Strategic Market Management And Global Perspectives - Case Study Example

Measuring & Interpreting Brand Performance Name Course Professor’s Name University Name City, State Date of Submission Executive Summary The report is prepared to advise the Marketing Manager in Nando’s on how to measure the brand performance. It will provide suggestions on how to deal with different measures of brand performance of the company and how the results have been interpreted. The first part is about brand performance that involves analysis of a table 1 ,the strategy that marketing manager of Nando’s should use to double its market share, and analysis of table 2.According to table 1, Nando’s has the smallest market share in the industry compared to all the other brands and McDonalds is the largest. The report also suggests that the company should utilize marketing strategies that increase penetration rate instead of loyalty. It is the best way to increase its market share in the fast-food industry. Table 2 shows that McDonalds and KFC are the main competitors of Nando’s. The Duplication Purchase law has also been defined and its importance on marketing strategies highlighted. The second part analyses awareness and salience of brands. The essay compares the importance of brand attitude and brand salience. The table 3 is evaluated on how the different companies have varying different salience. Moreover, the relationship between brand salience and the marketing policies that the company should use are highlighted. Brand salience can be enhanced by using a wide variety of cues like the ones given for Nando’s. Finally, the last section concludes by evaluating segmentation of the players in the fast-food industry. Nando’s customer profile is similar to the one for the competitors according to the tables. Therefore, it should use marketing strategies that the competitors are using to reach more customers. 1.0 Brand Performance 1.1 Analysis of the table The brand performance of a company can be measured by getting its category-buying rate, penetration into the market, the proportion of market share, average purchase frequency of buyers, and sole loyalty. Table 1 shows the results of five brands in the fast-food industry after measuring their brand performance. According to the table, McDonalds is the leading brand in the industry. All the performance measures of this brand except Category Buying Rate are higher than that of the other companies. It has penetration of 75, average purchase frequency of 2.4, category buying rate of 5.4, the share of category requirements of 43, the sole loyalty of 24 and a market share of 38%. It is evident from the table that Hungry Jacks and Subways have stiff competition between them. All the brand performance measures results of the two companies are almost the same.KFC is also competing with Subways and Hungry Jacks as shown by its results of the performance measures. There is a pattern that the brand with a high sole loyalty, penetration rate, and share of category requirements has a large market share. For instance, McDonalds has the highest values of those measures and thus the largest market share in the industry. Nevertheless, there is a difference in the pattern because MacDonald’s has the lowest category-buying rate yet has the biggest market share. Nando’s has the smallest market share due to its low penetration rate, zero sole loyalty and the lowest share of category requirements among the players in the industry. Its penetration rate is below the average rate for the industry, the same with the average purchase frequency, sole loyalty and the Share of Category Requirements (SCR). However, its pattern shows a deviation where Nando’s has the highest category-buying rate compared to all the other enterprises. 1.2 Marketing strategy to double market share Increasing Nando’s average purchase frequency to achieve higher customer loyalty will not be the best strategy to increase the brand’s market share. The Marketing Director should aim to increase the penetration rate of the company instead. Most of the times, the market share of a particular brand increases due to increased penetration but not loyalty[Mee08]. Increased penetration of a brand in the market increases the consumer base of that product. On the other hand, increased loyalty leads to expansion of average purchase frequency. The existing consumers buy the brand more often, but they do not increase in number. Penetration will increase the number of light buyers, customers who may not buy so often. A large number of light buyers will increase the market share more than a few loyal customers[Hil09]. For instance from the results in Table 1, McDonalds and KFC have almost equal Average Purchase Frequency (2.4 and 2.3).Consequently, there is a considerable variance in the proportion of their market shares since the penetration rates vary considerably. (75 and 47). Expansion of the market share will improbably result from marketing strategies, which concentrate on boosting the purchasing frequency of the heavy or existing consumers. Market share increase is mostly from the rise of light consumers who are often regarded as non-customers[Cos08]. The marketing strategies utilized by Nando’s should center on changing these non-buyers into customers. 