Buyer, Consumer Behavior, and Brand Performance - Assignment Example

Buyer and Consumer Behaviour Assignment – Part A Calculating and 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 (%) Cheerios 14 40 1.6 7.1 23 0 Special K 20 44 2.0 7.0 28 3.2 Corn Flakes 37 73 2.3 5.4 43 24 Weetbix 24 50 2.2 5.9 37 9 Just Right 5 21 1.1 8.5 13 0 Average 20 46 1.8 6.8 29 7.2 For the Brand Corn Flakes Market share (%) = (Sales of Corn Flakes/ Total sales of the product category) *100 = (117/318)*100 =37 It indicates Corn Flakes’ brand size is 37%; it is the proportion of total sales of this brand. Penetration (%) = (Number of brand buyers/ Total number of customers) * 100 = (51/70) * 100 = 73 It indicates that for 70 customers, 51 of those people had purchased Corn Flakes at least once; the penetration of Corn Flakes is the proportion of these 70 customers, who had purchased Corn Flakes at least once, which is 73%. Average Purchase Frequency = Number of purchases of the brand / Number of brand buyers =117/51 =2.3 This is a measure of the average number of purchases made by a brand’s buyer. For Corn Flakes, there are 51 buyers who bought Corn Flakes, the total number of purchases of Corn Flakes is 117, therefore APF is 117/51=2.3 Category Buying Rate= Number of purchases from the category, made by brand buyers/ Number of buyers = 273/51 =5.4 It indicates that there are 51 customers who bought Corn Flakes, but these customers may or may not have bought other brands, the total number of purchase form the category is 273, therefore, the average of purchase from the category held by Corn Flakes buyers is 273/51= 5.4. Share of Category Requirements (%) = (Average purchase Frequency / category buying rate)*100 = (117/51)/(273/51) = 43 It shows loyalty in terms of the share of customers’ purchases they made from the category in the time period. 43% of customers’ purchases they made from the category are Corn flakes. Sole Loyalty (%) =Number of brand buyers who did not purchase any other brand/ number of brand buyers =12/51 =24 In this case, there are 12 customers only who bought Corn flakes in the time period, number of brand buyers is 51, Sole loyalty is the proportion of Corn flakes’ buyers that only buy that one brand which is 24%. Аssignmеnt Раrt B Executive Summary Brand Performance Table 1 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 Weetbix 24 50 2.2 5.9 37 8.6 Special K 19 44 2.0 7.0 28 3.2 Cheerios 14 40 1.6 7.1 23 0 Just Right 5.3 21 1.1 8.5 13 0 Average 100 46 1.8 6.8 29 7.1 1. The differences and patterns between the competing brands, and specifically for Corn Flakes According to the table, the Corn Flakes seemingly has got a good brand performance, as compared to the other brands, including Weetbix, Special K, Cheerios, as well as Just Right. This is in respect to market share, market penetration, purchase frequency, buying rate, share of category requirement as well as sole loyalty. In specific, the Corn Flakes brand has got the highest performance in respect to market share, market penetration, average purchase frequency, share of category requirement and sole loyalty. The brand has been overtaken by the category buying rate by all the other brands - Weetbix, Special K, Cheerios, and Just Right. The Corn Flakes brand has a strong brand reputation, image and performance, which give it a good market performance and act as a competitive advantage. 2. Repertoire Market and Subscription Market A repertoire market is where customers purchase multiple offers in a product category in a consistent manner. In addition, rather than sticking to one particular brand, consumers consistently buy repertoire items. A subscription market is a market in which customers are required to pay subscription prices in order to have access to a product or service (Wright, Sharp and Goodhardt 2002, p. 19). This market model was pioneered by newspapers and magazines, but it is now being practiced in other business fields. In addition, as opposed to selling products and services individually, the subscription market sells periodic access or use of a product or service such as seasonal, yearly or monthly. In this market onetime sales of a product or service can significantly become a recurring sale and can build brand loyalty. The subscription model of marketing can be used for any product or service, whereby, the user can be tracked in both unsubscribed and subscribed status. In regard to brand performance metrics, the subscription market is potential of building a strong brand reputation, image and performance towards a particular product as compared to the repertoire market. This is due to onetime sales of a product, or service category can significantly become a recurring sale, a notion that can increasingly build the brand loyalty and performance of that product. Contrastingly, the repertoire market is less capable of building a brand owing to the fact that rather than sticking to one brand, consumers consistently buy multiple offers in a product category. In essence, the Corn Flakes brand is operating in a repertoire market. This is because of the fact that customers usually buy multiple offers of the product categories, including the other brands that compete with it such as Weetbix, Special K, Cheerios, and Just Right. 