Foods for children:What should industry offer tomorrow?

Linda Ettinger Lieberman, Dvora Chaiet,Nadya Livshits, Howard R. Moskowitz

Moskowitz Jacobs Inc.Batool Batalvi, SB&B Marketing Research

IFT Chicago, July 15, 2013

How to create healthier foods for children

Foods for children are getting a lot of attention. The food industry has to respond to parents’ concerns.

• A lot of focus will be on marketing to children• What issues resonate with parents most?• Which products are perceived as best for children?• What food products will command higher prices?

• Psychological foundations of research …• Empathy … the mine of ideas• Experiment … The acid test

• Running the experiment • What do parents most want for their children?• Different mind-sets offer major opportunities

Where do we begin?• We need to have a deep understanding of what parents want.• Most marketing efforts remain peripheral and superficial.• Focusing on what, not on the parent-child relationship.

5 KEYS™ EMPATHY … holistic qualitative research paradigm emerging from nutrition economics.

• Explores psychic apparatus of parents.• Uses a hybrid mix of qualitative techniques.• Methods engage parents, elicit responses, generate insights.• A disciplined, qualitative process.

Empathy and Experiment™: Psychology of empathy and the science of experiment

Foundation for Mind Genomics® IdeaMap®.net • Modeled on science of genomics, informatics technology • The three roots of RDE:

• Experimental psychology• Driving power of business • The world-view of social science

How Rule Developing Experimentation (RDE) operates

• Extracts ideas as basis of the stimuli to be tested • Both objective (topical) and subjective (experiential) insights used

to create elements to be used in vignettes• Runs structured tests which mix and match elements (ideas)• Discover winners … messages which float to the top.• Uncovers mind-set segments• Create a typing tool to assign a person to a segment.

How to create healthier foods for children

DEVELOP Child oriented SURVEY STIMULI AND QUESTIONS

What ParentsDemand &Will Pay for

ANALYZE SURVEY RESULTS→ Mind Genomics® IdeaMap ®.net

INTERNET invitation

Mind Genomics ® IdeaMap.net

SURVEY

IDENTIFY Parents as target market

Total Sample

Seg 1 Self Driven Online

Banking Seekers

Seg 2 Technology/

High Security Seekers

Seg 3 Collaborative

Online Seekers

Seg 4 Personal Touch with Technology

Base Size: (267) (105) (50) (59) (53) Constant: 31 34 28 31 26

OC1 Connect online in 'real time' with a customer rep via instant messaging, voice over IP or video conferencing via your computer 0 2 2 5 -13

OC3 Faster loan application process…work in real time online with a loan officer 0 0 -8 12 -8

OC4 Our bank's customer service reps will help you browse and use our online banking services -1 0 -6 10 -10

OC2 Use our online tool to find and schedule at your convenience an online working session with an expert such as investment broker, insurance agent, and/or loan officer -3 1 -11 6 -12

ON3 We will answer all your requests in 'real time' by email, instant or text messaging 1 7 -11 3 -1

ON4 We offer 'On demand' status reports for services requests (e.g., loan application) delivered to you via e-mail, text or instant messaging

1 6 -4 -3 0ON2 No more paper mail... We will send you statements and images of

transactions securely by email -2 5 -17 -5 2ON1 We allow you to pay bills securely using your mobile devices (cell

phone, PDA, Blackberry, etc.) -4 2 -13 -9 -2

BR3 We offer a bank-issued smart card so we can recognize you entering the branch and process your needs faster 4 2 6 -3 13

BR4 Choose a secure eye or finger security scan to identify you immediately in-branch and at ATM 4 3 10 -1 3

BR2 We have the most secure biometric system that identifies you as you enter the branch so we can process your needs faster 2 -1 8 -5 6

BR1 We will recognize our customer's mobile phone signal when entering a branch so we can recommend appropriate bank products, promotions and special services -4 -3 -6 -11 2

