Measuring and Interpreting Brand Performance - Kit Kat Brand - Case Study Example

Heading: Measuring and Interpreting Brand Performance Your name: Course name: Professors’ name: Date Executive summary The aim of this report is to demonstrate the performance of Kit Kat brand in the market. By using brand performance metrics, the brand’s performance can be measured and interpreted in relation to its position among its competitors; Nestle Gold, Twix, Snickers and Mars Bar. According to the results, it is clear that the brand is experiencing stiff competition from the aforementioned rivals. Moreover, Kit Kat is operating in a repertoire market whereby consumers have preference share, buy the brand because they want it, and have a wide variety of alternatives from which to choose. Moreover, in this market, buyers are loyal to the brand as compared to those in subscription market. It is also imperative that Kit Kat considers the customers’ behavior in order to devise appropriate marketing strategies. This implies that both heavy and light buyers should be involved in the process of marketing. It is also critical that the brand’s marketing director notes that light buyers are more loyal to the brand than the heavy buyers. In terms of salience and awareness, the marketing director ought to know the difference between the brand salience and to top of mind awareness. Moreover, it is important to build brand salience through the employment of certain visual cues and elements that can give a brand a competitive advantage over its competitors. In demographics and segmentation, customer profile is compared among the competing brands. Therefore, Kit Kat has to enhance its marketing strategy in order to beat its competitors in the market. Brand performance In the brand performance metrics shown in the table, it is explicit that Kit Kat is closely competing with Mars Bar in all the categories. Mars Bar’s market share is higher than Kit Kat’s by 10%. In addition, Mars Bars is leading with a penetration of 72 % in relation to Kit Kat’s penetration rate of 50%. Another performance difference between Kit Kat and Mars Bar is in terms of category buying rate (CBR). While Kit Kat’s CBR is 6.0, Mars Bar’s is at 5.6. The share of category requirements in Mars Bar is higher than Kit Kat’s by 3%. In terms of the sole loyalty of the two brands, Mars Bar’s is higher than Kit Kat’s by 9%. Nevertheless, the two brands have an equal average purchase frequency of 2.2. On the other hand, Kit Kat brand has other competitors that include Snickers, Twix and Nestle Gold. Snickers brand has its market share slightly lower than Kit Kat’s by 3%, and penetration of 48% as compared to the Kit Kat’s 50%. In terms of the average purchases frequency, Snickers’ is lower than Kit Kat’s by 0.2. Surprisingly, Snickers has category buying rate of 7.2 as compared to Kit Kat’s 6.0. Kit Kat has a higher share of category requirements of 37% compared to Snickers’ 28%. Besides, Kit Kat has a higher sole 8% than Snickers’ 4%. In other categories, Kit Kat has higher figures except for the category buying rate that is higher than Kit Kat’s in most of the brands. With references with the performance metrics provided in the table 1, Kit Kat is not performing according to the expectations. This is because of its category buying rate is the lowest in relation to the other brands in the list. According to Wansink & Park (2000, pp. 61-72), it is noteworthy that a business pays attention to its customers’ behavior. In this case, Kit Kat’s buyers are light compared to other brands. Therefore, the marketing director should not worry about it because heavy buyers are always a threat to the brand. In fact, heavy buyers are just price conscious and deal prone, but they are disloyal to the brand (Wansink & Park 2000, pp. 61-72). It is imperative that the marketing director concentrates on the light buyers in order to achieve its objectives. From the analysis of the performance matrix, it is evident that Kit Kat brand is operating in a repertoire market. This is because of the clients have repeat purchase behavior that enables them to choose from a wide variety of brands (Ehrenberg, Uncles & Goodhardt 2004, pp. 1307-1310). This is shown by the unpredictable performance of the brand in all the categories. This implies that the brand’s customers do not stick to one brand for a long time; rather, they keep purchasing different available brands in the market. From Table 1, Kit