Building Strong Brands - Case Study Example

Measuring and interpreting Brand Performance Student name Unit name Affiliate Institution Executive Summary From Part A research, Mars Bar brand has the highest market share and a high penetration thus its dominant than the rest of the brands. Mars Bar brand also performed averagely in the number of purchases of the brand made with Kit Kat brand having a high average purchasing frequency. Mars Bar had the highest number of buyers who did not purchase any other brand making it perform better in the sole loyalty. It is followed by Kit Kat and Snickers who aren’t performing to the expectations of the firm. Twix and Nestle Gold on the other hand have zero sole loyalty as all customers who buy their brands also bought other brands. Mars Bar brand is performing best in the brand performance matrix. Although its sole loyalty is higher than the rest, its penetration is still less than half. Marketing Director should not be that comfortable about Mars Bar brand category Buying Rate being the lowest than the rest. Brand salience is defined as the extent to which a brand is thought about or captures the mind of the customer when in a buying situation, while the top of mind awareness is simply the brands a customer can quickly remember in a given category of brands. Brand salience is important as it relates to future customer retention and loyalty. Brand salience can be built through two approaches according to Botha et al (2004), the first method is to base on defining and creating different signs against one equity. The second method is to Build and Own a Unique Outstanding Memory Organizations .This is to increase the brands performance and position through the use of logo, character and music. The use of cues in brand salience building is also important. Price can be used as a cue to quality and make consumers assumes that a higher priced chocolate is better than a lower priced chocolate. Physical attractiveness cue can also be used to make consumers feel attractive when taking chocolates. As discussed earlier, even music, colour and the use of a famous character can be a cue that will promote brand salience. In the demographics and segmentation section, many single people prefer Nestle Gold, Mars Bars and Twix brands respectively. Kit Kat and Snickers are less preferred. Couples however prefer Kit Kat and Twix brands which are at par, and slightly with Nestle Gold and Snickers. Mars Bars brand performed relatively high though Nestle Gold was the leading. In the gender category, female are the highest purchasers compared to the male. The purchases made by the single and the separated are low compared to couples. This may be because the couples are stable financially which enables them to afford the brand. Demographic segmentation is division of market into groups based on variables such as occupation, race and nationality, income, religion, education, family size, gender and age. With change in age, customer needs and wants change though they may still want to have the same type of product. Marketers will therefore design, promote and package products differently to meet the needs and wants of different age groups. In conclusion, the brand performance of Mars Bar brands is in a good position with an opportunity to improve and thus the need for the marketing management to create new ideas to maintain Mars Bars as the leading brand in the market. Introduction This report analyzes the performance of Mars Bar brand among its competitors with emphasis on its brand performance, awareness and salience, and demographics and segmentation. Part A Research discussion. Mars Bar brand is leading the market followed closely by Kit Kat and Snickers. Its least competitor is Nestle Gold, with no sole loyalty and only 6.5% market share. Of all customers observed and interviewed on the brands they bought and the quantity, only 83 of Mars Bar were bought in all 245 totals that were bought.  Depicting that most of the customers preferred it compared to the rest. The buying pattern varies per customer and per brand. Mars Bar being the major competitor dominated the market. Kit Kats dominance is a half percent meaning it has a potential of dominating the market in case the market strategy is improved. Moreover, its marketers should work hard to improve on the market strategy otherwise Twix and Snickers can pause as a time bomb to overcome it. Mars Bar had a lower number of brand purchases made compared to Kit Kat which has highest number of brand purchases. It also has the list number of buying rates to the rest of the brands. The number of brand buyers who made the purchases was more for Mars Bar and Kit Kat compared to Twix Snickers and Nestle Gold. However, though Nestle Gold had the lowest total purchases made, it had the highest consumer buying rate of 8.5% compared to the other brands. Mars Bar had the highest number of buyers who did not purchase