TURFing Your Way to Successful New Product Introductions

In today's hyper-competitive marketplace for consumer packaged goods, new product introductions and line extensions are the lifeblood of continued marketing success. The decision to introduce a new product line, or to add varieties to an existing product line (i.e., a line extension), is one of the most important decisions a brand manager makes.

Take the example of a major food manufacturer who wants to introduce a new line of frozen novelties. Even though they could make ten delicious flavors, the way grocery store shelves are managed, there's only room for three to five. To decide how to whittle things down, the brand manager needs to find the answers to these questions:

1. How many flavors should I introduce?
2. Which combination of flavors will achieve the greatest household penetration?
3. Which combination will achieve the highest sales volume?

One way to answer these questions is through TURF (Total Unduplicated Reach and Frequency), an analytical technique that can identify the product line that maximizes reach (penetration) and frequency (sales occasions).

One of the more interesting findings that can occur through TURF is that optimizing a product line isn't necessarily about finding which flavors are the most popular and simply going with them because of their individual appeal. The prospect of cannibalization figures large. The key is finding out which flavors have the most unduplicated reach. This may mean that after the TURF analysis, the most popular (say, Very Cherry) and the third-most popular (Mango Tango) flavors get chosen for the new product line. As appealing as Rockin' Raspberry (second-most popular) might have been to the TURF participants, in the real marketplace, including Rockin' Raspberry would have been a mistake.

The beauty of the TURF analysis is that it keeps the overall health of the product line front and center, with varieties subservient to it.

Maximizing Product Reach

"Reach" is defined as the number of consumers that would be interested in at least one of the flavors offered. The reach for each flavor is simply the level of positive purchase intent for that flavor. The highest scoring flavor will have the highest reach. However, the reach for a two-flavor line is not the sum of the positive purchase intent for the two flavors, because this would produce duplicated reach -- some of the people who like flavor A also like flavor B.

Consider a simple example using our three frozen novelty flavors. Very Cherry has 75% reach, Rockin' Raspberry has 40% reach, and Mango Tango has 25% reach. Given just this information, one might conclude that the two-flavor line with the highest reach would consist of Very Cherry and Rockin' Raspberry. However, this conclusion does not consider duplicated reach, as shown in the diagram below.

TURF analysis reveals that a line consisting of Very Cherry and Rockin' Raspberry would provide unduplicated reach of 85% (35% + 30% + 10% + 10%). This is good, but not as good as a line with Very Cherry and Mango Tango, which has unduplicated reach of 90% (35% + 30% + 10% + 15%).

To maximize reach, TURF analysis starts with a two-flavor line and continues through three flavors, four flavors, etc. -- examining all possible combinations of purchase intent responses--until it reaches the number of flavors that produce the maximum potential unduplicated reach (i.e., all consumers interested in the concept are interested in at least one flavor).

Maximizing Product Frequency

"Frequency" is defined as the average number of purchases per household for a product line, given a specific combination of flavors in the line. To maximize frequency, TURF analysis uses the average frequency of purchase among purchase intenders for each flavor to determine which combination will yield the greatest frequency (or sales occasions) for the line.

Similar to the reach analysis, the TURF frequency analysis is an iterative process. The frequency responses of all possible combinations of flavor purchase intenders are examined to determine the line that provides the greatest potential purchase frequency, or sales occasions. As the number of possible flavors increases, the combinations become more complex, making TURF analysis an important component in the line optimization process.

Shapley Values

In the past few years a new analytic technique called Shapley Value analysis has gained in popularity when determining line extensions or new product lines.

Shapley Values come from the cooperative game theory field. Conceptually they are very simple. To calculate a Shapley Value we look at the how many consumers would find at least one of the products/flavor in the combination appealing - i.e. the Reach that is calculated in a TURF analysis.

To evaluate the strength of any particular product/flavor, we compare the average reach of all possible combinations that include that product/flavor to the average reach of all possible combinations that do not include it. The bigger the difference, the more important is that product/flavor to the overall line. Each product / flavor is assigned a Shapley Value indicating the worth of that product/flavor over all the possible combinations. We can then rank all the products/flavors by its worth, from most to least.