000, based on a 500 GRP prime-time plan

f A 52-week read is preferred, however 12- and 24-week reads are generally feasible.

f If there is going to be a long term effect, you will begin to see it within 8 weeks.

TRIAL REPEAT ADDITONAL REPEAT Potential Potential Potential Additional Triers Repeaters Repeaters

Advertising, Consumer and Trade Promotion

• Accurate forecasts in 12-16 weeks • Ability to simulate alternative marketing plans

f Accuracy when predicting year-one after 12-24 weeks in-market: f IntroCast validation: ± 9% in 90% of the cases f Major manufacturer validated at ±7% at 12 weeks f Year-one forecast in 12-16 weeks for many products

f Length of test depends on purchase cycle and product incidence

f Need at least 150 triers and 50 repeaters

Base Plan Year One Sales = 20MM units

Synergy 10%

Trade 15%

Base 50% Coupons 10%

Advertising 15%

Base Plan with Coupons Revised Plan, No Coupons

20MM Units

Coupons 18MM Units Trade Advertising

Base

f AttitudeLinkTM: Survey IRI panelists to evaluate Trial & Repeat and other new product measures by consumer segment

f comScore Behavior Activated Research (BAR): f Survey invitation via coupon issued through Catalina check-out machines triggered by purchase and/or purchase history (e.g. brand buyer, trier that switched to competitor)

f Available through 3rd parties: f Phone surveys of non-panelists: Awareness, Usage, & Attitudes (must use Survey Sampling) f Focus groups / one-on-one interviews f Shopper intercept interviews and retailer feedback surveys

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 44 Benefits: Actionable Attitudinal Option: BAR® Consumer Insights f Direct integration of attitudinal insights and sales performance f Supplement quantitative test results with qualitative consumer insights f Recruit quality sample for focus groups f Advantages: f Accurately, efficiently locate ACTUAL buyers and consumers of interest f Leverage current and historical purchase behavior for identification f Quick survey execution

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. Benefits: Actionable BAR® Survey Process f Qualifies potential survey respondents using in-store purchase data from the Catalina Marketing Network® f Triggers survey invitations at checkout registers f Consumers respond via telephone or Web to receive cash incentive

Shopping Checkout Research Invitation POS

Picture of a check?

Call Initiated Telephone Interview Web Interview Incentive Reward

Attitudinal Insights:

f Buyer Profile, Buyer Influencers; Non-Buyer Profile f User Profile f Awareness Levels, Source of Awareness f Attitudes on Media Efforts f Reasons for Trial f Store Location, In-Store Experience Adds the f Product Usage Occasion Attitudinal f Repurchase Intent Piece of f Likes & Dislikes - Total, By Flavor the Pie! f Competitive Preferences & Opinions f Overall Satisfaction f Suggested Improvements

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 47 Agenda Why Test New Products & What Options are Available? Why Test TV Advertising & What Options are Available BehaviorScan: How it Works & What You Get New Multi-Outlet Panel Data Improved Panel ANCOVA Model Appendices

f Accuracy & Coverage f Improved coverage: captures Wal-Mart and other outlets f Better sensitivity: more transactions from more households f New panel ANCOVA methodology = better sensitivity, tighter results

f Actionability f More relevant for Non-Food categories and anyone that has Wal-Mart as a top client f New ways to collect attitudinal data

f Still the most controlled, real-world testing environment

Dual-Mode Panel tracks f Panelists continue to show purchasing in more outlets their card at participating stores f Also use a handheld scanner at home for purchases at non- participating stores f Dual approach minimizes panelist burden

f Available in Eau Claire and Cedar Rapids, coming to Grand Junction Q3 2006 Captures

Total HHs Total HHs year ago now

Eau Claire 3,165 3,465 10% Cedar Rapids 2,129 2,328 increase!