any other brand making it perform better in the sole loyalty. It is followed by Kit Kat and Snickers who aren’t performing to the expectations of the firm. Twix and Nestle Gold on the other hand have zero sole loyalty as all customers who buy their brands also bought other brands. Brand Performance. From Table 1 Mars Bar has the largest market share followed by Kit Kat and Snickers. Twix is doing averagely better but Nestle Gold has the least market share. Still Mars Bar has the highest penetration followed by Kit Kat, Snickers and Twix. Nestle has the lowest penetration which is reflected in from the market share. Both Mars and Snickers have high average purchase frequency followed by Snickers and Twix, while Nestle Gold trails behind. In the category buying Rate, Mars Bars drops to last position while Nestle Gold tops, followed up Snickers and Twix and Kit Kat. However, Mars Bar tops in the share category requirements followed by Kit Kat, Snickers and Twix, while Nestle Gold. The sole loyalty for Mars Bar is high compared to Kit Kat and Snickers while Twix and Gold have no sole loyalty. Mars Bar brand is performing best in the brand performance matrix. Although its sole loyalty is higher than the rest, its penetration is still less than half. Marketing Director should not be that comfortable about Mars Bar brand category Buying Rate being the lowest than the rest .Although its performance is at an average, a little emphasise should be put to avoid it form being less than average. On the other hand, its sole loyalty is higher than the rest, which means that its category-buying rate has potential of rising whether it is advertised, or not. There are differences to be expected between a brand performance metrics of a repertoire market and a subscription market in that (Sharp, 2006); In repertoire markets, “buyers are seldom totally loyal .As much as they are in small numbers of purchases, they are entirely not loyal to the brand, but have personal repertoires of chosen brands” (Sharp, 2006). The difference in repertoire pattern of buyers is predictable leading to these markets having a well noted patterns in the marketing metrics (Henning, 2010), the brands depict low levels of buyers, and that is when a buyer of the brand buys it a half times lesser than usual(i.e. lower than 50% share of the required). On the other hand, subscription markets depict higher levels of loyalty in the brands’ metrics that is a large percentage (100%) of loyal buyers. different from repertoire markets, subscription markets customers rarely make regular purchases from a repertoire of its competitors (Sharp, 2006); but they become loyal to one provider for a long time or they tend to give all or most of the parts of their needs to one brand provider thus have very few other providers. Thus each brand is solely loyal. Such markets are; banking services, long distance phone calls, and insurance policies .it also includes other services such as the medical and legal services, plus utilities such as water, electricity in cases of choice of provider. Mars Bar brand therefore falls under repertoire markets as the brand shows very little levels of buyers, and the brand average purchase are bought less than the previous time. Awareness & Salience Brand salience According to Hulbert et al. (2003), Brand salience is defined as the extent to which a brand is thought about or captures the mind of the customer when in a buying situation. Strong brands depict high levels Brand Salience while weak brands have little or no brand salience at all. When consumers only think your brand only during the time of purchase, then the brand could fall in the category of unnoticed brands. The top of mind awareness is simply the brands a customer can quickly remember in a given category of brands (Aaker, 2011). Brand Salience does differ from top of mind awareness and attitude. This is because Brand salience is when a consumer pictures a certain brand when purchasing. In details, Brand Salience is simply the memory of the brand and its connection to key memory structures. Buying situation and connection to memory structures differentiates Brand Salience from top of mind awareness.  Brand Salience is made up of a function of two main things; a) quantity of memory structures that the brand is connected to it; and b) the structures quality, measured by the strength of collaboration and the importance of the structure. By building the quantity and quality of memory structures, one is able to increase the consumers’ numbers that will think of the brand. The rate of the memory structures can be depicted during purchasing periods, since consumers are often lead by the mental “cues” that revolve their thinking in brand consideration groups. Brand salience is important as it relates to future customer retention and loyalty. Consumers who use brands that aren’t very salient have defect in future at a high rate. Brand salience is