1.3 Analysis of table 2 Nando’s main competitors are McDonalds and KFC because most of its buyers also consumed the two brands at a high percentage. There is medium competition between Nando’s and Hungry Jacks and weak competition with Subway. Moreover, competition in the fast-food industry is more intense between McDonalds and all the other brands. According to the table, many consumers who purchase the other four brands also buy heavily from McDonalds. Most of the KFC buyers purchase from Subway and Hungry Jacks, as well as Hungry Jacks buyers also purchase considerably from Subway. Duplication of purchase law declares that an unsegmented business sector the rate of purchasers of one brand who likewise buy another brand changes in a steady ratio with the entrance of this other brand[Wri14]. Deviations from the law may occur if there is systematic segmentation of various brands. Bunches, which do happen now and again, would ordinarily be for small groupings of brands by item definition, price or availability of the dealer. Deviations can also be caused by varying needs and wants o f a buyer. This deviation is specifically as apportioning that happened when a few brands offer clients to a more prominent or lesser degree than what might be normal, according to the market allocation of the brands. The reason the separation is produced is a result of the significant contrasts or resemblance between brands. Accordingly, as the exact proof expresses that this partition could expand the information and comprehension over the business structure in clients' perspective[CSC13]. This is particularly in connection to cost as an inner factor, which leads to an elevated expected duplication. The impact of duplication of purchase law is essential to marketing managers in any company. The reason is that the cost of an individual brand is the significant influence on a buyer who is in a buying situation. In most cases, brands compete with other brands in the same price range. Other purchasers may buy a certain brand of a slightly different cost due to a certain occasion[Pal06]. Therefore, a marketing manager should set price considering the market structure in terms of lifestyle, needs and income of the consumer. 2.0 Awareness and Salience 2.1 Brand Resilience The term brand resilience is used to refer to the how a brand remains prominent in a buyer’s memory[Hut]. In a human recollection point of view, prominence is categorized in two forms. Current prominence is the first form that means that a particular brand of a product is in operational memory. The other one refers to a situation where the brand can be recovered from the lasting memory in the end. Marketers of various products are usually interested in brand resilience in the long-term memory. It is one of the elements of brand equity, being the impact of elevating inclination thought in purchasing circumstances[Cli09]. On the other hand, brand attitude is that enduring evaluation that can go about as a mental suggestion to act[Fra08]. Brand attitude has a weak impact on future conduct since they are not remembered regularly, and when they will be, they are just inadequately motivational. The effect an attitude has on a purchaser’s conduct relies on upon the attitude, which is being recalled. It also depends on how the buyer’s attitude is inspiringly strong. We do not have attitudes to guide our conduct, and ordinarily all of the alternatives are successfully similarly preferred or disliked. Attitude has very little influence on the behaviour of a consumer particularly on choosing a certain brand. However, varying salience influences how buyers prefer certain brands and thus describes why brands have a different market share. Salience is about thinking of a brand while attitude analyzes a certain brand[Hoy08]. Measuring of brand salience is advantageous since it enables a company to know why consumers buy certain brands and not others. The measurement will assist such a business in choosing the best advertising policy[Ros11]. Such advertisements should ensure the buyers are aware of the name of the brand instead of just passing a convincing message. Business organizations should aim to build salience to have a great market share. Brand salience has a considerable influence on the consumer’s choice of a particular brand[Fra15]. Therefore, if such an enterprise has customers that have strong brand salience, it will be assured of big market share, as the customers will prefer its products. 