Combined 5,394 5,793

42 weeks ending 12/7/03

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 51 Benefits: Actionability More Transactions, especially in Non-Food Categories f More Transactions = Faster and More Precise Results f Now more relevant in HBC and GM Categories

Avg. Transaction Gain: Increase in Transactions vs Card Only 75% 62% Eau Claire: 25% 38% Cedar Rapids: 56% 31% 28% 9%

Salty Snacks Category Analgesics Category Dentrifice Category Eau Claire Cedar Rapids

42 weeks ending 12/7/03, all Outlets

Average Sensitivity Across 6 Non-Food Brands with Long Purchase Cycles

11.5 15% improvement!

Grocery Only Panel Multi-Outlet Panel

Source: EC & CR combined – 52 pre vs 52 post - Sensitivities at 80% CL

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 53 Agenda Why Test New Products & What Options are Available? Why Test TV Advertising & What Options are Available BehaviorScan: How it Works & What You Get New Multi-Outlet Panel Data Improved Panel ANCOVA Model Appendices

f Analyzes data at household level f Updated methodology due to use of ScanKey data f Compares HH purchases in test period to pre period, and to control market f Controls for differences in price and promotion f Causal data comes from Panel data only, which incorporates store causal info where available f Handles both multi-outlet markets (Eau Claire, Cedar Rapids, and Grand Junction as of Q3 2006) and grocery markets (Pittsfield) f New corresponding Panel Sensitivity program

Old Covariate New Covariate

-15.3% +15.3% -7.8% +7.8%

Estimate Estimate

Results from Validation of 8 Tests

f Controlled, representative markets f Real-world = reads consumer sales, not claimed intent f Often cheaper than other methods, more insights f Multi-Outlet Panel data f Improved relevancy: captures Wal-Mart and other outlets f Better sensitivity: more transactions from more households f New ANCOVA methodology = better accuracy f Attitudinal surveys available

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. Why Test New Products? Bscan Gives you Better Odds f Take the Net Present Value of Operating Income streams over 6 years for the average “homerun” new product …

Without Bscan 48% Success (+$11 MM) NPV of -$10.9 MM Brand 0perating income over 6 yrs 52% Failure (-$31.2 MM) Note to IRI Sales: A spreadsheet is available With Bscan for you to customize Bscan reduces risk these calculations for 38% Success ($8 MM) by $12.1 MM! your client. Contact Claire Boyle. NPV of $1.2 MM 2% Failure (-$32.2 MM) Brand operating income over 6 yrs 60% Not Rolled (-$2 MM)

Assumptions: Brand w/$75MM sales/yr, 4 SKUs, $40MM ad budget, $10MM capital investment

30% -- Poorly articulated positioning

30% -- Product fails to meet consumer expectations

Test marketing 20% -- Insufficient awareness / advertising solves! Media weight, compelling copy

10% -- Insufficient promotion (incentive to try) 10% -- Inadequate distribution

SOURCE: Clancy & Shulman, Marketing Myths that are Killing Business

9 Completeness f Able to test the total marketing plan 9 Insights f Trial, repeat and other consumer dynamics f Attitudinal measures f Impact of marketing programs 9 Accuracy f A reliable national forecast f Estimates of category expansion and cannibalization 9 Speed f Fast to get into the field f Fast results 9 Cost f Research f Product requirements f Slotting allowances f Marketing programs 9 Effort Required f Minimum effort required by brokers, sales force

9 Confidentiality f Restrict competitors ability to read test

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 62 Why Test New Products? Bscan Costs Less & Provides Richer Insight than a Roll N’ Read 10% ACV Regional Bscan Test Product Requirements (cases)1 108,000 828 x Profit per Case $4.00 $4.00 Product Profit2 $432,000 $3,312 Slotting $1,000,000 $0 Testing Contract Fee3 $0 $180,000 Product Stocking/Handling $0 $50,000 Promotion Execution $50,000 $10,000 Media Production $100,000 $100,000 Media Execution3 $500,000 $100,000 Media Cut-Ins $0 $50,000 Analytics $10,000 $90,000 In-Market Test Costs $2,060,000 $580,000 Net Cost for Testing Options $1,228,000 $576,688 1: Assume 24 week test, 12 units per week, 3000 stores for 10% ACV test, 23 stores for Bscan; 2: Assumes all product sells through with no left over/distressed inventory at end of test: 3: Assume 2 markets are required in BScan for 24 weeks; 4: Assume 500 GRP prime-time plan. . Copyright © 2006 Information. Resources, Inc. Confidential and proprietary. 63 Why Test New Products? New Products Are Expensive

