Factor analysis to fine tune product strategy

Client

Leading CPG manufacturer with operations in multiple countries.

OPPORTUNITY

The client wanted to fine-tune its product strategy in key markets for beverage products. The client sought to understand the underlying factors that influence consumption of beverages.

SOLUTION

SG Analytics formed a dedicated team to provide a solution to this business problem. The team divided the data and problem into micro-segments and created specific milestones using the following four-step approach:
  • Using the maxdiff analysis technique, SG Analytics conducted a survey in one of the markets to gauge the attributes that drive consumer decision of buying beverage products.
  • The team conducted a factor analysis study to derive the factors covering both emotional and functional attributes that appeal to the consumers.
  • Our data scientists used the obtained factor scores along with the contextual variables to identify the statistically best-fit discriminating variable using a clustering analysis. The team further iterated the process to identify multiple descriptors that fully segmented the survey data to create a driver tree.
  • From the driver tree, we were able to create profiles of consumers having a unique set of needs.

VALUE DELIVERED

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1
Helped the client understand consumer needs which helped devise beverages product strategy.
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2
Aided in improved understanding of consumer tastes, leading to better consumer targeting.
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3
Improved beverages revenues for the key markets by 15% year-on-year.