Measuring and Interpreting Brand Performance of Corn Flakes - Case Study Example

Measuring and Interpreting brand performance Executive summary The measurement and interpretation of brand performance is of paramount importance to any brand managers. This is because it helps them know how well the brand is performing in the market and hence undertake successful brand management. Brand performance measurement and interpretation involves a number of issues including measurement of brand awareness, brand salience, brand loyalty brand value perceptions, brand market share among other metrics. This paper is aimed at measuring and interpreting Corn Flakes brand performance in comparison to its competition. In this regard, three issues are observed including brand performance, awareness and salience as well as demographics and segmentation (Harold, 2002). The brand performance metrics analyzed include market share, penetration, average purchase frequency, category buying rate, and share of category requirements as well as sole loyalty. In this regard, Corn Flakes emerge as the best brand in terms of brand performance. The brand is also observed to be the most salient brand in the market. However, the brand does not show any significant differences in terms of its customer profile as far as demographics and segmentation is concerned. The paper also recommends for a market strategy that will not only focus on heavy customers but that which strives to ensure the company increases its penetration and market share and hence sales. as such, the light buyers are considered the most important in increasing the number of customers for the brand. Brand Performance Differences and patterns between competing brands The different brands have been observed to have different levels of market shares. Corn Flakes has the largest market share at 37 percent. This implies that Corn Flakes owns approximately 37% of the entire market. It is followed by Weetbix at 24 percent, special K at 19 percent and Cheerios at 14 percent in that order. Just right has the least market share at 5.3 percent. Corn Flakes has also achieved the highest market penetration levels at 73%. This implies that 73 out of every one hundred customers have bought/buy Corn Flakes. Weetbix has achieved the second highest market penetration at 50%. It is followed by Special K at 44% and Cheerios at 40%. Just right has achieved the smallest level of market penetration at 21%. Corn Flakes also has the highest average purchase frequency at 2.3 times. This implies that each of the 51 customers who bought Corn Flakes bought it for 2.3 times within the period under consideration (Uncles and Wright, 2004). It is closely followed by Weetbix at 2.2, special K at 2 and Cheerios at 1.6 while Just Right has the lowest average purchase frequency of 1.1. This implies that Corn Flakes is bought most frequently by customers. Corn Flakes has the lowest category buying rate at 5.4 implying that buyers buy from the category at least 5 times. On the other hand, Just Right has the highest category buying rate at 8.5 times. Corn Flakes has the highest share of category requirements at 43% implying it has the highest loyalty from customers as far as the shares of customer’s purchases devoted to the brand out of all purchases they made from the category during the period. On the other hand, Just Right had the lowest share of category requirements at 13%. Similarly, Corn Flakes had the highest Sole Royalty at 24 implying that 24% of its customers are totally loyal to the brand and do not purchase from any other brand. On the other hand, Cheerios and Just right have no Sole Loyalty. From the above results, it can be concluded that Corn Flakes is the most favorite brand in the market that also has the highest market share and penetration rate. Repertoire market and subscription market The difference between the two markets is explained through customer loyalty to brands. This is explained below; Repertoire market – In a repertoire market, customers have repertoires (a range of brands which they regularly shift between. For instance the market for consumer packaged products is a repertoire market (Sharp and Goodhardt, 2002). This implies that the typical brand in the market is bought by its average customers less than half the time implying that it has an average share of category requirements that is less than fifty percent while few of its customers are one hundred percent loyal. Subscription markets – In these markets, customers rarely have repertoires and hence all the brand royalty metrics are high. For instance, the brand enjoys high levels of share of category requirements of more than fifty percent while the brand has high levels of one hundred percent loyal buyers (Ehrenberg and Goodhardt, 2002). The banking industry is an example of a subscription market. The differences expected between a subscription market and a repertoire market brand performance metrics Repertoire market Subscription market The brands in the market have low levels of Share of category requirements which is less than fifty percent The brands in the market have high levels of Share of category requirements usually above fifty percent. The brand has low levels of sole loyalty implying only a few customers have a hundred percent loyalty to the brand. The brands in the market have high levels of sole loyalty meaning that a significant number of the brands buyers are a hundred percent loyal to the brands. Based on the above description, Corn Flakes operates in a repertoire market. This is because the brand has a share of category requirements of 43% which is less than fifty percent and only few of its customers are a hundred percent loyal to the brand. As such, Corn Flakes operates in a repertoire market where it is the best performing brand. Marketing strategy The marketing director has always focused marketing strategies more towards the brand’s top heavy 20% of its customer base. This is based on the believe that heavy users are more important to the brand. However, this is not a good marketing strategy. A good marketing strategy should ensure increased buyer loyalty since without loyalty; the brand will decline (Janet, 2007). However, the marketing manager’s strategy is only aimed at increasing loyalty to customers who are already loyal which is not possible. In other words, it is impossible for the company to have customers who are more/less loyal than other brands customers. Instead, the marketing manager should develop a strategy that will enable the company gain more customers that are loyal. In other words, the right marketing strategy should aim at expanding the 20%heavy to may be 30% or having much more loyal customers (30%) as opposed to having much more loyal customers (20%). If the company’s customer base is to grow, the strategy should be all inclusive. This implies that the director should aim at retaining the 20% heavy while still focusing on the light customers so that some of them may be converted into loyal customers. Since 80% are the light customers, winning a substantial percentage of them should be the company’s aim. Otherwise, the company’s sales may never improve by just focusing on the 20% heavy customers. Awareness and salience Brand salience is the inclination of a brand to be thought of or noticed by