Consumer Behavior and Business Buyer Behavior - Term Paper Example

Marketing Analysis for Different Brands (Student Name) (Course No.) (Lecturer) (University) (Date) Abstract The report focused on the analysis of different competing brands: Smith’s, Thins, CC’s, and Doritos. Important areas covered by the report include brand performance, mental availability, and demographic and segmentation. Based on the brand performance, the report analysed various measures that reflect market share, penetration, average purchase frequency, share of category require, and sole loyalty for each of the brands. Moreover, a detailed analysis of the duplication of purchase law for each brand. Concerning mental availability, the report defined the concept of attitude and mental availability. To establish the significance of mental availability, the report analyzed the mental market share, mental penetration, and the network size for each brand. The report established the methods of building and improving mental availability, the appropriate marketing strategies of building mental availability, and categories entry points that Kettle brand needs to include in its advertisement. On demographics and segmentation, the report analyzed gender, and, and total household income of all the brands. Moreover, the report concluded with the analysis of the implication of demographic and segmentation strategy in Kettle. Marketing Analysis for Different Brands SECTION 1: Brand Performance 1. Analysis of the difference and patterns between the competing brands The market is becoming highly competitive that businesses are investing many resources to acquire their desired competitive advantage (Fitzgerald, 2004, 83). Concerning the market share, Kettle performs the poorest with Smith’s occupying the biggest share of the market standing at 37% against Kettle’s 4%. On the other hand, Thins, CC’s, and Doritos occupy 26%, 21%, and 12% of the market share. Organizational penetration and purchase frequency play important role in determining the market share of the business. Moreover, the product’s performance in the market depends on organizational strategies to manipulate the consumption behaviours of the consumers. Smith’s penetration stands at 72 while Kettle’s performs the poorest at 18, which also relates to its market share. Thins’, CC’s, and Doritos’ penetration stands at 49, 46, and 34 on average. On the average purchase frequency, Smith’s and Thins perform equally and the best among the competing brands with each having an average purchase frequency standing at 2.2. Kettle has the lowest average purchase frequency standing at 1.0. CC’s and Doritos have average purchase frequency of 1.5 and 1.9 respectively. However, concerning the category buying rate, Kettle registered the highest value at 8.9 while Smith’s registered the lowest value, 5.0. Consequently, Thins, CC’s, and Doritos registered category buying rate of 5.4, 6.6, and 6.9 respectively. On the share of category requirements, the trend remained similar with Smith’s registering the highest and Kettle the lowest at 43 and 11 respectively. Thins, CC’s, and Doritos had their share of category requirements standing 41, 30, and 22 respectively reflecting that much efforts required to attain the desired competitive advantage. However, with reference to the sole loyalty, Doritos and Kettle registered a zero performance with Smith’s registering the highest sole loyalty that stood at 20. Thins and CC’s had a sole loyalty of 7 and 4 reflecting the biggest gap with the market’s best performer, Smith’s. 2. Cereal’s Market Analysis Kettle’s major competitors are Smith’s Thins, CC’s, and Doritos. To achieve the desired market share, Kettle’s Marketing Director would have to develop marketing strategies with the ability of positively influencing the consumption patterns of the consumers. From the cereal market, it is clear that Smith’s is the dominant brand in the market. Smith’s enjoys the highest penetration and experienced purchase by the other competitors. The market structure is oligopoly considering the few firms within the market and the ability of Smith’s to influence the market (Etro, 2009, 105). Moreover, the brands purchase from one another in a bid to create their desired competitive advantage. The Duplication of Purchase Law could be described as the brands that share their customers; therefore, it appears that the brands share their customers in line with penetration of one another (Lam & Ozorio, 2013, 205). Moreover, Duplication of Purchase Law could as well mean that the consumer goods markets lack specific partitions that demand distinct or specific category or segment of the consumers. Most preceding results revealed that most markets for the directly substitutable brands are not usually partitioned since they point out no special grouping or clustering of the brands. About the Duplication of Purchase Law, the competitive brands that the customers buy would be similar aggregately from one particular brand to another. Therefore, expected duplication would identical across each column due to the partitioning factor not being considered. Within the cereal market, there are similar and different competitive brands purchased by more or less similar kinds of consumers. That is, there is not any adequate proof of the market partitioning that occur between competitive brands, at least within the consumer goods market. Nonetheless, two products might have customers sharing their demographic characteristics that the brands might still be in different sub-segments within similar category. However, due