Product Intelligence Competitor Intelligence Market Intelligence Customer Intelligence

Product Intelligence Competitor Intelligence Market Intelligence Customer Intelligence The Martec Group, Inc. Enabling Execution Through Insight Capabilities Overview Customer Intelligence Clinics CHICAGO • DETROIT • FRANKFURT • SHANGHAI • BEIJING The Martec Group Confidential

When your list of goals looks like a Post-It explosion… Q 1 Goals Better marketing and sell-in materials Optimize product offerings, placement, and merchandising support The Martec Group Support demand creation at the retailers Uncover unique segmentation perspectives Stronger price positioning Provide information to retailers that they may not know about their customers Confidential

…Martec has a unique “one-stop shop” solution to gather a range of B 2 B or B 2 C buyer/customer insights Customer Insights Buyer Insights New Product/Con cept Testing Purchase Occasion Channel/Sto re Selection & Loyalty Customer Intelligence Clinic Planned vs. Impulse Purchases Price Elasticity Brand Preference, Imagery and Loyalty Market Basket The Martec Group Product Attitudes, Usage 3 Confidential

The core process involves multiple steps/methods of gathering information. Simulation Room Product Room (simulated shopping) (hands-on product testing) LOUNGE 11 x 14 VIEWING 15 x 26 Discussion Groups CLT VIEWING 24 x 12 - 6 Prior to arrival, respondents complete a screening questionnaire • Serves to recruit and pre-qualify each respondent in terms of demographics and attitudinal/background information • Respondents can include endusers/customers, dealers, distributors, installers, contractors, etc. A participant background worksheet is completed upon arrival to more fully understand shopping patterns/behavior • Preferred channels/stores; frequency of shopping; market basket, etc. Brand perceptions captured via PC-based exercise PHONE CLIENT OFFICE 12 x 10 SERVICE AREA VIEWING 14 x 17 - 6 PC-based Exercise OFFICE 11 x 9 AV 11 x 8 Participant Background COPY ROOM 16 x 14 RECEPTION 24 x 18 Self-administered surveys are used in the product and simulation rooms • Simulated aisles; new products; new packaging concepts; new formats; etc. • Ethnographic • Merchandising and promotions testing Respondents participate in a group discussion to fully explore attitudes/perceptions regarding the products/issues ENTRY The Martec Group Confidential

Case Study: Customer Intelligence Clinic - “Product X” in the Automotive Retailer Channel - The Martec Group 5 Confidential

Project Background • Our client sells “Product X” into multiple segments, including manufacturing (food processing, oil/mining, and other areas of manufacturing) and vehicle service and repair, both DIY and DIFM (dealerships, repair shops, etc. ). • Our client was developing marketing and sell-in materials for leading automotive retailers and needed to better understand what was driving customers’ purchase decisions and usage (past, current, and future) of similar products. • Client management used our information and analysis to more effectively address and impact the customer purchase decision (current and future), ultimately driving growth in this important channel. • The Martec Group was commissioned to conduct proprietary market research to assist our client with the required customer insights. The Martec Group Confidential

Research involved 200 customers of similar products, covering a variety of demographic and behavioral segments. Conducted in multiple locations. • Selected due to representative mix of demographics along with coverage of key retailers (Advance, Auto Zone, O’Reilly’s, etc. ) Target audience: Customers who utilize “Product X” and similar products and purchase via “retail” stores • Auto retailers – Advance Auto, Auto Zone, O’Reilly’s, CARQUEST, NAPA • Mass merchandisers – Wal-Mart, Sam’s Club, Sears, Dollar Stores • Home center/hardware stores – Ace, True Value, Tractor Supply, Home Depot, Lowes • Currently purchasing or recent purchasers of these types of products Demographics • 75% male/25% female • Variety of occupations (targeted ~25% professional trades/mechanics) Shopping behavior • 55% of respondents “preferred” retailer = automotive retailer (remainder split between mass merchandisers and home center/hardware) • Mix of buyers – for work, for home, purchasing for family/business, etc. The Martec Group Confidential