buyers in buying situations. It reflects the quality (freshness and relevance) and quantity (how many) of the network of memory structures that buyers hold about the brand. This implies that the more cues that the buyer can link the brand to, the more likely it is that the customer will link it to the cues he/she comes across during buying experience. On the other hand, brand attitude refers to the consumer’s opinion towards the brand or how they think about the brand, whether it satisfies their needs and how much they will demand of the brand (Romaniuk and Sharp, 2004). In other words, it is a lasting evaluation that acts as a mental reminder to the customer to act. It is more important to measure brand salience and hence build it than measuring brand salience. This is because established brand attitudes only have weak influence on consumer behavior in future as attitudes are not often recalled and whenever they are, they are weakly motivational for instance, when the attitude being remembered is weak, the likely reaction will be avoiding the brand. On the contrary, brand salience has a huge impact on a buyer’s personal brand choices and is largely responsible for differences in market shares among brands. While brand attitude is about evaluating brands (whether it’s good or bad), brand attitude is about the brand getting a chance of being remembered /noticed or retrieved in a buying situation. Brand attitudes are largely a function of brand salience in that people often like what they are familiar with. As such, a brand that is more salient is likely to be positively evaluated. Based on this, it is important to build brand salience with the aim of cultivating the right buyer attitude hence attracting more brand loyalty. This will lead to increased market share and hence more sales. Awareness and salience metrics Corn Flakes has the highest top of mind awareness at 38% compared to its competitors whose top of mind awareness range between 17 percent for Weetbix and 4.1% for Just Right. Corn Flakes overall brand awareness is the highest in the market at 82% compared to that of its competitors which range from 75% for Weetbix and 41% for Just Right. Corn Flakes salience (whole sample) is the highest at 37% compared to that of its competitors which range from 20% for Weetbix to 11% for Just Right. Corn Flakes has the second highest salience (users only) at 42% behind Just Right which is the highest in the category at 43%. From the results, it is evident that Corn Flakes is the most salient brand in the market (Kotler, 2000). However, it does not perform as expected within the whole sample and within its customer base. Marketing efforts are therefore required to raise the brand’s salience (users only). Implications of the salience results for Corn Flakes in terms of its marketing strategy Although the brand is the most salient brand in the market, much effort is still required to ensure that brand salience is improved especially within its customer base. The marketing strategy should therefore focus on building and enhancing brand salience (McDonald and Sharp, 2003). In order to build and enhance brand salience, the marketers should ensure that the brand includes a range of cues that can be used to think of the brand. Buyers are driven by mental cues which trigger their thoughts around brand consideration sets. Increasing the memory cues/structures that the brand is linked to leads to increased brand salience. In other words, increasing the quantity of cues associated with the brand is key to building and enhancing brand salience. Secondly, the quality of the cues is key to building and enhancing brand salience and hence the strength of the association and attribute relevance. The following are the cues I would expect to be included into a Corn Flakes advertisement i) Nutrition at its best ii) Sharpen your memory iii) Gives energy and vitality to keep you going iv) For excellent nutritional value v) For a delicious breakfast vi) Corn Flakes- Yummy vii) Tastes good viii) Gives you value for your money ix) Something to keep me energetic through out the day x) Tastes like no other Demographics and segmentation From the tables, it can be observed that the customer profile of Corn Flakes is largely similar to that of the competition. For instance, regarding relationship status, couples form the largest group of consumers followed by singles and the separated or divorced. However, Corn Flakes is least popular among couples when compared to its competitors. However, Corn Flakes customer profile seems to differ from that of its competitors when it comes to total house hold income. In this case, corn flakes seems to have significant demand across all the income groups (Daniel, 2008). However, even then, the profile compares well with that of its competitors where the greatest demand comes from those with more than $70,000 income. As far as the gender is concerned, Corn Flakes customer profile is similar to that of competition where the products are most popular among the female. In other words the customer profile for Corn Flakes is not different from that of its competitors. Implications of the demographic and segmentation results for Corn Flakes Corn Flakes has been observed to be most popular among couples, households with more than $70,000 income and among the female. On the other hand, an ideal marketing strategy for Corn Flakes should ensure that it retains its popularity among the above groups while trying to win more customers from the rest of the groups. As such, the above findings imply that the company should adopt a marketing strategy that will ensure that it gets popular among the other relationship groups, income status groups and among the male (Myron, 2000). There is need for the company to increase its marketing efforts among these groups if it is to increase its market share. More efforts should especially be concentrated on ensuring that people from all income groups and the male adopt the brand since this is where the greatest overall deviation is observed. By focusing on the light group’s the company will be sure to increase its market share. However, marketing efforts should also aim at retaining the heavy groups. References: Sharp, B&, Goodhardt, G2002, Purchase loyalty is polarized into other repertoire or subscription patterns, Australian Marketing Journal, vol.10, no.3, pp.7-20. Uncles, M&, Wright, M2004, Empirical Generalization in marketing, Australian Marketing Journal, vol.12, no.3, pp. 5-18. Romaniuk, J&, Sharp, B2004, Conceptualizing and measuring brand salience, University of South Australia, Australia. McDonald, E&, Sharp, B2003, Management perceptions of the importance of brand awareness as an indicator of advertising effectiveness, Marketing bulletin, vol. 14, pp. 2. Ehrenberg, A&, Goodhardt, G2002, Double Jeopardy Revisited, Again, Marketing Insights, Marketing Research, spring 2002, pp. 40-42. Janet, B2007, Customer driven marketing strategy, Oxford, Oxford University Press. Daniel, M2008, Principles of Marketing, London, Rutledge. Myron, L2000, Contemporary issues in marketing, Journal of marketing, vol.64, no.2, pp. 109-121. Kotler, P2000, Marketing Management, Upper Saddle River, Prentice Hall. Harold, F2002, Building Brand Community, Journal of Marketing, vol.9, no. 2, pp. 65-72. Read More