Mars Bars: Measuring and Interpreting Brand Performance - Assignment Example

Measuring and Interpreting Brand Performance Table of Contents Executive summary 2 Section 1: Brand Performance 3 Question One 3 Question Two 3 Question Three 4 Section 2: Awareness & Salience 5 Question Four 5 Question Five 7 Question Six 8 Section 3: Demographics & Segmentation 9 Question Seven 9 Question Eight 10 References 11 Executive summary This report has focused on measuring and interpreting brand performance. In particular the report has focused on various brand elements as brand performance, awareness and salience and demographics and segmentation. It is true from the analysis that Mars Bar is the market leader in the industry going by its share of market, penetration, category requirement and customer loyalty. Compared to its competitors, Mars Bar has a high performance metrics. The brand is operating in a repertoire market. The differences between a subscription and repertoire market is that unlike in a repertoire market, in a subscription market each brand commands a high proportion of market share and that the brands customers rarely buy from other brands in the market. Since Mars Bar is operating in a repertoire market, its loyal customers are not many. In reality heavy buyers are usually very loyal to the brand. Focusing on heavy buyers means that the company will incur more expenses in a bid to attract new customers as compared to retaining the loyal customers. In terms of awareness and salience, it is true that compared to other brands, Mars Bars has the greatest ‘top of mind awareness’. This implies that when the buyers plan to make a purchase, Mars Bars is their first choice. In terms of demographics and segmentation, customer profile of Mars Bar is quite different from that of its competitors which is indicated by the demographic-relationship status. From the table of demographic –total household income it is conspicuous that the affluent class earning between over $70k prefer the brand and purchase it on a regular basis. Looking at the gender segment we see deviation this time round being tilted towards the female customers. The implication for Mars Bar strategy is that it should employ a marketing mix that puts in place both male and females, high income earners and low earners as well as singles and the divorced. Section 1: Brand Performance Question One Brand performance shows how successful a specific brand has been in the market and is used to evaluate the strategic successes of the brand as compared with other competing brands (Chirani et al. 2010). Brand performance can be divided into two main parts, brand profitability and brand market performance (Chirani et al. 2010). Market share is an important index in measuring the success of a specific brand and its performance. It is evident that Mars Bar is the market leader in the industry going by its share of market, penetration, category requirement and customer loyalty. All the same the brand’s category buying is the lowest. From the table category buying of Nestle Gold is more than that of Mars Bar. This pattern proves that category buying rate is of no impact in determining the level of market share, category requirement or penetration. Category buying of Nestle Gold is more than that of Mars Bar although its market share, penetration and mean purchase frequency is actually lower than that of Mars Bar and even than market average. This means that category buying has no noticeable impact on brand performance metrics. Question Two Mars Bar is operating in a repertoire market. The pattern of double jeopardy is quite conspicuous. In this case the lower penetration brands are suffering two tragedies. It is evident that very few people buy from them and that those that do buy are less loyal and in extreme cases no loyal at all. This is measure by the share of category requirement, average purchase frequency and proportion of loyal customers. It is also clear that no brand has more than 50 percent share of category requirement and that most brands have less than 10 percent of loyal customers. There are a number of differences between a subscription and repertoire market as long as the brand performance metrics are concerned. Unlike in a repertoire market, in a subscription market each brand commands a high proportion of market share and that the brands customers rarely buy from other brands in the market (Sharp et al., 2002). Each brand is able to satisfy it’s a big proportion of its customer’s category requirements. Subscription market also deviates from the double jeopardy phenomenon. It does not follow that those with few customers also record lower levels of customer loyalty (Wierenga & Bruggen 2000). In actual sense customer loyalty seem to be independent of the market share of the brand. In subscription market despite the difference in market share between brands, the minor brands are able to satisfy over 80 percent of its customers’ category requirements. Question Three Since Mars Bar is operating in a repertoire market, its loyal customers