DAO Web Page of Fame

Celebrating Summer Successes Since 2006

  INDUCTEE:  Roberto Brillembourg

YEAR:   2008

CATEGORY: Regression


Roberto Brillembourg worked for Kraft foods this summer on Tassimo--a single-serve coffee maker that uses coffee pods or T-Discs.  T-Discs can can be purchased in retail stores or online either one-at-a-time or through a continuity program.

The brand team's hypothesis was that the continuity program is the most valuable channel and hence worthy of marketing investment. Specifically the team thinks that single serve coffee is an expandable consumption category where the T-Discs on hand causes increased consumption.  Pushing the continuity program would therefore lead to increased consumption. 

What we know is that, continuity users drink a lot of coffee. The brand team thinks that this is because the continuity program affects consumption. Roberto thinks it might be that heavy users just tend to join continuity more often.

To examine this question, Roberto found a tracking study which montiored weekly coffee consumption for thousands of households over a two year period using a microchip placed in their Tassimo coffee machine.  Half of the observations were "on continuity" while the other half was "off continuity". 

Initially Roberto observed that overall average consumption “on” was higher than the average of consumption “off” continuity.  For individual consumers who where sometimes in and sometimes out, their average consumption was usually higher when in the continuity program.

Because of the strong seasonal trends, however, these averages could be misleading. For example temperature (blue) clearly has an inverse relationship to consumption as show below:

Roberto used regression analysis to control for the effects of seasonality and temperature to get a better measure of the lift provided solely from the continuity program. The continuity variable had a high T stat with a positive coefficient. Hence, the regression demonstrated that when people join continuity they tend to consume more T-Discs per week than they normally would.

Kraft marketing used this information and moved forward with the incentive program. The regression results helped determine how much money to spend on incenting consumers to enter this continuity channel.