to failure to consider the partitioning factor, it expected that the brands have similar duplications down each of the columns, which could be deducted that the deviations between the expected and average duplications indicate that the market has some partitioning. For example, the average duplication for the largest brand, Smith’s, was 71% while the expected duplication for similar brand was 72% showing that the brand has a considerable deviation which might be customers’ loyalty towards a particular brand or other brands having better marketing strategies. Most research often finds that most markets for the substitutable brands are not segmented. In the wheat’s market, there are some proofs of sub-segments existing within the market, which could be predicted as frequently based on the functional feature. These factors might pull towards the ‘segmented’ following the consumers showing marked grouping with interest towards some selected features of the products which in turn demonstrates partition within the market place. The fact that the duplication of purchase is different, it is only factual when there is no consideration of the sub-segments and the duplications deviate due to sub-partitioning of the market structure. Section 2: Mental Availability 3. Attitude and mental availability Mental availability of the brand refers to the probability that the consumers would notice, recognize, and think of a product while in buying situations. The concept of mental availability depends on the quality and quantity of the memory structures that relates to the brand. Moreover, mental availability is not attitude and does not relate to what the consumers like on the brand. The availability of the brand tend to vary across the situations; therefore, higher mental availability means being easily noticed or though in several buying situations. It is important to note that some products do well in particular situations while other brands do well in most situations. If the brand were easier to access within the memory, especially in more buying situations for more consumers, then the brand would experience higher overall mental availability (East, Wright & Vanhuele, 2008, 125). Therefore, while building the mental availability, it is critical to focus more than merely reminding the consumers of the existence of the brand. Most brand perception tracking surveys could be adapted to assist in measuring mental availability. However, the biggest fault that exists in most tracking surveys is that most of them emphasize on the evaluation and contain several attributes that do not measure the memory rather than the attitude, which means measuring the past usage. Mental availability depends on cue and is based on the memories associated with the brand. Different cues often have different tendency of eliciting the brand. To measure salience, there is need to handle such cues (Sharp, 2012, 52). Single cue cannot give much information of the propensity of the brand. To test if the selected and numbers of cues are adequate for measuring mental availability, there is need to expect the distribution of survey responses that follows similar distribution of repeat buying of the brands such as match behaviour. This is because most marketers often expect mental availability to have similar structures as brand buying repertoires on individuals. It would be important to measure mental availability as it ensures building of brand’s relevant memory structures, which make it easier to notice, recognize, and recall. Branding assist in building mental availability since acts like a coat hanger on which the memories hang. 4. Interpretation of mental availability The mental market share refers to the brand’s percentage of category entry points within the brand exist. From the analysis, Kettle has the lowest mental share at 7%. Mental penetration is the percentage of the category of buyers linked to a particular brand at least one category of the entry point. Kettle has the lowest mental penetration, 22, which relates to its market share. Network size of the brand is the number of category entry points linked to a particular brand within the mind of those aware. Kettle has the lowest network size, 2.0. Smith enjoys the largest mental market share at 32% reflecting the number of entry points that it occupies. With more category entry points of the Smith’s brand, it is readily available for most market shares. Other brands such as Thins, CC’s, and Doritos had mental market shares of 27, 19, and 15 respectively indicating their performances within the highly competitive market. Mental penetration tends to measure the level of brand awareness through associative theories of the mind since it calculates the possibility of retrieval across the various potential pathways of retrieving the brand. Smith’s has the highest penetration, 82, which reflects the level of brand awareness. Thins also has a better mental penetration, 66, which also defines its market share. CC’s and Doritos have mental penetration of 48 and 38 respectively. Concerning the network size, Smith’s and Thins enjoy the highest value standing at 3.8 and 3.4 respectively. Such sizes offer wider network, which in turn creates more potential pathways for the retrieval of the brand. The network size of CC’s and Doritos are 2.7 and 2.5 respectively reflecting their simple pathways of retrieving the brand. 