Market Penetration of the Brands - Millys Cheeses, Little Barrel, Cow Creed, Udder Fun, Geraldines, and Red Dog - Assignment Example

MARKETING INFORMATION AND ANALYSIS By (Name) Institution Instructor Class/Course City Date Market analysis involves collecting data on the market trends of some of the important market variables and thereafter analyzing them to make important conclusions which are relevant for a firm’s strategic options (Bruggen & Wierenga, p26). Conclusions made this way are based on the statistical inferences which on the other hand depend on the given data from the market. In this case, there are certain market trends in the cheese market in which Milly's Cheeses belong, trends which need to be analyzed for better informed decisions thereafter. A promising company development strategy through comprehensive and technical marketing analysis is all Mrs. Smart needs to make in order to answer the confusions in his case. This analysis targets the retail market in Australia, the competition with other cheese makers, and the cheeses consumers prefer the most. In order to come up with a perfect analysis of the three sets of market components above, three variables need to be examined: cheese variety, the region, quantity and price. Consider the table below showing the how cheese varieties and their prices spread across the three regions; Clare valley, Fleurieu Peninsula, and Adelaide Hills. The cheese sales in Australia within the time schedule given reveals the total sales and sales revenue of Blue vein, Goat's milk and Soft White in the region of Adelaide Hills, Clare Valley and Fleurieu Peninsula are 13824 and $76227.11, respectively as shown on the table 1below. The volumes of the three varieties in terms of their market share are also Blue vein, Goat's milk and Soft White are 32.76%, 34.05% and 33.19%, respectively, and the market shares in Adelaide Hills, Clare Valley and Fleurieu Peninsula are 32.38%, 34.07% and 33.55%, respectively. Notably fro the table, Clare Valley has the highest market share than the other two regions. The region also has the highest average pricing than the other three regions as shown in table2 below. Table 1: the market share of the three cheese varieties Table2: shares of the three varieties of the cheese varieties Niche analysis of the market is typical of the brand development and market expansion among the potential customers. According to ...brand survival in a market environment embraces the concept of the niche theory. Table 4: penetrations of the seven brand in the Cheese market environment According to table above, Milly’s Chesses, Little Barrel, Cow Creek, Cheese Please, Geraldine's, Udder Fun and Red Dog represent the highest market shares and penetration to lowest respectively. The brand Red Dog has higher purchase frequency than Udder Fun, Cheese Please and Geraldine's, which means it has excess loyalty. Therefore, the niche brand in this market is Red Dog. From the table below, it can be shown that Milly’s cheese has the biggest brand in the market followed by Little Barrel, Cow Creek, Cheese Please, Geraldine's, Udder Fun and Red Dog. It has a purchase frequency of 5.53 which is 0.91. In this way, it is very favorable to attract new buyers from other brands and sell products to them than it is to sell more products to sustain customers. Mrs. Smart should opt to this choice. It is important therefore, Mrs. Smart to invest more in attracting new customers for the Little Barrel than investing more on the exiting customers. The loyalty f the existing customers are not questionable based on the statistics above, while that of the potential customers is yet to be determined. 2. Marketing trends affect the players in the market due to the major effects of competition in the same market. In this cheese market, there are seven competitors (brands) over the possible 4000 shoppers (customers). The level of these brands competitiveness is determined by the level of the purchases aggregated by the shoppers and the brand itself within a year. The analysis below is aimed at proving whether there exists an evidence of niche or change-of-pace brands. It also illustrates the market implications considering the trends of the various performances of the various brands. Consider the table below showing the shoppers with references to the seven brands listed in the cheese market. The demand trends in the cheese market.   