Using Turf Analysis to Optimize SKU Assortment

What is it for?

TURF analysis enables clients to select the particular set of items in a line that will maximize the line’s penetration. TURF (Total Unduplicated Reach and Frequency) analysis was developed by media researchers in order to maximize unduplicated audience reach and frequency and so, optimize use of clients’ media dollars. Because the goal of maximizing reach (or market penetration) is common in marketing, the TURF approach has been adapted to a number of consumer research applications.

How does it work?

The simplest way to illustrate the benefit of a TURF analysis is by a hypothetical example.

LA Cookie Company wished to optimize its portfolio of cookies. An analysis of store scanner data indicated that 3 of its 6 items met hurdles for volume, retail turn and profitability: Chocolate Chip, Peanut Butter and Oatmeal. Three sub-par cookie flavors were identified to be discontinued. In order to help select three new cookie flavors to replace those being discontinued, a concept test was done, including a TURF analysis. Both the 3 strong current market performers and 8 new flavor candidates were included in the test (11 total flavors).

In order to use TURF analysis, all respondents have to be exposed to all items. For the LA Cookies test, respondents rated the 3 current items and the 8 new candidates. Order of presentation was appropriately randomized to avoid order bias. For the analysis, unduplicated Top Box Purchase Intent for all possible combinations of cookie flavors was examined, with the existing 3-item group set as a base.

If we focus just on Purchase Intent, the three strongest candidates to replace the discontinued items would be those highlighted in yellow. TURF enables us to also consider the overlap in interested consumers. If these 3 new flavors all appeal to the same consumers the 3 current base flavors are already reaching, they will not expand the reach of the line, and probably will not generate incremental sales.

The TURF results illustrate the impact of measuring unduplicated penetration. In the LA Cookie Company example below, we can see how their consumer base could be extended with flavors that not only had strong Purchase Intent, but appealed to different consumers than the Current base. Using TURF, Ginger Snaps was shown to have more potential than Sugar cookies since it provided significantly greater incremental penetration and not vastly different Purchase Intent. The chart shows the “optimal” solution: the 3 new flavors that would boost penetration the most, to 84%. Based on these results, LA Cookie Company might select Lemon Cream, Ginger Snaps and Chocolate Chocolate Chip cookies to be developed as replacements for the discontinued items.

It is best not to simply seek the one “optimal” solution and stop there. One of the key factors we consider when evaluating TURF results is the power of alternatives. In this hypothetical example, we might find that the cumulative penetration for this set of 3 new flavors: Lemon Cream, Ginger Snaps, Chocolate Mint Chip was 83%. From a practical standpoint this set’s penetration is not any different from the optimal 84%, and may have other qualities to recommend it. Net: it may be appropriate to add Chocolate Mint Chip to the list of flavors to develop.

We don’t look for just the one optimal solution, we evaluate all possible combinations. This in-depth assessment differentiates the Nufer Marketing Research approach to TURF and makes this technique more productive. Our Line Synergy Evaluator can provide the effect of any combination of 1, 2, 3… x items on penetration. With that, you can see what the relative impact of adding or subtracting items might be, or the impact of swapping out one flavor for another.

Summary

Nufer Marketing Research recommends our Line Synergy Evaluator using TURF as an effective way to aid line optimization decisions for both new and existing product lines. The procedure can be used alone or as part of another study, such as prototype product testing.

Nufer Marketing Research, Inc.> is a full service marketing research firm located in Thousand Oaks, California. Visit the company website at www.nufermr.com or email Dr. Nufer.