Case studies

*    Coles Myer

Challenge

Coles Myer needed to quantify the change of consumption due to GST and predict how it would affect overall revenue. Successful prediction would allow them to optimise their inventory and staffing levels thus maximising benefits.

Approach

The project involved the development of innovative measures to predict the change of consumption GST would cause both before and after its introduction.  The analysis applied across all of Coles Myer’s businesses and product categories. 

A number of methods were reviewed ranging from simple consumption estimates through to complicated multi-variate analyses.  Final estimates relied on simple consumption estimates and repeat measures to ensure reliability rather than the more complicated multi-variate methods.  This was because of the large number of categories and the need for face validity.  This national project involved 50 focus groups and 10,000 CATI interviews carried out in five rounds.

Outcome

Coles Myer successfully implemented the results into their planning for GST.  Predictions of both timing and strength of GST related surges and strikes have proven to be very close to those found by the Australian Bureau of Statistics, other researchers and Coles Myer's own sales figures. The method was used successfully for other clients including Optus, ANZ, Pacific Dunlop and the Victorian Government.

 

*    Tollway

Challenge

Project 1 - Prior to opening, Transurban CityLink needed to know how many people would use the road, who would be the early and middle adopters and what would motivate them to use the road. In addition the uptake of new automated system of tags needed to be evaluated.

Project 2 – Transurban CityLink had been operating for some time and revenue growth was beginning to ease. They needed new intelligence to guide accelerated growth.

Approach

In both cases, rigorous market research was carried out to segment the market and identify the drivers of use in both the consumer and business markets. Particular emphasis was given to the impact of user pays, value of time and other road features and benefits such as ease of navigation and safety. It identified a set of features and benefits that could be emphasised to maximise market uptake.

In each project, eight focus groups were carried out and a telephone survey of 1,500 respondents in both the consumer and business market.

Outcome

Market predictions of initial uptake were reliable and the composition of the take up confirmed by the second project. In both cases, programs were put in place to maximise market benefits.

*    Water utilities

Challenge

Water conservation is a critical factor for Australian water utilities yet the means of changing consumer behaviour are limited by government regulation. Changing the bill was seen as having potential merit in leading to conservation behaviour.

Approach

The project involved a choice experiment of potential bill structures and tariff levels (leading to revenue neutrality) for a consortium of five water companies.

The project involved 2,000 telephone-mail-telephone interviews and 8 focus groups.

A model of price elasticity was developed that predicted for the optimum bill structure a saving of 13% in water consumption could be achieved with no change in revenue.

Outcome

One of the water companies changed their bill structure according to the recommendations and achieved water savings of 10% over the companies that did not change. Other companies are now changing their bills according to the principles outlined by the research.

*    Electricity distribution companies

Challenge

Capital and maintenance costs are high in electrical distribution businesses. On the one hand, there is constant pressure from regulators to increase reliability and on the other there was little understanding, from a consumers’ perspective, of how good is good enough. The businesses needed to know whether consumers demand perfectly reliable power, and if not, what were acceptable standards.

Approach

The project involved a choice experiment of varying reliability and some changes in tariff.

Four projects have been completed involving more than 8,000 telephone surveys.

The choice models indicated that customers do not generally demand perfectly reliable electricity supply. Their demands vary from place to place according to their supply history. It was shown that if simple network measures are used to set service standards, approximately one half of the improvements will be given to consumers that don’t demand it.

Outcome

The measures are now being used in planning capital and maintenance programs.

*    Federation Square - Melbourne

Challenge

The design of Federation Square was well under way but a use had not been determined. Several use concepts had been developed by a consultant and the project team but there was no intelligence available to determine which would maximise visitor numbers.

Approach

The project involved six focus groups and 1,000 telephone interviews. The development options were fully described and tested. Each had a different combination of retail and public offerings ranging from base consumer appetites (takeaways) to upscale art and food offerings.

Outcome

The present offering more or less reflects the recommendations. Visitation numbers are within 5% of the estimate of 1 million for the first year of operation three years after opening.

 

*    Telstra (Telecom Technologies) - consumers

Challenge

Telstra needed a method for deciding the appropriate target segments for ‘conventional’ telecommunications hardware in the consumer markets. They also needed to know when a product had achieved sufficient maturity to be sold through discount department stores without cannibalising sales at the high to medium end retail sales outlets

Approach

The project involved developing measures of product use and market appetite. Market segments were developed which included orientation to communications and technology and a range of other related activities, most particularly, telecommunications use. Using innovative statistical matching processes, technology was plotted onto a migration path which clearly identified its maturity in the market and the point at which it became a candidate for sale in discount department stores.

The project involved 1,000 telephone interviews and 8 focus groups.

Outcome

Telstra successfully implemented a sales and marketing campaign which ensured the right product was targeted to the right market segments, with the right messages and at the right retail outlets.