Analysis of Brand Performances, Introduction of the New Product in a Market - Assignment Example

Marketing Channels In a normal business operation field, promotion always has impact on sales volumes of products. Products sold under high promotion strategies especially in a competitive market shows higher volumes than those left to operate freely in the market. This has been the reason under price wars in most competitive market and the result is that the lower price setters take the market advantage above their competitors’. From this perspective the Mr. Bossy statement could be right. The data in the Appendix can be used to evaluate the Executive managers’ decision. To achieve this consideration will be put on the price against market share coverage. The expected outcome as per the executive managers’ comment is that those products having wider market share are supposed to show averagely low prices as a promotional strategy. Taking for example of Kellogg’s, it’s showed sales reduction as across the period as compared with the price before promotion. The worst of this could be seen in the April market where after price promotion the sales reduced from 12.998 to 5.125 (third market region 1). Across the regions, the sales of Kellogg’s are seen to substantially drop instead of increasing as expected from Mr. Boss’s view. Also in the region one market Brekky shows fluctuation on sales despite the price promotion which was expected to show some increase in sales. Taking an example of January to April market in the first region one, it could be seen that Private label, Lowan and Uncle Tobys were the least in the market share at 8 percent before promotion. After promotion, Uncle Tobys market share was 17 percent, Lowan market share remained at 8% while private level moved to 17%. Carman, which was at 10% share in the market showed a leap to 17% promotion, while Sanitarium moved from 11 to 14% in the market share. Kellogg’s and Nestle which shared the markets at 20 and 1t percent in the market a 14% and 17% result after promotion. Using the above study, the expectation was to have a general scaled sales increase across the products tentatively. However this is not the case in this where there is fluctuation on the trends with major shareholders going down after price promotions have been undertaken. However, going by the principle of data reduction, this is not seen to be the case. From appendix 1, reduction of product volumes to as well as combining them to achieve large volumes that will be cost effective seems to produce almost equal results. Averagely, the volumes as well as average prices remain constant. From the study, it can hence be deduced that the executive officers view on the influence of price promotion of the market share is inaccurate. For Brekky, the most profitable region is in region three. The rest of the regions Bekky operates seem smaller share in the market. Attempts through price promotion to reach maximum share in the market as well has seen the sales drastically reduces such as in region 2 an 1. Brekky maximum sales are hence experienced in the third region. Q2. Analysis of Brand Performances Brand performance measures the number of customers loyal to certain brand. (BBc formulae table 2011) where as rate of purchase is the average amount of commodities purchased by each individual buyer. The category purchase rate is 5.16. Kellogg’s have the highest purchase rate of 1.4. On the other hand Uncle Toby has the lowest purchasing rate. Market share is the percentage proportion of the product in the market in comparison with other products of the same brand. Among the brands Kellogg’s have the highest market share of 27% while Uncle Toby has the lowest market share of 6%. Frequency of purchase is the number of times and individual buyer purchases a certain brand in the market. Kellogg’s has the highest purchase frequency of 4.6 compared to the other brands while uncle Toby has the lowest frequency rate of 3.7 the product might not gained its popularity in the market. Penetration measure is the ability of the product to be accepted in the market when it is new or when different adjustments have been done on the product in either size or components. Kellogg’s has the highest penetration rate of 30% where as uncle Toby has the lowest penetration rate.8% Loyalty measures the amount of customers who are able and willing to purchase certain brand at a particular time. Share of category requirements is the amount apportioned to a certain brand basing on the purchases of the brand regardless of whether buyers buy the product or not. The share of category requirements is higher in Kellogg’s brand and lower in sanitarium brand. Double jeopardy occurs where there is brand switching and mainly when the small brands lose customers to large products. Customers may alsways prefer to but big brands as they are mostly associaed with high qaulity favourable prices and higher sartisfaction rate. Small brand customers might be less loyal to the brands like large brands. Where by people who consume