also important to management as it acts as the main measure in analysing brand performance, which is a long run thing (Aaker, 2011). This also provides a strategy for advertising which makes sure it maintains the brand salient. Besides its contents, advertisements grab customers’ attention and makes their mind think of the brand. Therefore, the main aim of any kind of advertisement should be to receive the right attention from the prospective consumers. According to Table 2 Mars Bars brand is performing better than the rest. With its overall brand awareness is high with 41% of it attaining top of mind awareness. Brand salience for users only is performing as expected from the overall brand awareness as the second brand apart from the Nestle Gold. It is therefore important to look at salience for brand users separately in order to know which brand is performing as expected and which is not. This will enable the management to strategize on how to increase its customer base as well as rate of brand salience for those brands. Having discussed the importance of brand salience, it is crucial to know how to build and enhance brand salience. The focus should not be on what the company aims so that its customers do think about its brand, but rather how it can make them to always remember the brand. When a brand has a broad range of attributes, there is a greater chance that it will be considered and therefore purchases. It is important to build and emphasize on association that consumers hold about the brand. The brand is more likely to be purchased if the associations among customers are greater and stronger.  Marketing strategy should focus on availing the brand and making it accessible. This thus requires communication strategists, advertising agencies and consumer insight specialists to see the strategic need for the brand salience building. Brand salience can be build through two approaches; The first approach is by focusing on explaining and sending the right messages in different cues in relation to one common goal. Consumer research is needed to understand the most relevant cues for the brand.   Assuming you’ve. Brands therefore need to portray creativity in relation to the cues used so as to enlarge on number of memory structure that was intended. The second approach is to innovate and to have a remarkable Memory Structures .This is meant to improve memory structures quantity and quality through uses of logo, character and music. This evectional memory structure creates a plat form that allows consumers to have a good memory the brand when in buying situations. Cues are very important in an advertisement. People purchase goods based on perceptions. Furthermore, perceptions are influenced by cues sent by packaging, advertising, and brochure and so on. Cues can be used in the promotion of a chocolate such cues includes the packaging, the brand name, use of words, colours, scents, image and emotions. Price can be used as a cue to quality and make consumers assumes that a higher priced chocolate is better than a lower priced chocolate. Physical attractiveness cue can also be used to make consumers feel attractive when taking chocolates. This is portrayed by using a model or a celebrity in the advertisement. Demographics & Segmentation According to Table 3 (Demographic –relationship status), many single people prefer Nestle Gold, Mars Bars and Twix brands respectively. Kit Kat and Snickers are less preferred. Couples however prefer Kit Kat and Twix brands which are at par, and slightly with Nestle Gold and Snickers .Mars Bar is the least preferred. In the divorced and separated category, Mars Bars has low market share compared to Snickers. The purchases made by the single and the separated are low compared to couples. This may be because the couples are stable financially which enables them to afford the brand. Table 4 (Demographic - Total Household income) shows household income categories that spend on Mars Bar brands and its competitors. Mars Bar brand performs well in households whose income is less than $50,000. It also performs best in the households whose income is $50,000 -$70,000. However, it performs poorly in households whose income is more than $70,000. From the findings Mars Bars seems cheap because it has the lowest purchase from the high earners and the highest purchases made by lowest earners. Table 5 (Demographics –Gender) shows how Mars Bars performs in gender compared to its competitors. Mars Bars performs highly in the male category .However it performs poorly in female category .Female prefer Kit Kat while male prefer the competitor probably because Kit Kat products are female friendly in terms of what women like as compared to male. The Implications of Demographics and segmentation on the market strategy Demographic segmentation is division of market into groups based on variables such as occupation, race and nationality, income, religion, education, family