5. Building and enhancing mental availability Building mental availability involves a series of steps. The first step involves achievement of high reach through enhancing frequency of the product in the market. High reach ensure that consumers are in a position of accessing the brand that they desire. The second steps involves being noticed which requires brand managers to develop strategies that would ensure the potential clients notice the brand in question (Kannan, 2004, 1326). The third step is development of distinctive assets, which are non-brand name with the ability of evoking the brand in memory of potential consumers. To be a distinctive asset, the brand would have to be unique and prevalent. Developing a distinctive asset requires commitment and consistency of the marketers to guarantee recognition by the customers. The fourth step involves building a brand that would ensure familiarity and liking of the brand by consumers. Consumers often come across different brands; therefore, familiarity and liking of the brand would ensure increment in sales (Sibireva & Gartner, 2014, 79). The fifth step involves ensuring adequate interactions are in place that builds and refreshes the memory structures. To enhance mental availability, the marketers need to improve penetration of the market through acquiring the customers. Mass marketing is another strategy of improve mental availability. The category entry points for Kettle include sweet chips, salty chips, Salem chips, vinegar chips, popcorn, baked potato chips, buffalo blue, maple bacon, sriracha, and spicy Thai. Section 3: Demographic and Segmentation 6. Analysis of the Strategy Demographics on gender show significant differences between that of Kettle and the other competitors. Kettle registered the highest number of females and lowest in males among the competitors. The high number of females could have been due to segmentation marketing strategies that particularly focus on the females. Through market segmentation, business marketers are able to define their targets customers and align the marketing strategy that specifically touches on their needs (Romaniuk, Troillo, Romaniuk, & Jenni, 2011, 72). Smith’s has a wider market share, which makes it easier to reach its general market target. Tastes and preferences tend to differ with gender (Parsons & Maclaran, 2009, 112). Kettle might have designed its products and services specifically to meet the specific needs of its female customers. However, the lowest number of males could have been to poor strategies that influence negative the purchase behaviours of the consumers. Concerning the age, Kettle’s major targets lies within the 36-45 years age where it registered the highest number of customers. The highest competitor, Smith’s, has its major target between 26 and 35 years of age reflecting it current position in the market share. However, for Thins, it target market are between 46 and 55 which reflect its low level at which occupies the market. Concerning the market target through the total household income, Kettle registered the highest potential customers among those earning more than $70,000. 7. Implication of demographic and segmentation To some extent, demographic and segmentation strategy lead to increment and definition of the market (Pooler, 2002, 112). Through focusing on the gender, Kettle managed to experience the highest number of sales among the female customers. Although Kettle registered the lowest sales among the male customers, the strategy assisted the marketing manager to determine the area in which the organizational marketing strategies need to focus on. Segmentation strategy is critical in ensuring that most marketing activities focus on areas in which the products perform poorly. Through focusing on demographic factors, the age, Kettle managed to establish that most of its customers lie between the ages of 36 and 45. The strategy also assisted to ensure that the marketing strategy in place focus on the areas that Kettle’s products and services experience poor sales in the market. Through segmenting the market based on the total household income, the results clearly defined the ranges in incomes where Kettle products need to target. Moreover, it is clear that the products need to targets potential customers earning from less than $50,000 to above $70,000. References East, R., Wright, M., & Vanhuele, M. 2008. Consumer behaviour: Applications in marketing. Los Angeles: Sage Publications. Etro, F. 2009. Endogenous market structures and the macroeconomy. Berlin: Springer-Verlag. Fitzgerald, R. 2004. Building fire performance analysis. Chichester: Wiley. Kannan, P. 2004. Commentary on “Understanding Brand Performance Measures: Using Dirichlet Benchmarks”. Journal of Business Research, 57(12), 1326-1328. Lam, D., & Ozorio, B. 2013. Duplication of Purchase Law in the gaming entertainment industry—A transnational investigation. International Journal of Hospitality Management, 33(5), 203-207. Parsons, E., & Maclaran, P. 2009. Contemporary issues in marketing and consumer behaviour. Amsterdam: Elsevier/Butterworth-Heinemann. Pooler, J. A. 2002. Demographic targeting: The essential role of population groups in retail marketing. Aldershot, Hampshire: Ashgate. Romaniuk, J., Troillo, G., Romaniuk, J., & Jenni, N. 2011. How do brands compete for consideration? A duplication analysis approach. European Marketing Academy, Bocconi Unversity. Sharp, B. 2012. Chapter 2: Consumer Behaviour and Business Buyer Behaviour. In Marketing: Theory, evidence, practice. South Melbourne, Vic: Oxford University Press. Sibireva, E., & Gartner, W. C. 2014. Customer-based brand equity model (CBBE) for measurement of MICE destinations brand performance: Master thesis. Ljubljana: E. Sibireva. Read More