3. Marketing Strategies towards Heavy Users of a Product It is highly essential for the marketing managers to always focus their marketing strategies towards the brand’s top, especially heavy 20% that normally forms the customer base. This is the customer group that is loyal to a product brand (Cant 2006, p. 261). The Marketing Director should consistently focus their marketing strategies towards this loyal group. The loyal customers are less likely to shift to the competitors even when the company goes through some delicate situation due to market environment dynamics. They are usually attributed to being part of the product brand and advocates to the company, thereby, spreading positive word of mouth to the target market (Kotler and Keller 2012, p. 159). Most of the marketing strategies should always be aligned towards the heavy 20% of a product’s customer base as they are more or less the permanent customers to the product brand. In addition, the Marketing Director should also believe that heavy users are more important to the brand for they are the key determinant of the product life in the long run. Thus, this is a suitable marketing strategy a product brand can ever have. Awareness and Salience 4. Brand Salience and the Concept of Attitude Brand salient refers to the degree in which a brand is noticed and thought about when a customer is in a purchasing situation. It refers to the memory of a brand as well as its linkage to other essential memory structures within a purchasing situation (Romaniuk and Sharp 2004, p. 339). Brand salience is very different from the concept of attitude as attitude is just a mere expression of like or dislike towards a product, person or place. Worth noting, attitude can be derived from an individual’s past or present. Attitude is somewhat similar to brand salience in the notion that it is changeable and measurable and capable of influencing the consumers’ behaviour and purchase action (Percy & Rossiter, 1999: 271). It is highly advantageous for marketing managers to measure brand salience, as opposed to attitudes. This is because of the fact that it significantly measure the top of mind brand, or rather the product brand that is mentioned first by a customer, when a product category is utilized to cue retrieval from the memory (Kotler and Keller 2012, p. 92). Brand salient reflects the quality and quantity of the memory structures network that customers hold about a brand while brand salient entails the top of mind awareness in respect to a product brand, attitude only regard to the general and lasting negative, neutral, or positive evaluation of a product by a customer (Sengupta 2005, p. 175). It is highly essential for a marketing director to look forward on building brand salience as it creates a product’s top of mind awareness. Brand salient also forms the basis of enhancing a brand’s equity, strength and reputation (Alba and Chattopadhyay 1996, P. 367). 5. The patterns illustrated in Table 2 relating to brand salience Table two has specifically outlined the measurement of brand salient of Corn Flakes, Weetbix, Special K, Cheerios and Just Right, in respect to top of mind awareness, overall brand awareness and salience. Among all the brand categories, the overall brand awareness is higher as compared to the top of mind awareness. Also, the Corn Flakes brand has got the highest top of mind awareness score followed by Weetbix, Special K, Cheerios, and Just Right in that order. This significantly show that Corn Flakes perform as expected within the whole sample and within its customer base. More salient building strategies require being consistently developed in order to strengthen this score for the other competing brands are increasingly approaching to surpass Corn Flakes brand (Murphy 1999, p. 473). 