large products remain loyas for long and their brand switching rate is very low, not unless the marketer chnages the product descriptions which could make the product not to satify the cunsumers’ needs fully. The graph shows that penetration rate gooes hand in hand with purchase frequency. Brands with low purchase frequency are also experiencing low penetrating rates as large brands have dorminated the market. From the brand perfomance measure there is a clear indication that kellogg’s has the highest penetration rate of 30%, purcahase rate of 1.4, purchase frequency of 4.6, share category requirements of 46% and market share of 27%. We can therefore conclude that as par jeopardy claim bigger products have increased brand layaolty and market share. Duplication of purchase is also seen among the brands as customers are never loyal to all brands and there is increased brand switching. This is eveidenced by the share category requirements where by bronduct like uncle toby ranked lowest in market share, penetration rate, frequency of purchase, purchase rate and the mode changed in share category requiremnets as it was second last with 33% while sanitarium had 29% Q3. Refers to an introduction of the new product in a market where by the product had no other cereal brand of the same type. Meaning that the brand was less competitive and brass expected it to strive through in the market. The projection indicates that in period ni1 the amount of the products which will be purchased will be a bit lower as the product will not have gained popular in the market. There will be an increased amount of new products purchased in period two and the product is estimated to continue increasing up to period four. Meaning that, the products will continue gaining popularity and increase in market share. Hybrid corn is estimated to increase tremendously in the given period. With amount of consumers anticipated to reach 1098 in period 4 from 195 in period 1. Motels will have the least growth and will have no gain to the business as few people are projected to purchase the products in motel. In period I it has 35 customers while in period 4 is projected of having only 85 consumers which is very low number and could lead to business failure. References Associates Ajjan 2010, conjoint analysis specialist, Litmus tests for conjoint analysis, viewed 03/05/2011,. “Calculating & Interpreting Brand Performance Measures”, Mark 1008, Buyer and Consumer Behavior’ University of South Australia 2010, viewed 1 May 2011 Lilien, G, Rangaswamy, A, De Bruyn A 2007, Principles of Marketing Engineering, Trafford Publishing SearchDataBackup.com 2010, date reduction, definition, viewed 30/04/2011, Sharp, Byron, Malcolm Wright, and Gerald Goodhardt (2002), Purchase loyalty is polarized into either repertoire or subscription patterns: Australian Marketing Journal, 10 (3), 7. Strata Research 2011, Conjoint Analysis, viewed on 03/05/2011, ‘Study Guide, Mark 1008, Buyer and Consumer Behavior’ University of South Australia 2010, viewed 1 May 2011 Ehrenberg S. (2001). Data Reduction: analysis and interpreting statistical data. Chichester: Wiley publisher Appendix 1a.   Region 1     before promotion After promotion. Kellogg's 0.21 0.14 Nestle' 0.18 0.15 Brekky 0.16 0.07 Carman's 0.10 0.15 Uncle Tobys 0.07 0.15 Sanitarium 0.11 0.13 Lowan 0.09 0.07 Private labels 0.09 0.14       Kellogg's 0.10 0.07 Nestle' 0.09 0.04 Brekky 0.08 0.07 Carman's 0.05 0.04 Uncle Tobys 0.03 0.09 Sanitarium 0.06 0.08 Lowan 0.05 0.04 Private labels 0.04 0.08 Appendix 1c.   REGION 3   Brand Market share before promotion. Market share after promotion. Kellogg's 0.21 0.14 Nestle' 0.18 0.08 Brekky 0.16 0.15 Carman's 0.10 0.15 Uncle Tobys 0.07 0.17 Sanitarium 0.11 0.07 Lowan 0.09 0.17 Private labels 0.09 0.07     Kellogg's 0.21 0.13 Nestle' 0.18 0.13 Brekky 0.16 0.13 Carman's 0.10 0.14 Uncle Tobys 0.07 0.07 Sanitarium 0.11 0.14 Lowan 0.09 0.14 Private labels 0.08 0.12 Appendix 2. Brands. Shoppers. Market share. Purchase rate. Penetration rate. Purchase frequency. Share of category requirements.   Kellogg's 8334 0.27 1.40 0.30 4.6 46%   Nestle' 6131 0.20 1.03 0.23 4.5 43%   Brekky 4512 0.15 0.76 0.19 4.1 38%   Carman's 3041 0.10 0.51 0.13 3.9 37%   Uncle Tobys 1699 0.06 0.29 0.08 3.7 33%   Sanitarium 2600 0.08 0.44 0.11 3.9 29%   Lowan 2320 0.08 0.39 0.09 4.1 36%   Private labels 2089 0.07 0.35 0.09 3.8 35%   total 30726   5.16         average 3840.75             Appendix 3. Product category p q n1 N2 n2 N3 n3 N4 n4 Cell phones 0.004 1.76 20 20 55 75 150 225 397 Color TV 0.005 0.84 25 25 46 71 83 154 150 Record players 0.025 0.65 125 125 201 326 315 641 472 Mc Donald's fast food 0.018 0.54 90 90 136 226 203 429 294 Air conditioners 0.010 0.42 50 50 70 120 98 218 136 Clothes dryers 0.017 0.36 85 85 114 199 150 349 196 Motels 0.007 0.36 35 35 47 82 64 146 85 Steam irons 0.029 0.33 145 145 187 332 238 570 295 Water softner 0.018 0.30 90 90 115 205 145 350 181 Hybrid corn 0.039 1.01 195 195 377 572 684 1256 1096                      5,000                 N(1) 0                 Read More