Marketing-Measuring and Interpreting Brand Performance - Buyer and Consumer Behaviour - Assignment Example

Buyer & Consumer Behaviour (SP5, 2013)] Assignment – Part A Executive summary Marketing is a very vital component of every business. This is because marketing places the products of a specific company into the limelight and enhances its visibility in the eyes of the clients. This essay shows how this concept has been applied in an effort or trying to analyze how a certain brand, Corn flakes fairs with other brands in the market. Various parameters and statistical inferences have been utilized here in a bid to place this brand in the context of the other brands in the market. These metric have been analyzed using three sections; Brand performance, Awareness and salience and demographics and segmentation. It will be found that each of these metrics affect the brand positioning and visibility in different ways. It will also be found that it is the absolute prerogative of the company to ensure that the brand is made fully visible. “Calculating & Interpreting Brand Performance Measures” Table 1: Brand Performance Measures Brand Market Share(%) Penetration(%) Average Purchase Frequency Category Buying Rate Share of Category Requirements (%) Sole Loyalty(%) Corn Flakes 37 73 2.3 5.4 43 22 Weetbix 24 50 2.2 5.9 37 8.6 Special K 19 44 2 7.0 29 3.2 Cheerios 14 40 1.6 7.1 23 none Just Right 5.3 21 1.1 8.5 13 none Average 20 46 1.8 6.8 29 6.8 Cheerios: Market Share= = (45/318)*100= 14 Penetration= = (28/70)*100= 40 Average Purchase Frequency= = 45/28=1.6 Category Buying Rate== 200/28=7.1 Share of Category Requirements== (1.6/7.1)*100=23 Sole Loyalty=(None) Special K: Market Share= = (62/318)*100= 19 Penetration= = (31/70)*100= 44 Average Purchase Frequency= = 62/31=2 Category Buying Rate==218/31=7.0 Share of Category Requirements== (2/7.0)*100=29 Sole Loyalty= = (1/31)*100=3.2 Corn Flakes: Market Share= = (117/318)*100= 37 Penetration= = (51/70)*100= 73 Average Purchase Frequency= = 117/51=2.3 Category Buying Rate==273/51=5.4 Share of Category Requirements== (2.3/5.4)*100=43 Sole Loyalty= = (11/51)*100= 22 Weetbix: Market Share= = (77/318)*100= 24 Penetration= = (35/70)*100= 50 Average Purchase Frequency= = 77/35=2.2 Category Buying Rate==208/35=5.9 Share of Category Requirements== (2.2/5.9)*100=37 Sole Loyalty= = (3/35)*100= 8.6 Just Right: Market Share= = (17/318)*100= 5.3 Penetration= = (15/70)*100= 21 Average Purchase Frequency= =17/15=1.1 Category Buying Rate==127/15=8.5 Share of Category Requirements== (1.1/8.5)*100=13 Sole Loyalty=(None) Corn Flakes have 37% of market share means Corn Flakes’ product sales take up 37% of all brand product sales. If there are 100 products from different brands, we can sale 37 products. Penetration is 73%. Means if we have 100 customers, there are 73 customers will choose Corn Flakes’ product. Average purchase frequency is 2.3 we can measure every buyer will buy 2-3 products for once. Category buying rate is 5.4. So there are 5-6 sales for each buyer once for all category of brand. Share of category requirements. Means customer buy different brand for once, have 43% chance to choose Corn Flakes. Sole loyalty is 22%. Means customer who will not buying other brand, if we have 100 customers, there are 22 customers will buy Corn Flakes’ product only, and not buy other brands. Assignment part B: Section 1- Brand performance Q1. Analysis of Corn Flakes Brand Market Share Penetration Average purchase frequency Category buying rate Share of category requirements Sole Loyalty Corn Flakes 37 73 2.3 5.4 43 24 From the calculations carried out in the first part of this the essay, an analysis of the product Corn Flakes will be conducted here using the following metrics: Market share, Market penetration, Average purchase frequency, Category buying rate, Share of category requirements as well as Sole loyalty. Market share Market Share= = (117/318)*100= 37 The market share of Corn Flakes in this market is 37%. This figure has been approached through taking the sales of the Cornflakes brand over sales of the product category multiplied by a hundred percent. The implication of this is that the Corn Flakes brand is not the dominant brand in the market. It could rank among the brands having the biggest market share but since the share is below 50%, then it is not dominant brand in the market. However, from the calculations in part A of this assignment, Corn Flakes commands the highest percentage of this market, meaning people prefer corn flakes to other brands in the market. Market share measures the strength of a certain brand in a certain market or industry (Peters & Waterman, 1982, p. 13; Ferrier, 1999, p. 372; Brewis et al 2007, p. 11). Market penetration Penetration= = (51/70)*100= 73 Market penetration shows how well a certain brand has been able to capture the attention of the shoppers and how visible this brand is in the market (Hall, 1987, p. 42; Elbanna, 2009, p.178). The corn flakes market is 73%. This is achieved through dividing the number of brand buyers by the number of shoppers in