Specific insights gathered… Understand typical usage and purchase patterns for these products, brand(s) purchased • Preferred retailers and brands – with reasons (why do you shop at _____? ) • Purchase frequency and occasion • Intended place of use and frequency Understand the customer Decision Tree • Key purchase criteria and importance (brand, make-up/format, container size, price, etc. ) • What does the end customer know about the product, how do they get their information? Measure brand perceptions and performance • What are the drivers or triggers that cause a Customer to consider and purchase specific brands? Evaluate new products/concepts • Current competitive set of products on hand for evaluation by respondents • Included product trial and fragrance testing Measure price elasticity for current competitive set as well as product concepts The Martec Group Confidential

Sample Insights Key takeaways/ insights are highlighted The Martec Group 9 Confidential

There is significant cross-over between product usage at home and at work, particularly among men (~48%). Predominantly an “individual” purchase – not a significant share for “family use” or “employee use”. • Also evident in attitudinal responses – don’t see much reliance on “others” for advice, etc. Which of the following best describes your purchases of these types of products within the past 12 months? 100% 1% 5% 2% 4% Percent of Respondents 90% 80% 70% 15% 40% 48% 18% 4% 60% 5% 5% 40% 30% 20% 59% 45% Overall Male 10% 0% Use at Home The Martec Group Use at work Use at home & work Female Family Use Employee Use Confidential

Purchase Occasion Insights How often do you purchase for home/work? 40% The more frequent buyers (weekly/monthly) are less prices sensitive, more brand loyal and prefer to shop at auto retailers. Percent of Respondents 35% 36% 30% 25% 20% 21% 19% 15% 16% 10% 7% 5% 0% Weekly The Martec Group 1% Monthly Every 2 -3 months 2 -3 times per year About once per year Less than once per year Confidential

Shopping Behavior Insights Please rate your level of agreement with each of the following statements regarding your purchase, and usage, of the product. One to seven scale – where one indicates completely disagree and seven indicates completely agree. Top 2 Box (6 or 7) Bottom 2 Box (1 or 2) I buy from more than one store I often take samples of these types of products, when they are available Customers are purchasing from multiple stores. I check the prices on what I purchase I am familiar with several different brands Once I find a product or brand I like, I stick with it I want to be able to try samples before buying a new brand or type Although familiar with many brands, they seem to be fairly brand loyal. There is a large difference among brands I find these products are the same so it makes sense to buy the cheapest 0% 20% 40% 60% 80% 100% Percent of Respondents The Martec Group 12 Confidential

Purchase Insights (e. g. “Impulse” and “Planned”) Which of the following best describes your purchase? Planned buyers tend to buy less frequently; tend to shop more often at auto retailers; buy larger sizes; are more loyal to a “store” and brand I decided/planned this purchase at home or before I entered the store I decided to purchase this product while I was shopping, but before I reached the aisle/display Impulse buyers tend to buy more frequently; shop more often at mass merchandisers; buy smaller sizes; are not as loyal to a “store” or brand I decided to purchase this product when I saw it on the shelf 0% The Martec Group 20% 40% 60% 80% Percent of Respondents Confidential

Store/Brand Selection and Loyalty Insights Approximately 55 percent of the participants “preferred” purchasing at auto retailers (Auto. Zone, Advance, O’Reilly’s, NAPA and CARQUEST). From which of the following places have you purchased within the past 12 months? Which is your preferred source? Auto. Zone Wal-Mart Advance Auto Many retailers widely shopped, but a couple of clear favorites. Lowes NAPA Dollar Stores O'Reilly's Home Depot Client didn’t realize nonauto (i. e. Wal-Mart) was so prominent. Sam's Club Other Tractor Supply Ace Hardware Percent of Respondents CARQUEST 0% 10% 20% 30% Purchased past 12 months The Martec Group 40% 50% 60% 70% Preferred Confidential

Market Basket Insights When you are purchasing, how frequently do you purchase the product categories below at the same time as the product in question? @ Auto Parts Retailers Rarely/Never Sometimes Often/Regularly Oil change products Fluids Brake parts 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% @ Home Centers/Hardware Stores Customers often bundled the subject product with other products. Paint supplies Landscaping/gardening materials Kitchen/bathroom repair products 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% @ Mass Merchandisers Automotive repair products Paint & paint supplies The Martec Group Percent of Respondents 15 Confidential