Typical Brand** Cost Element* Typical Cost ($000s) Slotting Fees $1-2MM per SKU $6,000 Off-invoice and bill-back 10-20% of sales $4,500 allowances

Sales force/ Broker Costs 3-7% of sales $1,200

$300K per drop + Coupons redemption & $3,000 handling Advertising $5-$75MM $15,000

Cannibalization 0-90% $?

Other, e.g, Mkt Research $300

TOTAL $30,000

*Excluding Capital and COGS **4 Item, $30mm Brand

Income Revenue from product sold $15,000 Profit Margin 40%

Contribution $6,000

Costs

Slotting allowances $6,000

Off-invoice and bill-back allowances $2,000

Coupons $2,000

Advertising $10,000

Other $200

Total Costs $20,000

LOSS ($14,200)

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 65 Why Test New Products? Why Make Costly Decisions on the Basis of a Shaky set of Assumptions? In-Market Launch (e.g., w/ IRI Simulation (BASES) IntroCast used in Bscan) Distribution Actual Estimated Actual, including actual Planned (Quality of created Marketing Events creative estimated) Forecast based on planned Awareness Actual marketing events

Actual to date, with forecast Claimed after viewing concept based on intro-to-date Trial board, adjusted based on response to marketing as benchmarks actually executed

Claimed after 1 week use, adjusted First Repeat Same as above based on benchmarks Most crucial to Claimed frequency of purchase, Additional Repeats Same as above long-term volume adjusted based on benchmarks and most often Source of Volume Actual Observed Consumer statements wrong in STM

“BehaviorScan is a critical component of Frito-Lay’s go-to-market strategy for a couple of reasons. First, it gives us absolutely the most accurate read on the sales potential of a new product, and a well-rounded view of consumer response to all elements of the marketing mix. Second, BehaviorScan TV ad testing has enabled us to significantly increase our return on our advertising investment. We definitely plan to continue using BehaviorScan, especially with the new multi-outlet panel enhancement.”

Dwight Riskey Senior Vice President, Frito-Lay October 29, 2001

f Creative f Is new campaign better than current campaign? (if brand is national advertiser) f What mix of promotional (or brand feature) versus general brand equity copy is right (no change in weight level)?

f Media f Heavy-up TV -- but Bscan markets usually CHEAPER f Add other media: TV only vs. TV plus radio, print, outdoor, newspaper - - but Bscan markets usually CHEAPER f Reduction in weight f TV ad / No ad (if brand is national advertiser) f Different media targets: moms vs. kids f Different dayparts - daytime vs. primetime, cable vs. broadcast f Replace TV with other media

Barilla Foster Farms PepsiCo Bayer General Mills Pfizer Binney & Smith Gillette Pillsbury Brachs Heinz Pinnacle Foods Bristol Myers Hershey Procter & Gamble Bush Brothers Johnson & Johnson Reckitt Benckiser Campbell Soup Kellogg S.C. Johnson Cap One Kraft Sara Lee Church & Dwight Michelin Soldan ConAgra MicroSoft Storck Dean Foods Motts Suiza Foods Dial Novartis Visa Dreyers Ocean Spray Vlasic Ferrero Impress Wrigley

*Conducted BehaviorScan Tests in 2000-2003

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 69 Appendices More on Building the Business Case More Examples of BScan Market Representability fComparison of Bscan vs. US regarding demographics, market dynamics, stores, and media climate More on Methodology