this market. This implies that the reception of the cornflakes brand has been beyond average. The visibility of the brand is also well above average. Verhoef (2003, p. 34) states that the market visibility increases the presence of the brand in the market. However, the percentage also shows that there is more potential for the brand. Average purchase frequency Average Purchase Frequency (APF) = = 117/51=2.3 APF shows the number of purchases done on a brand dividing the same with the number of brand buyers. For Corn flakes, a ratio of 2.3 indicates that each person buys the corn flakes brand 2.3 times over a certain period of time. APF marks the capacity of customers to come back to the market and purchase the brand again. This APF of corn flakes is the highest in this market meaning that a specified number of people buy more products of Corn flakes, as contrasted to other brands over a certain period of time in this market. It shows the number of repeated buying that customers do have in the market (Parvatiyar & Sheth, 2002, p.33; Kotler, 2000, p. 11). Category buying rate Category Buying Rate (CBR) ==273/51=5.4 CBR is attained through division of the buyers purchase of the category over the number of brand buyers. In the case, the ratio of 5.4 shows that out 273 brand buyers present in this category, 51 of them went for the Corn flakes product. This implies that they bought five times the cornflakes product compared to the other brands in the corn flakes category. Share of category requirements Share of Category Requirements (SCR) == (2.3/5.4)*100=43 SCR is attained through dividing APF over CBR. The SCR shows the percentage by which the brand commands a buying power from the client. In this case, the corn flakes SCR is 43%. The interpretation is that the cornflakes SCR’s 43% is the highest in this market. The product commands a higher buying power than other brands in the market. Sole loyalty Sole Loyalty= = (11/51)*100= 22 The sole loyalty of a brand metrics measure the extent to which people will remain loyal to the brand and do not purchase any other brand in the market (Dutton & Duncan, 1987, p. 115). In this market, the corn flakes sole loyalty percentage is 22%. The interpretation is that out of the total number of buyers present in this market, 22% of these buyers cannot buy any other brand apart from the corn flakes. The other percentage, 78% is subdivided among the other products in the same category of the corn flakes. The 22% of sole loyalty is the highest loyalty available in this particular market meaning that more people are loyal to the corn flakes brand than to any other brand. Q. 2. (a) Difference between a repertoire market and a subscription market. These are two patterns that show how the purchase loyalty is polarized. In the repertoire market, buyers are few solely as most of them allocate their category requirements across several of the brands in the market by using a steady and well defined manner (Sharp, Wright & Goodhardt, 2002, p.7; Zeithaml et al 2009, p.4). In contrast to this are subscription markets. These markets have many solely loyal buyers as most of them allocate their category requirements based on one brand. b) What differences would you expect to see in brand performance metrics between a subscription market and a repertoire market? The differences expected in brand performance metrics between the subscription and the repertoire market are given below. Metric Repertoire market Subscription market Market share Low market share of the brand as market share is dependent on number of people buying from this brand Higher market share as more people purchase a particular brand in the market increasing its market share Penetration Low market penetration High market penetration APF Low High CBR Low High CSR Low High Sole Loyalty Low as people look at the whole brand category to determine what they purchase High as people concentrate on the brand before envisioning the category the brand is in. (c) What type of market is Corn Flakes operating in? Explain your answer. Corn flakes is operating in a subscription market. From the above inferential statistics, it can be observed that despite the presence of quite a number of brands in this category, Corn flakes commands a certain degree of loyalty. This implies that most of the clients who go for the brand categorize this market from the perspective of the corn flakes brand. In other words, people measure up other brands in this market with reference to corn flakes making it the most popular brand in the market. If it was in a repertoire market, the loyalty of the brand would most certainly be almost none as clients would view the brand from the categorical perspective. Q. 3. Your Marketing Director has always focused marketing strategies more towards the brand’s top, heavy 20% of its customer base. The Marketing Director believes that heavy users are more important to the brand. Explain if this is a good strategy to take? Why / why not? Focusing the marketing strategies towards the brand’s top, heavy 20% customer base is idealistic