6. The Implications of these Salience Results for Corn Flakes in Terms of its Marketing Strategies As indicated above, the marketing manager of the Corn Flakes brand should increasingly develop more salient building strategies in order to strengthen this result. This is because of the fact that the other competing brands are increasingly approaching to surpass Corn Flakes brand. The brand should increasingly take opportunity of its core brand strength that it has already built. There are two paramount ways of building and enhancing brand salience. The first one regards ensuring the brand significantly meet the consumer’s real time needs (Knapp 2000, p. 238). The other one entails developing and executing an integrated marketing communication, which would include advertisement, sales promotion, personal selling, public relations, word of mouth and web presence (Hu et al 2010, p. 102). There are 10 essential cues that I would expect to be included into a Corn Flakes advertisement in order to ultimately enhance its brand salient. They include the brand’s outstanding quality, sweet flavour, sizeable, healthy nutritional ingredients, well packaged, constantly available, different varieties, mouth watering, fresh, and softness (Elliott and Percy 2007, 416; Van Pieters and Wedel 2008). Demographics and Segmentation 7. The Data Analysis of Tables 3-5 Having a close look at the Tables 3-5, one can significantly see that there is a conspicuous in regard to the customer profile of Corn Flakes as compared to that of the competition. In specific, Table 3 shows that the brand has got a good relationship status among the single and divorced or separated. The brand has low relationship status amongst the couple demographics. In Table 4, the Corn Flakes brand has a high relationship status amongst the household that earn within the range of below $70,000. For the households that have an income of more than $70,000, Corn Flakes brand relationship status is significantly low as compared to that of competitors. In regard to gender demographics, in Table 5, the Corn Flakes brand has a higher brand performance amongst female as compared to male. Although its brand performance amongst female is higher, it has the lowest brand performance within the female gender category as compared to the competitors’ brands. In general, the brand performance of the Corn Flakes brand is relatively good, but it needs to enhance some more effective branding strategies. 8. The Implications of the Demographic and Segmentation Results for Corn Flakes in Terms of its Marketing Strategies Indeed, demographics and segmentation are highly significant on the marketing strategies of the Corn Flakes. Prior to designing or developing a market strategy, the marketing director of Corn Flakes should significantly take into consideration demographics and segmentation factors. This highly helps in unravelling the real time needs attributed to the specific market segments. Because of the nature of the Corn Flakes brand, the market segmentation should be done on the basis of demographics. To be specific, the demographics should entail gender, household income as well as marital status. The marketing director should design marketing strategies that are aligned to the specific needs of each market segment (Cant 2006, p. 318). List of References Alba, J.Wand Chattopadhyay, A 1996, Salience Effects in Brand Recall, Journal of Marketing Research, vol. 23, no. 4, p.363-369. Cant, M. C 2006, Marketing Management, South Africa, Juta, Cape Town. Elliott, R and Percy, L 2007, Strategic Brand Management, Oxford Univ. Press, Oxford. Hu, T.-L 2010, An Integrated Relationship on Brand Strategy, Brand Equity, Customer Trust and Brand Performance - an Empirical Investigation of the Health Food Industry, International Journal of Organizational Innovation vol. 2, no. 3, p.89-106. Knapp, D. E 2000, The Brand Mindset Five Essential Strategies for Building Brand Advantage Throughout Your Company, McGraw-Hill, London.  Kotler, P and Keller, K. L 2012, Marketing management, Harlow, Pearson Education. Murphy, J. M. (1999). Brand strategy, Prentice Hall, New York. Percy, L and Rossiter, J.R 1999, A model of brand awareness and brand attitude advertising strategies, Psychology and Marketing, vol. 9, no. 4, p.263-274.  Romaniuk, J and Sharp, B 2004, Conceptualizing and measuring brand salience, Marketing Theory, vol. 4, no. 4), p.327-342. Sengupta, S 2005, Brand positioning: strategies for competitive advantage, McGraw-Hill, New Delhi. Van der Lans, R, Pieters, R and Wedel, M 2008, Competitive Brand Salience, Marketing Science, vol. 27, no. 5, p.922-931. Wright, M, Sharp, B and Goodhardt, G 2002, Purchase Loyalty is Polarised into either Repertoire or Subscription Patterns, Australasian Marketing Journal (AMJ), vol. 10, no. 3, p.7-20. Read More