Online Collaborative

Online Other

In-Branch Recognition

No more paper mail – we will send you copies of statements by secure e-mail

Securely manage your account by PDA, Internet of automated telephone

Our banks customer services reps will help browse & use our on-line services

Manage all your banking needs with a state of the art kiosk and be confident that live help is available if you need it

No more paper mail – we will send you copies of statements by secure e-mail

Securely manage your account by PDA, Internet of automated telephone

Our banks customer services reps will help browse & use our on-line services

Manage all your banking needs with a state of the art kiosk and be confident that live help is available if you need it

MARKET SEGMENTATION SEGMENTATION WIZARDMARKETING PHRASES

The steps of the RDE process

Raw materials: Sample Elements from Silos A-C

Silo A: The productLess cane sugar and high fructose corn syrup, and no artificial sweetenersNo or low bad fats, which may reduce risk of heart diseaseLess or no added salt, which may help reduce blood pressureAdded Omega-3 and Omega-6 fatty acids, which may increase brain functionMore fiber to improve digestive healthMore calcium and vitamins…known to help bone growth

Silo B: The packageSmaller portion packages help control weightFamily-sized/bulk food packages indicate recommended children's portionBulk food packages contain separately wrapped single portionsWide array of healthy food options for common family favoritesChildren's health/nutrition needs explained on package labelPackage shows children's serving in portion food plate

Silo C: Good for youAll natural ingredients … a food you feel good about feeding your familyGood for children … helps build brain powerGood for children … helps build and maintain musclesGood for children … keeps them slimmerGood for children … gives them more energyGood for the whole family

Elements combined into vignettes = small ‘ad’Rated on 2 questions ‘pleasing the reader’

and ‘price would be paid’ Note: The price is randomized

A marketing panel study (diverse group, n = 301)

• Each respondent rated 48 vignettes• Vignette first rated on ‘pleased’ – 9 point scale• Vignette then rated on ‘dollars extra would pay’ – select a dollar value• Slope of the simple equation: Extra $ = a + b (Pleased)

-3 -2 -1 0 1 2 3 4 5Dollar value for unit of pleased

Each circle = respondent

How many more dollars will a person pay for being ‘pleased’ by what the industry promises?

Will people pay extra for vignettes which ‘please’ them?

Reading the numbers: Which elements please? Which raise willingness to pay (WTP)?

•Pleased = probability that a person will be pleased (rating 7-9)

• Constant = baseline of % being pleased without any elements in the vignette

• Each element contributes its own percentage of people being pleased

• Dollar value = incremental willingness to pay (WTP), over and above the specified $86 purchase when the element is introduced into the vignette

What pleases people most …And how much extra money will they pay?

Pleased Price

Constant 34

All natural ingredients … a food you feel good about feeding your family 12 1.30

Less cane sugar and high fructose corn syrup, and no artificial sweeteners 11 1.36

Insurance premium reduction for completion of healthy cooking and eating class 10 1.42

More calcium and vitamins…known to help bone growth 10 1.20

No or low bad fats, which may reduce risk of heart disease 10 1.26

Added Omega-3 and Omega-6 fatty acids, which may increase brain function 10 1.25

Supermarket cash register reduces prices that stretch your budget when you buy healthy foods 10 1.26Earn coupons for free or reduced-price healthy foods with each week's food purchases 7 1.38

Government improves nutritional quality of school meals 5 1.29

Farmer's market and food vendors accept coupons for healthy food purchases 7 1.22

Promotion of healthy food choices at all types of stores…club, supermarket, 7-11, QuickChek, etc. 6 1.20

Good for children … keeps them slimmer 7 1.19

Less or no added salt, which may help reduce blood pressure 8 1.15

More fiber to improve digestive health 5 1.15

Good for children … helps build brain power 9 1.12

Good for the whole family 4 1.07

Manufacturer works with government and community about new food portion sizes 8 1.02

Dividing our respondents into mind-economic groups (cognitive-economic segments)  Seg1 Seg2 Seg3

  111 83 107

Average price would pay across all 36 elements 0.96 1.02 1.04

Seg1 : Values help by government , store, and school

Promotion of healthy food choices at all types of stores…club, supermarket, 7-11, QuickChek, etc.