and appropriate for this brand. This is because the brand is in a subscription market where the buyers are most loyal to a particular brand. The corn flakes brand enjoys a good 22% sole loyalty in this market. To enhance this and to ensure that the loyalty increases, it is important to concentrate the marketing strategies to this group of people because they are the one who bring more business through repeated buying. Section 2: Awareness & Salience Q. 4. Define brand salience and compare the concept with attitude. What is the advantage of measuring salience and not attitudes? Explain why it is so important to build brand salience. Brand salience shows the extent or the degree to which a particular brand is visible to customers when they walk into the shop (Wilson, et al 2008, p. 16). Romaniuk & Sharp (2004, p.1) states that this shows the quality as well as the quantity of the network of the memory of the clients of this product. Attitude is the first perception people have of a certain brand. They may not have necessarily seen the brand to be able to create a certain attitude towards the same. The reason why building up a brand salience is important because it builds a lasting impression of the brand in the minds of people and people have the capacity to remember the brand even quite sometime after they have left the shopping station. Q. 5. What patterns do you see in Table 2 relating to brand salience? Does Corn Flakes perform as expected within the whole sample and within its customer base? Brand Top of mind awareness Overall brand awareness Salience (Whole sample) Salience (Users only) Corn Flakes 38 82 37 42 From table 2, there are a number of patterns that relate to brand salience. These are the top of mind awareness, overall brand awareness and whole sample’s salience. Following the customer base and the analysis provided by the table 2, the cornflakes brand is performing as expected within the sample as well as within the customer base. The brand has an salience level of 37% of the whole population. The implication is that people take the corn flakes brand in their minds and memory more distinctively than the way they take other brands. The nearest competing brand is Just Right with 21%. However, when it comes to the salience within the customer base, the Just Right brand topples over the corn flakes brand and they both have a salience within consumers of 43% and 42% respectively. The implication is that customers of the Just Right brand have a more quality as well as quantity value of the brand as compared to the way clients of corn flakes view their own brand. Q.6. What are the implications of these salience results for Corn Flakes in terms of its marketing strategies? Discuss how brand salience can be built and enhanced. Name 10 cues that you would expect to be included into a Corn Flakes advertisement. The implications of these salience results for cornflakes is that the brand is not doing enough marketing to make the brand become wholly visible to its customers. Any brand can be made more visible through employment of better marketing strategies (Kozlinskis & Guseva, 2006, p.112; Boyatzis & Soler, 2012, p. 24). The company could employ a number of cues in their advertisement as the following sentences highlights. Catchy phrases such as “the best flakes ever!!” Using well designed packaging Differentiated taste Rich and luxury essence Modest pricing Availability is guaranteed. Quality is top class Age differentiation- products designed for different age groups Highly nutritional Catchy trademark Section 3: Demographics & Segmentation Q.7. Look at the data in Tables 3-5. Is the customer profile of Corn Flakes different to that of the competition? Why/ Why not? From the demographics- relationship status table provided in this paper, the customer profile of corn flakes is similar to that of the other products in the market. This is because most factors that measure this profile are almost the same. For instance, following a comparison of the demographics of the two competitors, Weebix and Special K, on the grounds of single, couple or divorced, the metrics are 17 and 16 for single, 68 and 65 for couples and 14 and 18 for divorced respectively. Corn flakes customer profile also ranges along these figures with 22 for single, 62 for couples and 14 for divorced. The other factors run along the income levels and the deviations in income levels are not very much deviated implying that the customers who shop for corn flakes could be the same. Q.8. What are the implications of your demographic and segmentation results for Corn Flakes in terms of its marketing strategies? Following the demographics statistics that this are presented here, a number of implications on the marketing strategies of Corn flakes limited are highlighted here. The company should concentrate their marketing to the people of medium age and who have an middle level income as these are the people more likely to have the capacity and the affordability factor of the corn flakes brand. 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