Measuring and Interpreting Brand Performance - Term Paper Example

Measuring and Interpreting Brand Performance Executive Summary Marketing strategies are an important means of competing with the competition in the market today. In order to develop a proper marketing strategy for a brand, there is need to evaluate the brand position in the market in comparison to competitor brands. Brand attributes such as performance, awareness and salience and demographics are necessary to understand brand position in the market and design a marketing strategy targeted to reach to potential customers. This paper analyses the three attributes for five different types of chocolates and focuses on the marketing strategies for one of them, Mars bar. Brand performance includes aspects such as penetration and market share. In addition, it addresses loyalty for a brand. Awareness and salience analyzes how people are aware of the products and how fast they are remembered in a purchasing situation. Demographics studies how preference for different brands vary with gender, income and social class. Brand performance leads to making marketing decisions involving the best marketing strategies to be used. These include either subscription market or repertoire market. Brand awareness addresses the best strategies to make a brand known, easily remembered and positively valued by customers. These include cues and advertisement strategies. Demographics give an insight into the best population to target hen advertising. Different customers depending on the amount they are ready to use purchasing the product prefer different products. Other factors such as age and gender differ offering different marketing strategy options. Brand Performance Brand performance is a measure of brand value in bearing interest and contributing to the success of the business as a whole. How a brand contributes to the success of a business is monitored by maintaining strict records of costs of maintenance and supervision (Schürrle, 2009). Brand Market Share Penetration Average Purchase Frequency Category buying rate Share of Category Requirement loyalty Mars bar 34 74 2.2 5.8 39 22 Kit kat 24 52 2.3 6.2 37 7.7 snickers 20 48 2 7.4 27 4.2 twix 16 46 1.7 7.3 23 0 Nestle gold 6.5 26 1.2 8.5 14 0 Brand performance is determined using different measures. For instance, market share and penetration. (Ehrenberg, 2002).From the tables, milk bar has the highest market share as well as the highest penetration percentage. Nestle gold on the other hand has the lowest market share and the lowest penetration ratio. Bigger brands, milk bar and kit Kat have more buyers and a higher purchase frequency than smaller brands. The latter do not have loyalty unlike the former with higher loyalty percentages. Average purchasing frequencies for milk bar, kit Kat and snickers are almost the same around 2. However, that for Twix and nestle gold is much lower. There is a statistical selection effect where smaller brands lack competitive advantage. Smaller brands suffer double jeopardy. They have fewer buyers and those who buy are less loyal (Ehrenberg, 2002). They are not loyal at all for nestle gold and Twix. Milk bar naturally monopolizes the market. A number of factors could contribute this. The market store size could higher than that of competing products. Products with many big stores have a higher penetration advantage compared to those with few and small-sized stores. The marketing strategy used for a brand could result into the observed differences in penetration. Heavy advertising and using means of attracting light frequent buyers could also contribute to this deviation (Ehrenberg, 2002). The marketing strategy for milk bar gives it a competitive advantage. It uses subscription-marketing strategy. This is where customers subscribe to a single supplier of a product or service, for example phone service providers (Sharp, 2002). The proportion of loyal customers is extremely high despite having a slightly lower repetitive customer frequency compared to kit Kat. This implies that customers have subscribed for milk bar and go for competitor products very rarely. Smaller brands are prone to random sampling and have no constant customers. There are differences in brand performance between subscription market and repertoire markets. In repertoire markets, customers make repetitive purchases while in subscription marketing, customers subscribe to a particular product. With the former, customers are shared with other competitive brands while with the latter, customer are not shared. Therefore, loyalty percentage for subscription marketing is generally high and constant with time. On the other hand, loyalty percentage for repertoire markets is small and decreases with time (Sharp, 2002). The two markets vary in the measure of heterogeneity in choice probabilities. This measure ranges from zero to infinity. When it is zero, it implies that there is no diversity in choice of products by customers. They select more or less the same product. Increase in heterogeneity indicates increase diversity of choices by customers (Sharp, 2002). Getting more light buyers instead of heavy buyers works as an effective marketing strategy in the short term. This is because the same customers are shared among other competitor brands (Sharp, 2002). With a small brand, that has a low market share and penetration percentage, using repertoire-marketing strategy may be fruitless. These brands suffer double jeopardy. Therefore, with a small brand, subscription marketing is likely to be a better strategy. Higher share brands are bigger because they have many customers. With repertoire markets, sole loyal customers are rare and light buyers. Heavy buyers are not often sole loyal customers (Ehrenberg, 2002). Where there are enough outlets to provide a brand, targeting many light buyers is better as a product upgrades from a small to a large brand through the number f