Consumer Panels — Basket Analysis


Exhibit 7.16   Petrol Basket for Shell 98 (a fictitious example). Click to view demo.

The basket is an analysis of transactions by a buyer group. Buyer group, as mentioned earlier, may be a demographic group, a segment, or it may be a user-defined group of consumers, defined on the basis of what they bought, where they bought or how much they bought. It is often defined as buyers of a particular brand, in which case the basket constitutes the repertoire of brands bought by the buyers of that brand.

Exhibit 7.16 depicts the analysis of the petrol basket for Shell 98 for a particular month. The basket reveals that loyalty for Shell 98 is 69.6% in volume (frequency) terms and 70.0% in value terms. These buyers pumped Shell 98 on an average 1.5 times that month, spending $126. It also reveals that 19.4% of Shell 98 motorists pumped Synergy 8000 and that Synergy 8000 constitutes 12.3% of the total spend on average. In total the average Shell 98 motorists spend $180 (pumping 2.1 times) for that month.

The basket analysis is frequently used in internet marketing or e-commerce. For example, the use of recommendations (“Customers who bought this also bought ...”) by Netflix and Amazon, to drive sales and improve customers’ on-site experience.

Cross basket, an interesting variation of the basket analysis, analyses the purchases of some other category by a buyer group. For example, the cross basket of shampoo purchases by Dove body wash buyers, would reveal the repertoire of shampoos bought by Dove body wash buyers.

The basket and cross basket provide a comprehensive understanding of the transactions by the buyer group, and as we will see from the case Johnson’s Body Care, at the end of this chapter, this is very useful for addressing a variety of business issues.

Yet another variation of the basket analysis, of great relevance to the retailer, is the shopping basket. For instance, it would interest a retailer to know the total spend, and the break-up of that spend across categories, for the shoppers of those brands that they promote most frequently. If a brand buyer’s shopping basket is large in terms of quantity and value of purchases, that brand is a potential transaction builder. Retailers want to attract these shoppers to their stores because they spend much more than the average shopper. For example, in most Asian markets, products like cooking oil and rice are transaction builders.

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Basket Analysis Demo

Basket Analysis Demo

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