2.2 Patterns of brand salience in Table 3 According to the table, the top of mind awareness is not directly proportional to the awareness of the whole brand. For instance, McDonalds Top of Mind awareness is 41, and the overall brand is 89.For this case, the two are almost proportional since the top of mind is about double that of the overall brand awareness. However, the results for KFC, Nando’s, Subway and hungry Jacks are not interrelated for the two forms of consciousness. Further, the results of the top of mind awareness are proportional to those in the whole sample resilience. The two types are almost the same for all the brands in the table. It is evident from the table that a brand can be on top of mind of a buyer but have low salience. For example, Hungry Jacks and Subways have higher top of mind awareness than Nando’s but Nando’s have greater salience for actual buyers than the two. Moreover, KFC’s top of mind results are triple that of Nando’s but they have the same resilience amongst their users. Nando’s as a brand does not perform the way it is expected in the results provided in the table in the salience of the whole sample and salience of the buyers. This is because according to the results, all the other brands customer base resilience is approximately double of the whole sample salience. 2.3 Implications of salience results on Nando’s marketing strategies Nando’s have a very low top of mind awareness and whole sample salience compared to the other brands in the same industry. The best marketing policy for the company is to concentrate on connecting a wide variety of cues to its brand instead of only a single cue. The more the variety of cues the higher the probability of the customer to buy the brand while in a purchasing situation[Wel14]. 2.4 Enhancing brand salience Three vital things are considered when measuring brand salience. The first is that the brand ought to incorporate a scope of cues that can be utilized to consider brands[Zim13]. It also ought to gauge recovery about their rivals not just as an autonomous brand independently. The brand ought to concentrate on recovery not simply on the assessments of a brand. In this way, the brand could concentrate on distinguishing and passing on distinctive cues for the particular brand as well as build the amount and nature of operational memory structures. 2.5 Cues to include in Nando’s advertisement The following is a list of cues that the company can incorporate in its advertisements: • Tasty food • Speed of service • A clean environment • Affordable prices • Nutritious menu • Ample parking at their outlets • A wide variety of foods • Fresh foods • Convenient outlets • High-quality foods 3. 0 Demographics and Segmentation 3.1 Nando’s Customer Profile In Relation To Competition Nando’s customer profile is similar to that of its competitors as shown by Tables 4-6.According to Table 4, the figures of the relationship status in this company falls in the same range with the one for competitors. An illustration is similar values for couples with Hungry Jacks and Average MAD with KFC. Besides, the numbers are close to the industry average numbers. The total household income for Nando’s is also close to the competitors’ with only a slight difference. Finally, the demographics according to the gender of the consumers are correlates with the rivals and the competitors. For example, the gender composition of Nando’s is exactly similar to that of Hungry Jacks. 3.2 Implications of Demographic Results on Company’s Marketing Strategies According to the results of Nando’s about the similarity of its consumers’ profile with the competition, the company should adopt marketing strategies that are almost similar to the other companies. The sub-groups have same characteristics for all the players in the industry so similar promotion tools but with a unique appeal should be executed. It is easier for the company to develop a marketing strategy for each sub-group in the market segmentation[Aak09]. Such strategies would be efficient in increasing sales through increasing the penetration rate of the brand. For instance, Nando’s can set slightly higher prices for the households that have more than $70,000 income. Affluent families will not mind the increase in price as they can afford. Households that earn less than $50,000 will be very sensitive to any upward changes in prices of Nando’s products. Since each segment is different from the other, mass marketing is not recommended for reaching more customers or promoting the brand[Gly09]. References Mee08: , (Meek, et al., 2008, p. 29), Hil09: , (Hill & Jones, 2009, p. 23), Cos08: , (Arkolakis, 2008, p. 43), Wri14: , (Wrigley, 2014, p. 79), CSC13: , (CSCMP & Frankel, 2013, p. 90), Pal06: , (Paley, 2006, p. 114), Hut: , (Hutt & Speh, 2012, p. 87), Cli09: , (Clifton, 2009, p. 34), Fra08: , (Franzen & Moriarty, 2008, p. 34), Hoy08: , (Hoyer & MacInnis, 2008, p. 65), Ros11: , (Rosenbaum-Elliott, et al., 2011, p. 53), Fra15: , (Franzen & Moriarty, 2015, p. 31), Wel14: , (Wells, 2014, p. 74), Zim13: , (Zimmerman & Blythe, 2013, p. 120), Aak09: , (Aaker & McLoughlin, 2009, p. 44), Gly09: , (Glynn & Woodside, 2009, p. 71), Read More