Kat’s sole loyalty performance shows that it is 8%, compared to Twix’s, Snickers’ and Nestle Gold brands. This is a clear indication that its clients are loyal to the product because of many alternatives that are presented to them (Liu 2007, pp. 19-25). With reference to the above facts, there are differences between repertoire and subscription markets. To start with, Wansink and Park (2000, pp. 61-72) say repertoire market involves clients sticking to a single brand at the expense to others. On the other hand, subscription market entails customers sticking to one brand because of lack of alternatives. Secondly, repertoire market has consists of consumers that have product preferences as compared to those in subscription market whereby clients have brand preference caused by lack of choices to make. In most cases, consumers in subscription market purchase brands just because they are necessary. According to Sharp, Wright and Goodhardt (2002, pp.1-11), repertoire market has clients attaining product satisfaction rather than relationship satisfaction in a subscription market. Fourthly, in terms of loyalty, there is contract renewal or customer retention in subscription market, whereas repertoire market has clients’ loyalty. Stern and Hammond (2004, pp.5-9), differentiation rates in repertoire market are higher than those in subscription market. Brand prices are also contracted in subscription because it is price sensitivity. On contrast, repertoire market is price sensitive in that they are set or predetermined. While subscription market’s customer base is finite and static, repertoire market’s customer base is infinite and fluid. In addition, purchase decision in both markets vary in that subscription market’s covers many events, while in repertoire market, decision is needed in every other event. In brand marketing, Stern and Hammond (2004, pp.5-9) note that consideration of customer behavior is crucial determining an appropriate marketing strategy that meets their needs. In the case whereby the marketing director wants to concentrate on the heavy buyers at the expense of light buyers, it is advisable that he considers the latter more than the former. This is because, although heavy buyers purchase a lot of products at once, they are deal prone and disloyal to the brand (Sharp &Wright & Goodhardt 2002, pp.1-11). On the contrary, the business should consider both categories of buyers in its brand marketing strategy in order to achieve its objectives. In spite of their scanty purchases, light buyers have more loyalty to the product than heavy buyers (Birn 2004, pp. 95-101). This is because they tend to have repeat purchases of the brand than heavy purchasers who buy once in a while. Besides, light buyers are not deal prone and price conscious. Therefore, a business is guaranteed that such clients would be back tomorrow for the same brands. In relation to these facts, the marketing director should avoid too much focus on heavy buyers at the expense of the light ones. Awareness & Salience According to Hutt and Speh (2010, pp. 211-214), brand salience entails the extent to which a brand is noticed or thought about by consumers in a buying circumstance. This is determined by the strength and size of the brand. The stronger the brand is, the greater its brand salience, and vice visa. Explicitly, brand salience involves a brand’s memory and its connection to other significant memory structures (Birn 2004, pp. 95-101). On the other hand, to top of mind awareness refers to the brands that come to the clients’ minds when they are asked to remember brands within a certain category. In every business, it is critical to build brand salience because of certain reasons. Firstly, building brand salience is critical in that it promotes the brands’ performance in the market (Wansink & Park 2000, pp. 61-72). Moreover, it gives a brand a competitive advantage over other brands, hence increasing the sales volume. According to table 2, Mars Bar has a greater top of mind awareness of 41 than Kit Kat’s brand that has 19. In terms of the brand salience, Mars bar is the highest salience of 36 or a whole sample and 42 for the buyers. Kit Kat’s brand follows closely with 21 for the whole sample and 41 for the users. Snickers’ top of mind awareness is lower than Kit Kat’s by 1, and its salience as a whole sample is 18 and 35 for the users only. With reference to these results, it is clear that Kit Kat is not performing well within the