customers. However, where the outlets are fewer compared to competitor outlets, targeting heavy buyers is more viable. Awareness and Salience Brand awareness is the ability to identify and remember a brand and link it to its logo and brand name in different situations. Brand salience is the ability of a brand to “stand out” or be noticeable to a customer. Often, brand salience is considered synonymous to brand being “top of mind” (Romaniuk and Sharp, 2004). However, this is not the case from the tables provided. Top of mind awareness refers the first brand a customer recalls when asked to name products of a particular category (Romaniuk and Sharp, 2004). Brand salience is linked to buying probability and has been found to predict the possibility of purchase of a commodity. Unlike brand attitude that has little influence to a purchase decision, brand salience has influence on brand repertoires and is used to determine market share of various brands. Attitudes evaluate the brand while salience is the ability to retrieve the brand in a purchasing situation. The higher the brand is salience the more positive the attitude becomes (Romaniuk and Sharp, 2004). Building brand salience is of vital importance in marketing. It determines how much of a brand the customer knows and how fast the brand is recalled in a buying situation. The more a customer knows about a brand, the higher the probability of recalling and buying it. In many situations, focusing on customers’ judgment about a product does not reflect on retrieval when buying. Improving brand salience influences retrieval hence purchase (Romaniuk and Sharp, 2004). Brand Top of Mind Awareness Overall Brand Awareness Salience (whole sample) Salience (users only) Mars bar 41 89 36 42 Kit kat 19 73 21 41 snickers 18 72 18 35 twix 12 65 17 35 Nestle gold 2 10 12 43 From the tables, mars bar has a total awareness percentage of 83, top mind awareness of 41, salience of 36 for the whole sample and of 42 for users only. This implies that it is the first product in the minds of 41 customers when chocolate is mentioned. However, it is only recognizable to 36 customers in the sample and 41 of those who use it. Despite high top mind awareness, its salience is slightly lower, meaning that though it may “stand out”, it is not completely recognizable to those who know it. On the other hand, nestle gold has the least awareness; however, compared to the awareness, its salience is high. Total brand awareness is 10 and salience is 12 in the whole sampleand43 among the users. There is an implication that it “stands out” to the few who know it. As a marketing strategy, nestle gold should emphasis on awareness while mars bar should concentrate on brand salience. Salience for brand users is separated so that there is clear indication of how well the users recognize he brand. Some brands in the market may share some cues thus end up being confused by customers. There are strategies that can be used to enhance brand salience. First is working towards defining different cues. How memorable and outstanding different cues are improves brand salience. This may be achieved by doing a customer research to identify the most relevant cues creatively structuring the cues. This increases the number of memorable cues on a product (Randall Beard’s Blog, 2010). A second strategy is designing unique memorable cues. This may be the logos, pictures, color mix and wordings on the brand. They all work towards making a brand memorable and salient (Randall Beard’s Blog, 2010). Brand marketing takes various strategies. For products that have been in existence for long and are habitually bought, advertisement focusing on brand name and packaging is appropriate. For such products, persuading the customers or changing attitude does not work well. Salience is achieved when a customer is able to recognize the packaging or recall the brand name. Marketing strategy should therefore show the packaging as it is with the real product. When packaging is not available, the brand name should be remembered (Elliott and Perc, 2007). To promote brand salience, there should be positive attitude towards the brand as well as brand awareness. In a competitive market, brand awareness should concentrate more on quantity rather than quality and increasing the range of attributes associated with the brand. This results to “a wide mental distribution for the brand”. In addition, advertisement should focus on attributes that the brand could deliver, not deliverable by competitors (Elliott and Perc, 2007). Music is another strategy used to create salience. The tempo, type and presentation of music create memory of a brand. Slow music influences the time spent by customers in a store thus positively influencing sales. The type of music influences the cognitive process. For example, classical music in the background of a wine store was found to influence sales. The type of music should match target customers. Youth and elderly people prefer different types of music and influences how well they recall a product (Elliott and Perc, 2007). Brand name influences salience. A brand name that conveys a brand benefits is more likely to be recalled after an advertisement than one that does not. Associating a brand with influential celebrities has also been found to influence brand Salience and penetration. Sport celebrities such as David Beckham influence a large number on young people for example and equally influences a brand associated with them (Elliott and Perc, 2007) Cues in Advertisement of a Chocolate Brand Cues expected in a chocolate brand include well- shaped elegant box with flowers and glittering gold with the color of the box changing with the flavor of chocolate inside (Clegg, 2006). The quantity and packaging should be of optimum amount and matching with the price. The nutritive value should be indicated. Some chocolate bars contain different nuts. These should be indicated and the nutritive