al berrios & co. Analysis of the NonAthletic Footwear Segment Consumer With A Focus on Timberland And The Launch of Their New Roll Top Boot Conducted, Authored, & Prepared by Al Berrios, Managing Director, al berrios & co. March 2003 OVERVIEW Between February 7th and February 15th, 2003, al berrios & co. was engaged by The Timberland Company to generate nationwide awareness for the launch of its new Roll Top Boot using the internet. At completion of engagement, al berrios & co. associates used our innovative methodology to analyze the responses of 6.6% of the 149,440 consumers reached. Every interaction was conducted online. The Timberland Company did not sponsor this Analysis. CONTENTS: 1) METHODOLOGY 4) COMPETITION 2) POPULATION 5) RETAILERS 3) PRICE 6) PREFERENCE 7) EFFECTIVENESS METHODOLOGY By locating preferred chat and forum communities, al berrios & co. leverages the power of the internet to effectively interact with large numbers of consumers simultaneously and at random. Once these consumers were located, the goal of al berrios & co. associates was to generate interest within the entire community. (al berrios & co. defines interest when at least 25% of consumers within a community engages in the same discussion as the al berrios & co. associate). Once interest has been achieved, associates proceeded to generate awareness and ask questions, the answers to which would ultimately be analyzed by al berrios & co. Individual answers were considered as representative of the entire community. As this was neither an engagement to survey, nor a planned survey, al berrios & co. associates did not make consumers aware that their commentary was going to be analyzed in any way. This approach is comparable to observing thousands of shoppers around a store as they select items to place in their shopping carts. POPULATION al berrios & co. did not collect specific demographic information however, based on communities selected, we assured a representative sample of ages (from 12-39), lifestyles (gay, hiphop), ethnic groups (Asian, Black, Caucasian, and Latino), and geographical locations (only geographic boundary was U.S.) PRICE Without historical data and a fully transparent or owned production, distribution, and retail system, it is almost impossible to accurately forecast price points for new products that consumers would be willing to pay for, that also takes into account brand equity. al berrios & co. discovered: > 34.67% of the total consumers reached discussed some sort of pricing for the new Timberland Roll Top Boot. > The average price consumers were willing to pay is $129.59. > 7.5% of total consumers reached expressed interest in some kind of reduced price offer from Timberland. > 7.46% of consumers demonstrated intent to buy Roll Top Boot. COMPETITION During our interaction with consumers regarding the release of a new Timberland product, 17.39% of total consumers reached discussed another brand (unprompted by al berrios & co. associates and not related to the non-athletic footwear segment. This response may be indicative of the consumers’ lack of differentiation between athletic and non-athletic functionality, along the trend of using SUVs for non-SUV purposes, such as going to the mall.) Of notable mention was that every single consumer that mentioned Nike Airforce Ones preferred to purchase AF1s only, or before Roll Top. COMPETITION Vans 6 .3 5 % 3 .7 9 % Uptowns/Adidas/Akade miks/Polo O siris Nike Jordans Nike (all brands) Manolos 2 .2 7 % 1 .8 6 % 2 .6 2 % 2 .9 1 % 5 .2 4 % Lugs Jordans Gucci "Timz " 2 .9 1 % 2 .0 4 % 4 .4 3 % Gore te x GBX 1 .9 8 % 1 5 .4 4 % FUBU Dr. Martins 2 .9 1 % 6% Dolomite s Die se ls 1 .9 2 % 5 .7 7 % Conve rse * 2 0 .8 0 % Nike Air Force O ne s 0.00% 5.00% 10.00% *The Converse “Chuck T” was specifically mentioned, but not by entire group. Note: Figures do not add up to 100%. These calculations tabulate brand mentions. % of Consumers 15.00% 20.00% 25.00% RETAILERS For manufacturers planning an effective distribution plan that aims to reach the consumers most likely to purchase your product, visibility has been relegated to historical data and/or prior relationships. Upon learning other footwear brands consumers were likely to wear other than Timberland, 2.62% of consumers told al berrios & co. the channels they frequent for their footwear. RETAILERS 46.33% Black Marke t 16.99% Payle ss 12.74% Finish Line 23.94% FootLocke r 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% % of Consumers 30.00% 35.00% 40.00% 45.00% 50.00% PREFERENCE al berrios & co. recommends to manufacturers without Timberland’s brand equity to gauge consumer sentiments pre-production. al berrios & co. associates discovered that although 35.82% of consumers thought the Roll Top Boot was “nice”, “cute”, “interesting”, or “cool”, 13.05% thought the Roll Top was either not their style (with comments like “ghetto”, “hideous”, and “ugly” used frequently) or because of a perception of high price. A common request were blue Timberlands, with 2.33% of consumers bringing it up without prompting. Other colors mentioned were black, brown, gray, and white. At time of engagement, 6.56% of consumers reached already owned a Timberland product. Keep in mind, this kind of feedback about a new product was achieved because 78.97% of consumers reached visited or expressed intent to visit product website. TRENDS > Music preference at time of this engagement: Hip Hop, with artist 50 Cent dominating discussions, and Ja Rule losing street credibility. > Gender most likely to purchase non-athletic footwear: Males > Female consumers have expressed interest in this footwear segment that traditionally under serves them. al berrios & co. recommends that future non-athletic footwear designs interested in capturing this market should contain elements of dress shoes (i.e. high heels), with narrower designs. EFFECTIVENESS Finally, in order to present to Timberland the effectiveness of using our methodology, al berrios & co. gauged pre-awareness, with post-awareness being the total 149,440 consumers reached for during this engagement. 4.73% of consumers reached were pre-aware of the Roll Top Boot. This group was among those that visited the product website, which either means that we effectively located trendsetters, who are typically aware of new products several years in advance, or that they reside in markets where Timberland had previously marketed the Roll Top Boot. This group was not among the group that acquired footwear through the “black market”. To engage al berrios & co., contact Al Berrios at al@alberrios.com or (917) 744-6579