are not many. In reality heavy buyers are usually very loyal to the brand. These are customers that are of great value to the firm especially since it has direct impact on the profit margin. Dissatisfied customers will divert to other brands and after sometime they may be totally lost (Keiningham 2005). The percentage of loyal customers is not high meaning that the brand has very few heavy buyers. Focusing on heavy buyers means that the company will incur more expenses in a bid to attract new customers as compared to retaining the loyal customers (Keiningham 2005). We need to critically evaluate the cost benefit analysis regarding the two moves. Benefits that will accrue from committed customers are lower than the cost that will be incurred in the process of attracting new customers. For Mars Bar to increase its percentage of loyal customers it is important that it should focus on light buyers because in reality the expenses that will be borne to attract new customers and to retain customers who are less loyal will be lower than the benefit that will accrue from the loyal and heavy customers. Section 2: Awareness & Salience Question Four Brand salience can be defined as the level to which a company’s brand is noticed by a client when he/she is doing purchase (Elliott and Percy 2007). According to studies, strong brands comprise a greater degree of salience whilst weak brands entail small or no degree of salience (Ehrenberg et al.1997). Ehrenberg et al. (1997) also puts forth that a brand with higher salience has increased number of individuals who: Know about the existence of the brand Have an awareness of the brand Frequently purchases the brand Considers it as a brand they have a high probability of purchasing and using it as a substitute Considers it to have a brand reassurance Have positive attitude regarding the features of the brand Have brand loyalty Richly and frequently talk about the brand as well as recall and note it when advertised. Salience concerns the number of clients who regard a brand sufficiently well to perceive it as most important (Elliott and Percy 2007). In this case the actual differentiation takes place in the margin. This means making certain that competitive brands are differentiated in terms of emotionally features which associate with certain desired target segments. Besides, the actual differentiation is having an awareness that the exact salience of a brand lives in the minds of buyers which assist them in identifying commodities which guarantee them a specific amount of benefit (Ehrenberg et al.1997). Brand salience is different from top of mind awareness and attitude. Basically, top of mind awareness refers to the type of brand that comes in customers mind when requested to bring to mind brands in a certain grouping (Elliott and Percy 2007; Mengmeng of Adelaide 2012). It is when individuals consider a brand initially in order to realize their service or product requirements. Attitude on the other hand refers to the long-term neutral, positive or negative assessment of an individual, organization or brand (Elliott and Percy 2007). Attitude focuses on a brands evaluation rather than the quality or quantity of how it is recalled. Top mind awareness and brand salience are differentiated by the purchasing situation and the relationship to memory structures. There are various benefits of building a brand salience. It is broadly recognized that customers perceives available brands as being the same. However, they purchase a specific brand since they are more familiar with it but not since it is unique or different from the other brands. This means that building brand salience will make customers to be more aware of the brand thus think of it every time they ant to make a purchase. According to Larry (2003) individuals make their decisions based on memory procedures to a lesser or greater degree. Question Five Compared to other evaluators of brand performance, salience is deemed to be generic in nature. Whilst buyers want to make a purchase, how brand is recognized is what is referred to as brand salience. Brand salience is estimated during purchase and this is based on opinion characteristics and how they are swayed by search objectives of buyers. From the table it is true that compared to other brands, Mars Bars has the greatest ‘top of mind awareness’. This implies that when the buyers plan to make a purchase, Mars Bars is their first choice. Snickers and Kit Kat on the other hand have approximately similar position in subsequent priority. In general, Mars Bars has the highest brand awareness. From the table it is also clear that Kit Kat has a good position in the minds of buyers although compared to Mars Bars which is the market leader, the former comes second. This implies that Mars Bars performs as anticipated both in the entire sample and in its clients’ base. It is vital to look at salience for brand users separately due to various reasons. For instance, users of a specific brand often are interested in a brand salience as compared to non-users. Generally they