value emphasized. The name should emphasis on such additives as nuts and milk for easier memory. They differentiate between tastes of different nuts. In addition, the packaging should include biological contents of the chocolate. These biological components include Anandamides and Methylxanthines (Morris, 2012) The shape of chocolate brand should also be emphasized. Shapes are usually circular, oval, rectangular among others depending of the brand. In addition, the brand name should be unique and memorable. The picture used in the chocolate should be unique, either of the unique additive or expressing the sensual feelings obtained from the chocolate in addition to matching the advertising situation with the benefits of the chocolate. For example, advertising in a summer theme rather than winter is more likely to produce better sales. Chocolate being more of a ladies’ product than men’s’ it is expected to feature soft female celebrities. For example, those associated with soft music. Demographics and Segmentation Demographic segmentation involves dividing the customer base into variables such as age, gender, income and nationality. Customer needs are related to these variables. It is therefore easy to analyze data and decide marketing strategies (Bhasin, 2011). Brand single deviation couple deviation Separated/ divorced deviation Mars bar 22 2.5 62 -3.2 14 0.7 Kit kat 17 -3.1 68 2.2 14 1 snickers 16 -3.3 65 -0.9 18 4.2 twix 20 0 68 2.8 9.2 -4.2 Nestle gold 24 3.8 65 -0.9 12 -1.7 From the table above, many singles prefer nestle gold followed by mars bar. Snickers and kit Kat are least preferred by singles. Kit Kat and Twix are most preferred by couples with mars bar being couples’ least favorite. Twix is least preferred but divorced and separated persons. This may be attributed to financial stability of couples than singles. Brand Less than $50,000 deviation $50,000 - $70,000 deviation More than $70,000 deviation Mars bar 23 3 29 5.8 31 -7.6 Kit kat 21 1.3 19 -4.3 43 4.2 snickers 16 -3.4 22 -0.9 40 0.9 twix 21 1.2 22 -0.9 39 0.4 Nestle gold 18 -2.2 24 0.3 41 2.1 From the table above, mars bar as most preferred by those earning below $ 50,000 and least preferred by those earning over $70,000. Kit Kat and nestle gold was the best preference for those earning over $ 70,000. This may be because they are expensive and not affordable by low-income earners. In addition, the number of people in the salary bracket of below $50,000 may be high leading to high preference for mars bar. Brand male deviation female deviation Mars bar 40 4 60 -4 Kit kat 34 -1.7 66 1.7 snickers 35 -0.8 65 0.8 twix 36 -0.6 64 0.6 Nestle gold 35 -0.8 65 0.8 More females than males consume chocolate. Most males prefer mars bar while most women prefer kit Kat. Mars bar is least preferred by women while kit Kat is the worst males’ favorite. Demographic data is important in marketing. Preferences for products change with age, social class and income. This data reflects potential targets for mars bar. For example, the marketing strategy used will be more towards targeting low-income earners and men. Promotion strategy used to reach these consumers varies with social classes (the presenters, 2011). Therefore, mars bar will be able to design a marketing strategy oriented towards capturing more potential customers. Conclusion To understand how a brand is performing in the market, several aspects need to be known these include brand performance, salience, awareness, and demographics in the market. Brand performance gives an insight into how a brand is faring in a competitive market with related products. It is used to determine the best marketing strategy. Mars bar uses subscription marketing thus has a large loyalty percentage compared to the competitors. Brand awareness and salience is a measure of how well a product is known in the market and how fast it is retrieved in a buying situation. Strategies used to ensure brand salience are getting unique cues, a memorable brand name, using music and celebrities when advertising and working towards a positive attitude of a brand. Demographics and segmentation involves studying the market in different variables of age, income, social class and gender. Men’s preferences differ from women’s. In addition, preferences for low-income earners differ form those of high income earners, knowledge of demographics trends for a brand ensure targeting the right market when advertising. REFERENCES Schürrle, Maximiliana 2009, Brand Performance, what does this mean? Retreived on 7th may 2012 from http://www.briefletter.com/en/archive/31-brand-performance-what-does-this-mean.html Ehrenberg, SC 2002, Understanding brand performance measures: using Dirichlet benchmarks Journal of Business Research 57 (2004) 1307– 1325 Sharp, Byron 2002, Purchase Loyalty is Polarised into either Repertoire or Subscription Patterns Australasian Marketing Journal 10 (3), 2002 Romaniuk, Jenni and Sharp, Byron 2004, Conceptualizing and measuring brand salience Volume 4(4): 327–342 Randall Beard’s Blog (February 22nd, 2010) Brand Salience – Why It Matters for Your Brand retrieved on 7/5/2012 from http://randallbeard.wordpress.com/2010/02/22/brand-salience-why-it-matters-for-your-brand/ Elliott, Richard and Perc, Larry 2007, Strategic Brand Management Oxford University press, London. Morris, Kristen 2012, Eating Your Way to Happiness: Chocolate, Brain Metabolism, and Mood karger gazette retrieved on 7/5/2012 from http://www.karger.com/gazette/68/morristaren/art_3.htm Clegg, Alicia 2006, senses cue brand recognition brand channel, retrieved on 7/5/2012 from http://www.brandchannel.com/features_effect.asp?pf_id=304#author The presenters ( November, 2011) Research papers in Marketing retrieved on 7/5/2012 from http://www.thepensters.com/lubale/research-papers-in-marketing.html Bhasin Hitesh(2011), Demographic Segmentation retrieved on 8/5/2012 from http://www.marketing91.com/demographic-segmentation/ Read More