Bscan Markets vs. Total U.S. (Survey of Buying Power 2004) Total Grand Cedar %HHs Pittsfield Eau Claire U.S. Junction Rapids With Kids 29.3** 26.8 25.4 20.5 16.8 1-2 Persons 58.6 58.8 63.6 68.9 72.9 $45K+ 43.2* 40.8 45.6 33.8 35.1 Income

Source: Survey of Buying Power 2004 *Source: Est. figures based on Survey of Buying Power 2004 **Source: U.S. Census, Total US Distribution of Demographics - March 2002 update

Management, professional, and Sales and office occupations related occupations

33.6% 33.3% 26.7% 28.7% 33.6%26.7% Avg Total Avg Bscan Avg Total Avg Bscan U.S. Markets U.S. Markets

Production, transportation, Service occupations material moving occupations

14.6% 12.4% 33.6%14.9% 16.9%

Avg Total Avg Bscan Avg Total Avg Bscan U.S. Markets U.S. Markets

Source: U.S. Census Bureau; Profile of Selected Social Characteristics, 2000 Census

Household Income

Avg Total U.S. 28.7%29.7% Avg Bscan Markets *28.1% 28.5% *24.5%

*18.6% 20.3% 19.5%

Less than $25,000 $25,000 - 44,999 $45,000 - 64,999 $65,000 or more

Source: Survey of Buying Power, 2004. *Estimated Figures based on Survey of Buying Power 2004

% High School Graduate or Higher

93.2% 90.1% 89.8%

83.7% 80.4%

Total U.S. Cedar Rapids Eau Claire Grand Pittsfield Junction

Source: U.S. Census Bureau; Profile of Selected Social Characteristics, 2000 Census

Education continued

% Bachelor’s Degree or Higher

37.4% 35.5% 37.4% 35.5%

24.4%

Total U.S. Cedar Eau Claire Grand Pittsfield Rapids Junction

Source: U.S. Census Bureau; Profile of Selected Social Characteristics, 2000 Census

% of Households

43.5% Avg Total U.S. Avg Bscan Markets 32.4% 26.1% 22.0% 16.7% 14.1% 14.0%13.2% 6.5% 5.2% 4.2% 2.0%

1 Member 2 Member 3 Member 4 Member 5 Member 6+ Member

Source: Survey of Buying Power, 2004.

% of Households

Avg Total U.S. Avg Bscan Markets 31.3

22.1 20.8 21.2 21.2 20.9 * 15.6 13.3 15.4 8.1* 4.5 3.0

18-29 30-34 35-44 45-54 55-64 65 +

Source: Survey of Buying Power, 2004. *Estimated Figures based on Survey of Buying Power 2004

Dollars per Buyer Over 1 Year $484 $489

U.S. Markets Bscan Markets

$193 $192 $147 $152 $106 $107 $48 $52 $53 $49

Frito-Lay Kraft General P&G Quaker Private Mills Label

Source: IRI Panel Dollars per Buyer; All IRI Categories; 52 Week Ending 6/29/03

U.S. Market Bscan Market Rank Rank Coke Classic 144 oz 1 2 Pepsi Cola 144 oz 2 1 Lays Potato Chips 12 oz 12 11 Philadelphia Cream Cheese 8 oz 13 21 Oscar Mayer Sliced Bacon 16 oz 14 23 Nabisco Ritz Crackers 16 oz 16 22 General Mils Cheerios 15 oz 25 29

Source: Bscan Market Video, IRI InfoScan Reviews, 52 week period ending 7/13/03, ranking based on top edible categories.