size, gender and age (Botha et al., 2004). With change in age, customer needs and wants change though they may still want to have the same type of product. Marketers will therefore design, promote and package products differently to meet the needs and wants of different age groups. In toothpaste marketing the brand of children toothpaste will be branded differently from the adult toothpaste. Toys on the other hand will be branded and packaged differently depending with the age segments. Life-cycle is also an important variable particularly in tourism and leisure market. The promotional and product approach of clubs will vary by life-cycle stage. Differently gender categories (female and male) prefer different clothing, cosmetics, toiletries, magazines and hairdressing and marketers should ensure that each category has what it needs. The income variable is also another popular segmentation. Companies will target their products and services and promotional activities on consumers in a certain income levels.  Many firms target high earners with luxury goods and convenient services and at the same time market products that are more appealing to consumers with low income. It is believed that ‘perceived’ social class of consumers influences their preferences for leisure activities, home furnishings, cars and clothes. This also is linked to income-based segmentation. Different social classes consume different products and their promotional strategy will also vary. Recommendation The marketers should come up with more marketing strategy in order to remain as the main competitor so as to continue ruling the market. To improve brand awareness, its marketers should try to improve on its packaging, advertising, presentation, promotion and the product itself. The marketers should also try to increase its market share by reaching the niche it performs poorly and increase in sole loyalty and buying rate of the brand.  Conclusion The brand performance of Mars Bar brands is in a good position with an opportunity to improve. It does not face stiff competition in the market as it is a strong brand compared to other brands. The competition management however has to come up with more new strategies that will ensure the stability of the brand in the market.           References Aaker, D.A., 2011. Building Strong Brands. New York: Free Press. Botha, J., Strydom, J. & Brink, A., 2004. Introduction To Marketing. Cape Town: Juta and Co LTD. Henning, J., 2010. Subscription vs. Repertoire Markets. [Online] Available at: HYPERLINK "http://blog.vovici.com/blog/bid/45708/Subscription-vs-Repertoire-Markets" http://blog.vovici.com/blog/bid/45708/Subscription-vs-Repertoire-Markets [Accessed 18 May 2012]. Hulbert, J.M., Capon, N. & Piercy, N., 2003. Total Integrated Marketing: Breaking the Bounds of the Function. New York: Kogan Page Publishers. Sharp, B., 2006. Loyalt limits for Rerpertoire markets. [Online] Available at: HYPERLINK "http://members.byronsharp.com/empgens/ByronEmpgens%20Dec07.pdf" http://members.byronsharp.com/empgens/ByronEmpgens%20Dec07.pdf [Accessed 18 May 2012]. Appendices Table 1: Brand Performance Measures Brand Market Share Penetration Average Purchase Frequency Category Buying Rate Share of Category Requirements Sole Loyalty Mars Bar 34% 74% 2.2 5.8 39% 22% Kit Kat 24% 52% 2.3 6.2 37% 8% Snickers 20% 48% 2 7.4 27% 4% Twix 16% 46% 1.7 7.3 23% 0% Nestle Gold 7% 26% 1.2 8.5 14% 0% Average 20% 49% 1.9 7.0 28% 7% Mars Bar has a market share of 34%, it means Mars Bar sales 34% of total sales. Mars Bar has a penetration level of 74%, it means there is 74% shoppers purchased Mars Bar. Mars Bar has a average purchase frequency of 2.24, it means the average purchase per buyer is 2.24. Mars Bar has a category buying rate of 5.76, it means the average purchase per Mars Bar shopper is 5.76. Mars Bar has a share of category requirements of 39%, it means the percentage of category sales that buyers of Mars Bar give to Mars Bar is 39%. Mars Bar has a sole loyalty of 22%, it means the proportion of Mars Bar’s buyers that only buy Mars Bar is 22%. Workings for calculations: Market Share: Twix=(39/245)*100=16% Snickers=(48/245)*100=20% Mars Bar=(83/245)*100=34% Kit Kat=(59/245)*100=24% Nestle Gold=(16/245)*100=7% Penetration: Twix=(23/50)*100=46% Snickers=(24/50)*100=48% Mars Bar=(37/50)*100=74% Kit Kat=(26/50)*100=52% Nestle Gold=(13/50)*100=26% Average Purchase Frequency: Twix=39/23=1.70 Snickers=48/24=2 Mars Bar=83/37=2.24 Kit Kat=59/26=2.27 Nestle Gold=16/13=1.23 Category Buying Rate: Twix=168/23=7.30 Snickers=178/24=7.42 Mars Bar=213/37=5.76 Kit Kat=160/26=6.15 Nestle Gold=111/13=8.54 Share of Category Requirements: Twix=(1.70/7.30)*100=23% Snickers=(2/7.42)*100=27% Mars Bar=(2.24/5.76)*100=39% Kit Kat=(2.27/6.15)*100=37% Nestle Gold=(1.23/8.54)*100=14% Solely Loyal: Twix=(0/23)*100=0% Snickers=(1/24)*100=4% Mars Bar=(8/37)*100=22% Kit Kat=(2/26)*100=8% Nestle Gold=(0/13)*100=0% Read More