whole sample and its customer base. Therefore, it is important to separately consider brand salience brand purchasers. This is because brand salience is determined by individual consumers, and not all of them. Besides, consumers can have different images of the brand but different brand salience (Birn 2004, pp. 95-101). Furthermore, Birn (2004, pp. 95-105) says that brand salience can be enhanced in various ways that include educating the users on the brand category. Upon understanding the functions of a brand, consumers can develop salience. Moreover, Sharp (2010, pp. 23-28) notes that businesses can improve their brand salience by employing visual cues that aid the clients’ memories of the brand. Additionally, brand salience can be built through improving elements, such as, symbol, logo, texture, and shape of the brand products. Marketers should also promote the quality of memory structures in the buyers in order to promote their brand salience (Mundt 2005, pp. 14-16). In the advertisement of a chocolate brand, various cues can be used, such as, color, shape, texture, name, logo, smell, sound, packaging, ingredients, and size. Demographics and Segmentation In table 3, there is no difference in the Kit Kat’s customer profile in relation to its competitors. This is because it has the same relationship status of the clients with the competitors; however, the difference lies on the numbers. Therefore, this similarity of customer profile implies that Kit Kat has to enhance its marketing in order to differentiate its brand from the competitors (Hax 2009, pp. 33-35). There is a need to do a lot of promotions on the brand salience and the top of mind awareness of its brand in order to outdo other brands in the market (Shajanhan 2004, pp. 44-45). Conclusion Evidently, Kit Kat brand is facing a stiff competition from other brands in the market. Furthermore, the company is operating in a repertoire market. Repertoire market involves repeat purchases made by clients as compared to subscription market where customers subscribe to the brand. In a repertoire market, customers have a lot of alternatives to choose from, whereas subscription market does not have such options. Besides, Kit Kat’s marketing director should consider both heavy and light buyers. He should know that light buyers are more loyal to the brand than the heavy ones. In addition, it is important for the business to build its brand salience in order to differentiate its brand from the competitors and grow sales. This can be done through employment of visual cues such as shape, color, smell, texture, name, logo, and size. References Birn, R 2004, Effective Use of Market Research: How to Drive and Focus Better Business Decisions, Kogan Page, London. Pp. 95-110. Ehrenberg, ASC, Uncles, MD & Goodhardt GJ 2004, ‘Understanding brand performance measures: Using Dirichlet benchmarks’, Journal of Business Research, vol. 57, no. 12, pp.1307-1325. http://www.mendeley.com/research/understanding-brand-performance-measures-using-dirichlet-benchmarks-1/ Hax, AC 2009, The Delta Model: Reinventing Your Business Strategy, Springer, New York. Pp. 33-35. Hutt, MD & Speh, TW 2010, Business marketing management: B2B, South-Western CengageLearning, Mason, OH. Pp. 211-214. Liu, Y 2007, The long-term impact of loyalty programs on consumer purchase behavior and Loyalty’, Journal of Marketing, vol. 71, no.4, pp. 19-35. http://www.mendeley.com/research/the-longterm-impact-of-loyalty-programs-on- consumer-purchase-behavior-and-loyalty/ Mundt, K 2005, Brand loyalty in subscription markets: is it possible to out-perform competitors, University of South Australia, Belmont. Pp. 14-16. Sharp, B &Wright, M & Goodhardt, G 2002, ‘Purchase Loyalty is polarised into either Repertoire or Subscription Patterns’, Australasian Marketing Journal, vol, 10, no.3, pp. 1-11. http://byronsharp.files.wordpress.com/2008/07/repsubscription.pdf Sharp, B 2010, How Brands Grow, Oxford University Press, South Melbourne. Pp. 23-28. Shajanhan, S 2004, Relationship marketing: text & cases, Tata McGraw-Hill, New Delhi. Pp. 44-45. Stern, P & Hammond, K 2004, ‘The relationship between consumer loyalty and purchase incidence’, Marketing Letters, vol, 15, no.1, pp. 5-19. http://www.jstor.org/pss/40216511 Wansink, B & Park, SB 2000, ‘Methods and measures that profile heavy users’, Journal of Advertising Research, vol. 40, no. 4, pp. 61-72. http://foodpsychology.cornell.edu/research/summary-heavy-users.html Read More