become aware of cues and salience for a certain brand and this is what attracts such consumers towards making a purchase. As a result, focusing on salience for specific brand consumers may assist marketers in understanding the cues employed by customers whilst making a better purchasing decision. This will result to the brand offering increased appropriate salience about the brand to the customers. According to Ehrenberg et al. (1997) establishing brand salience amplifies the number of buyers who will reflect on the brand and the times they perceive it whilst making a purchase, so as to increase the profits made from the brand. Question Six The measure of brand salience includes a number of significant factors. One of the factors is that a brand should encompass an array of cues that can be employed to reflect on a brand (Mengmeng of Adelaide 2012). In addition to this, the brand should be capable of gauging retrieval with the rivals and not merely as a sovereign brand as well as focusing on retrievals. As a result, a brand should center on communicating and defining various brand cues and amplify the quality and quantity of employed memory structures (Mengmeng of Adelaide 2012). In order to build a brand salience, there are various suitable marketing strategies that can be used. One such strategy is focusing on linking a wide array of cues to a brand, instead of centering on a specific cue for a brand (Mengmeng of Adelaide 2012). This is for the reason that increased cues can amplify buyer purchase opportunity in the purchasing situations. The ten cues that can be incorporated for a chocolate brand advertisement encompass: Nutritious for kids Pricing association with emotions relationship with certain event connection with traditional standards support of any famous person diverse flavors and tastes association with traditional values Source of joy in distressing moments accessibility Place and distribution promotional strategy Section 3: Demographics & Segmentation Question Seven Customer profile of Mars Bar is quite different from that of its competitors which is indicated by the demographic-relationship status. From the table the statistics for couple, single, separated, divorced deviations, average MAD are almost identical the only difference occurring in couple deviation and single separated deviation categories. It is also evident that more median absolute deviation towards in the separated and divorced from the average. From the table of demographic –total household income it is conspicuous that the affluent class earning between over $70k prefer the brand and purchase it on a regular basis. Those individuals earning low income purchase fewer quantities of the brand, in this case more deviation is tilted towards the low income earners. Looking at the gender segment we see deviation this time round being tilted towards the female customers. The buying trends of female customers tend to fluctuate more as compared to the male customers. Question Eight There is more deviation in divorced separated category from the average value as compared to the couples and singles. This means that the buying habit of individuals who are divorced is changing rapidly. This implies that focus should be leveled on the divorced category together with the singles. On the other hand median absolute deviation is on the low income earners. This means that they buying habit is changing with time and therefore strategic moves that will accommodate them should be mooted. This may involve price adjustment. In the gender part more deviation is in the female category. This means that male customers are more loyal to the brand. A marketing mix can be put in place that will pull the female customers and at the same time retain male customers. References Chirani, E., Taleghani, M., & Moghadam, NE 2012, Brand Performance and Brand Equity. Interdisciplinary Journal of Contemporary Research in Business, vol. 3, no. 9, PP. 1033-1035. Ehrenberg, A., Barnard, N., and Scriven, J 1997. Differentiation or salience, Journal of Advertising Research, 37/6: 7–14.) Elliott, R and Percy, L 2007, Strategic Brand Management, Oxford, Oxford University Press. Keiningham, TL 2005, Loyalty Myths: Hyped Strategies that Will Put You Out of Business-- and Proven Tactics that Really Work, New York, John Wiley & Sons. Larry, A 2003, Actionable Market Segmentation Guaranteed. Retrieved 10 17, 2011, from Ipsos-Insight: http://www.ipsos.ru/whitepapers/Ipsos%20Group/Actionable%20Market%20Segmentation%20-1.pdf (Accessed on June 2, 2012). Mengmeng of Adelaide, 2012, Brand salience, top of mind awareness and attitude. http://mengmengofadelaide.blogspot.com/2012/03/brand-salience-top-of-mind-awareness.html (Accessed on June 2, 2012). Sharp, B.; Wright, M., & Goodhardt, G 2002, Purchase Loyalty is Polarised into either Repertoire or Subscription Patterns. Australasian Marketing Journal, vol. 10, no. 3. Wierenga, B., Bruggen, VG 2000, Marketing Management Support Systems: Principles, Tools and Implementation. Dordrecht: Kluwer Academic Publishers. Read More