Period Total Average Purchase Rate Market Share Number of Buyers Penetrations Purchases Frequency Share of Category 100% Loyal Milly's Chesses 12744 3.186 40% 2030 57.58% 5.53 50.03% 30% Little Barrel 6758 1.69 21% 1463 36.55% 4.62 37.37% 19% Cow Creek 4426 1.107 14.00% 1088 27.20% 4.07 33.58% 18% Udder Fun 1641 0.41 5.20% 414 10.35% 3.96 29.01% 15% Cheese Please 2641 0.66 8.40% 695 17.38% 3.8 29.27% 16% Geraldine's 1857 0.464 5.90% 473 11.83% 3.93 29.38% 16% Red Dog 1459 0.365 4.60% 363 9.08% 4.02 32.14% 17% Category total 31526 7.882 100% 3550 88.75% 8.88     Average Purchase Rate 3.186 1.69 1.107 0.4103 0.6603 0.36475 0.4643 7.8815     Market Share #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1     Number of Buyers 0 0 25 0 39 0 5041 3550     Penetration 0.5758 0.366 0.272 0.1035 0.1738 0.09075 0.1183 0.8875     Purchases Frequency #DIV/0! #DIV/0! 0 #DIV/0! 0 #DIV/0! 0 0     Share of Category Requirements 25472 18085 13181 5656 9023 4539 6320     0.3737 0.374 0.29 0.2901 0 0 0   Out of the possible 4000 shoppers, the brands Milly’s cheeses, Little Barrel, cow creed, Udder fun, cheese please, Geraldine’s, and red dog demand an average purchase rate of 3.186, 1.69, 1.107, 0.41, 0.66, 0.464, and 0.365 out of the possible 7.882 purchase rates in the market. Market penetration of all the seven brands totals to 88.75% implying that there still exist some unexploited market niches. According to the table below, out of the possible 4000 shoppers, only 3550 are the buyers, a trend only implying gaps in the market niches yet to be exploited. Q3. Data set 3 gives the results of a discrete choice experiment about cheese choices of a sample of 1,100 consumers using the same design as discussed in lectures. There are three attributes – Cheese Variety (A=Soft white; B=Goat's milk, C=Blue vein), Location (A=Adelaide Hills; B=Clare Valley; C=Fleurieu Peninsula), and Price (A=3.50; B=$5.00). Analyze the data. In this case, the use of conjoint analysis is very important in the determination of the partworths. This will also help in calculating the utility of the alternatives and finally determine the market share of the alternatives in the market. Consider the following representation; Let bo be the utility for Alternative 1 which is Goat’s milk located in Fleurieu Peninsula and $3.5 price, b1 be the increase in utility for the Goat’s milk cheese, b2 be the increase in utility for cheese located in Adelaide Hills, b3 be the increase in utility for a shift in price from $3.5 to $5. By using excel, it can be obtained that b1=0.8592, b2=1.1981, b3=0.3401. Consider the table below; the partworths of cheese variety from A to B is 0.8592 which means the extra utility for changing cheese variety from A to B is 0.8592. in the same way, the location from A to B is 1.1981 implying that the extra utility for changing location from A to B is 0.4097. Finally, the location of higher price is 0.3401 since its price is 5 more than some of the other alternatives. The value of cheese variety from A to B is $1.5/0.3401 * 0.8592=$3.7895. And the value of location from A to B is $1.5/0.3401 * 1.1981=$5.2795. It means that 3.7895 is the increase in dollar values for cheese variety from A to B. 5.2795 is the increase in dollar values for location from A to B all in absolute terms. In the event that Mrs. Smart intends to get rid of all the cheaper cheese from Fleurieu Peninsula and to also relocate all the production to the Adelaide Hills, then it would mean consideration of the market shares of alternatives 1, 3 and 5 and then alternative 2 (4, 6, 7, 8) for the perceived increased profitability as shown in the tables below; and The market share of alternative 2 is 17.39% if chose alternative 2 as the new one. If chose alternative 4, the market share of alternative 4 is 41.09%. If chose alternative 6, the market share of alternative 6 is 33.20%. If chose alternative 7, the market share of alternative 7 is 53.96%. If chose alternative 8, the market share of alternative 8 is 62.22%. So Virgil should consider entering into this market with alternative 8. The market share will be 62.22% which is higher than other alternatives. So alternative 8 (Soft white & Adelaide) is the best for Mrs. Smart to adopt when entering into the market, i.e., once Mrs. Smart relocates the production, Soft White is going to the most preferable cheese. The profitability in Adelaide Hills may become sustainable due to the high demand in the region with better prices as shown on the table. The most preferable cheese as it stands from the analysis is soft white in all the regions and thus she should relocate production sites to Adelaide Hills knowing there is high demand for soft white there. References Bruggen, G. H. V., & Wierenga, B. (2006). Marketing management support systems: principles, tools, and implementation. Boston [u.a.], Kluwer Acad. Publ. Cooper, L. G., & Nakanishi, M. (2008). Market-share analysis: evaluating competitive marketing effectiveness. Boston, Kluwer Academic Publishers. Read More