% of Chain Stores

100% 100% 78% 71% 75%

Total U.S. Pittsfield Eau Claire Grand Cedar Junction Rapids

Source: Bscan market video, 6/03

Average Store Square Footage (000s)

47.0 43.9 38.0 39.6 27.2

Total U.S. Pittsfield Eau Claire Grand Cedar Junction Rapids

Source: Bscan market video, 6/03

Total U.S. Ranking Bscan Markets Ranking

CSI: Crime Scene Investigation 1 2

Without A Trace 2 3

Law & Order 4 4

Two and a Half Men 5 7

Law & Order SVU 8 10

Source: One Week Ending 7/31/05; Ranking based on Nielson Top 10 at Total U.S. vs. IRI Bscan markets data

% of Homes with Cable TV

77% 67% 72% 70% 61%

Total U.S. Pittsfield Eau Claire Grand Cedar Junction Rapids

Source: IRI Bscan markets data; Total U.S. provided by Market Dynamics, TV Dimensions, 2005

# of Radio Stations (AM & FM)

22 23 22 23

Total U.S. Pittsfield Eau Claire Grand Cedar Junction Rapids

Source: Radio Locator; Theodric Technologies, LLC; 8/05

Internet Penetration*

75% 77% 74% 73% 73%

Total U.S. Pittsfield Eau Claire Grand Cedar Junction Rapids

Source: Total U.S. Computerwire 3/22/04; IRI Bscan Household Panel Survey 6/2005.

National TV Advertising

Spot (DMA level) TV Advertising Balance U.S. BehaviorScan Market Balance of DMA BehaviorScan Cable System Non- Cable Subscribers Cable Cell A Cell B Cell C Cut-Ins

IRI Panelists

Market 1 Market 2 Test Control

Control Test

f Test and control cells experience the same ... f Environmental conditions - temperature, humidity, weather disasters f Local festivals and special events f Competitive advertising and promotions f Retailer presence and outlet mix f Alternative media presence f Publicity / press coverage, other business conditions

DMA Condition

Local Cable System / BehaviorScan Studio

Cell A Cell B Cell C Non-Cable -Test- -Control- Subscribers

30% of 30% of 30% of market market market

¤¤¤¤¤¤¤¤¤ ¤¤¤¤ ¤¤¤¤

¤ = IRI Panel HHs

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 89 Methodology Matched Test and Control Groups f Statistical (linear programming) procedure forms two groups of IRI HH panelists with similar category/brand purchasing and demographics.

24.5 Category Penetration 22.8 23.0 (% of HHs Buying) 20.8

Category Volume per Buyer .29 .245 .31 .245 Test Cell Control Cell 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

99% C. L. 28

20 20

12 12

Raw Test Covariate Confidence Best Confidence Effect Adjusted Interval High Estimate Interval Low Test Effect End* of Test End* Effect * 80% C. I.

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 91 Methodology: New Product Testing Early Warning Radar f After 12 weeks, Trial is 2%, well below the goal of 4.5%. This signals a problem with awareness and/or conversion from awareness to trial.

Cumulative % of HHs Trying Problem! Recommended Action: Consumer survey to isolate problem and identify solutions 12345678910111213 Test Mkts 1.0 1.5 2.0 Goal 1.5 3.0 4.5 5.5 6.5 7.0 7.5 8.0 8.5 9.0 9.3 9.7 10.0 4 Week Periods From Introduction

IntroCast Post-Launch

Variance Year One to Goal Volume Sales (MM)

Forecast ActualActual

0 1 2 3 4 5 6 7 8 9 10 11 12 13 4 week periods from introduction

Fair Share % of New Product Sales Interaction Index Sourced From . . .

New Category Buyers 5 na

Increased Category 8 na Consumption

Parent Brand 20 120

Competitor A 25 80

Competitor B 42 150

Copyright © 2006 Information Resources, Inc. Confidential and proprietary. 94 Methodology: New Product Testing Enables Earlier Read on New Products f B-Scan distribution is 100% in test week 1, plus the Panel decomposition of Sales into Trial & Repeat components speeds forecasting B-scan Controlled Sell-In Test Market Test Test

SUCCESS Total Sales

Trial Repeat

FAILURE Total Sales Trial Repeat

Critical Success Factors 50 Goal Forcast 40 35 35

+20% Over Goal!

12 12 8 8 1.1 2.1

Total Dollar % of HHs Trial % of Triers Additional Avg Sales ($MM) Repeating Repeaters Vol/Occasion