Quantitative Usage Insights Predominantly an “individual” purchase – not a significant share for “family use” or “employee use”. Which of the following best describes your purchases within the past 12 months? 100% Percent of Respondents 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Overall Use at Home The Martec Group Male Use at work Use at home & work Female Family Use Employee Use Confidential

Quantitative Usage Insights Leading activities where the product is used… 100% Restore classic cars Usage Percent of respondents that “regularly” use after this activity Automotive Initial focus was on Automotive Retailers only…research highlighted need for a dual channel strategy 50% Hunting Ceramics/p ottery Snowmobiling Auto repair Home Improvement Painting Furniture refinish Plumbing Camping Motorcycles/ Arts & dirt bikes crafts 4 x 4 off road Hiking Home repair Gardening Fishing Landscaping Appliance repair Biking Boating/ Jet ski 0% 0% 50% 100% Frequency of Activity Percent of respondents that “sometimes” or “often/regularly” participate in… The Martec Group Confidential

Key Purchase Criteria Insights Stated vs. Derived Importance Quadrant Analysis 2 Entry Tickets 1 Critically Important 5 Stated Importance – Top 2 -Box Ratings 3 14 15 Several purchase criteria were classified as “critically important” that were previously thought to be “entry tickets” 7 6 17 18 16 19 25 22 24 4 8 10 9 20 11 12 23 26 21 13 Undeveloped Intrinsically Important Derived Importance (based on overall satisfaction) The Martec Group Confidential

Price Elasticity Insights Acceptable Price Range ~$4. 25 to $6. 50 100 90 80 70 60 Optimal Price ~$5. 75 50 Analysis of multiple brands 40 PME 30 20 Customers consistently had higher acceptable price ranges for client brand vs. competition PMC 10 $0. 5 0 $1. 0 0 $1. 5 0 $2. 0 0 $2. 5 0 $3. 0 0 $3. 5 0 $4. 0 0 $4. 5 0 $5. 0 0 $5. 5 0 $6. 0 0 $6. 5 0 $7. 0 0 $7. 5 0 $8. 0 0 $8. 5 0 $9. 0 0 $9. 5 $1 0 0. 0 $1 0 0. 5 $1 0 1. 0 $1 0 1. 5 $1 0 2. 0 $ 0 12. 5 $ 0 13. 0 $ 0 13. 5 $ 0 14. 0 $ 0 14. 5 $ 0 15. 0 0 0 Inexpensive The Martec Group Expensive Too expensive Too inexpensive Confidential

Additional merchandising and improved packaging for the offering are needed. Merchandising is required to take advantage of the high percentage of impulse purchases. • Merchandising issues seem to focus less on deals (coupons, sales, etc. ) and more on samples ("get them to try it") • Bundling with other products could improve top-of-mind awareness in general and specifically for our client Ø Multiple “baskets” are possible – automotive (cleaning, oil change, etc. ); indoor home; outdoor home “I would consider purchasing a package with oil, an oil filter and a small bottle of heavyduty hand cleaner. ” • Samples are essential – meet customers at the door of the retailer with opportunities to try product Ø Most arrive in need of your product The Martec Group Confidential

Purchase Intention Insights How likely would you be to purchase the brand/product at the price you identified as “expensive, but still a possible purchase”? Bottom 2 - Box Top 2 - Box 36% 16% Confirmed that there was purchase activity at the high end 24% 12% 15% 11% 9% 5% 1 - Not at all likely The Martec Group 2 3 4 Percent of Respondents 5 6 7 - Extremely likely Confidential

Contacts Thank you for this opportunity. Detroit 27777 Franklin Road Suite 1600 Southfield, Michigan 48034 (248) 327 -8000 Chicago 105 West Adams Street Suite 2125 Chicago, Illinois 60603 (312) 606 -9690 China 121 Yanping Road Sanhe Plaza 10 B Shanghai 200042 China +86 (21) 6246 -2121 Europe Berliner Strasse 219 63067 Offenbach/Main Germany + 49 69 80903 60 martecgroup. com The Martec Group Confidential