2.25 0.75 0.46

Vending machines in schools and elsewhere should show calorie counts for all items offered for sale

2.02 1.04 -0.28

Manufacturer works with government and community about new food portion sizes 1.97 0.93 0.10

Government improves nutritional quality of school meals 1.87 0.52 1.27

Earn coupons for free or reduced-price healthy foods with each week's food purchases

1.83 0.76 1.40

Seg2 : Values better packaging      

Smaller portion packages help control weight 0.02 2.90 0.35

Package shows children's serving in portion food plate 0.01 2.43 0.15

Children's health/nutrition needs explained on package label -0.11 2.21 0.35

Wide array of healthy food options for common family favorites -0.14 2.17 0.56

Bulk food packages contain separately wrapped single portions 0.06 2.14 0.64

Seg3: Values better food & focus on the children      

Less cane sugar and high fructose corn syrup, and no artificial sweeteners 1.18 1.00 1.84

All natural ingredients … a food you feel good about feeding your family 0.99 1.06 1.82

Free "Feeding the Kids Workshop: Raising Happy, Healthy Eaters" for parents at local elementary/middle school

-0.03 0.69 1.77

Good for children … helps build and maintain muscles 0.39 0.69 1.75

Free "Feeding the Kids Workshop: Raising Happy, Healthy Eaters" for parents at local community center

0.10 0.79 1.66

Primaries: Different Parent Mind-Sets:What They Want and Don’t Want

• Segment 1: Will pay for help by government, store and school• Segment 2: Will pay for better packaging• Segment 3: Will pay for better food, focuses on the children

Each one of you in this room belongs to one of the three primary mind-sets

• Which one are you?• Which one is your potential customer?• What will YOU create for that customer?

Identifying the mind-set of parentsIt’s not who they are, it’s their mind

• You know what appeals to parents• But when a parent is in front of you ..

– To what segment does that person belong

• And ...how are you going to communicate ..– What will you say?

• And how do you know it’s convincing– Promoting better health for children– Saying the right thing is as important as doing

the right thing

The ‘typing wizard’

What is your neuro-economic segment?

• With corporations and food policy on the defensive,

use knowledge about what’s important to people

• Use it to redesign packages• Create a PR campaign using targeted, impactful, • 1:1 communications by knowing a person’s mindset

•But how?• Don’t wait to find linkage between a person and • a mind-set using ‘big data’• Mind-type people, e.g., as part of a supermarket chain• loyalty program, or as a game on the web• Send each person a particularized message based on• the mind-type (mind segment) to which he belongs

From Data to Food Policy and Strategy

Identify and Use these Mind Sets

Key Learnings

• We can subject ‘what industry should do’ to a S-R experiment• Provide vignettes of what’s to be done• Get ratings of ‘pleased’ and ‘amount would pay’• Deconstruct ratings into element contributions

• People will pay more for what they like• People differ in how much they’ll pay for a unit of liking• Typically $1 - $2 for one unit of being pleased

• It’s all in the elements• On average, an element will increase payment by about $1• This holds for most subgroups• It’s hard to get above $1.50 for an element

• You can make people happier and get more by mind-set segmentation• Not on the average ...it’s still $1 on average• But you can get far more than $1.50 for the ‘right elements’ by segmenting

your respondents into mind-types

Going to the next stage

• Let’s move beyond the obvious..to the next step… portion size and perhaps satiety

• Our data suggest portion size is relevant but not ‘crucial, burning’ issue– Not too much attention will be paid– Nor effort put in to figure out how to reduce portion size– Yet it’s relevant and important

• Collaborative work being funded by Ajinomoto– WHAT to communicate to reduce portion size..food, situation,

benefit– Stay tuned ...