Measuring and Interpreting Brand Performance - Case Study Example

Measuring and Interpreting Brand Performance Executive Summary This research is about measuring and interpreting brand performance. It directly relates to consumer and buyer behaviour. Several indicators have been used to determine the relationship between various brands with specific market aspects. Of the five brands under consideration, the main brand for analysis is the Snickers. The brand has been selected to show how it performs in relation to other brands. The research is divided into three main parts: brand performance, awareness & salience and demographics & segmentation. In the first section, there is an analysis of the types of markets. These are repertoires or subscriptions. Besides, there is the issue of enhancing consumer loyalty. In the second section, the point of concern is around the issue of salience and brand awareness. It is about the need and importance of ensuring a strong brand salience. There is also the issue of product re-branding in order to enhance market sales. This is through changing of key features of Snickers to facilitate increased penetration of the brand into the market. The third section of this research deals with the relationship between brands and demographic factors. The brands under consideration are analysed basing on various demographic factors. These include the marital status, the level of income per household and the gender of various consumers of the respective brands. The aim is to check on the trend of performance of various brands in relation to these changing variables. Various consumer profiles are assessed in relation to the performance of Snickers. After analysing the trend apparent in the Snickers, the necessary adjustments in terms of marketing strategies are put in place. This is aimed at improving the market performance of Snickers. Brand Performance There are very many indicators to be discussed in relation to brand performance. To begin, there exists a direct relationship between market share and the penetration rate. The higher the market share, the higher the rate of penetration (Solomon & Bamossy 2009, p.33). This is explained by the fact that if a product can easily penetrate, then it is much easier for that brand to attract more consumers. With regards to market share, the market share of the first two brands (Mars Bar & Kit Kat) is above average. Snickers’ market share is equivalent to the average performance of the market which is 20; while the last two brands (Twix and Nestle Gold) have a market shares that are below average (16 and 6.5 respectively). A look at the penetration column reveals the same trend. Snickers’ penetration rate is above average of the market; while the two brands above Snicker have market shares above market average. An analysis of the other indicators reveals a familiar trend of Snickers. The average purchase frequency, category buying rate and share of category requirements have one thing in common in relation to Snickers. The performance index for Snickers is slightly above the market average across the three indicators. It is only in the column of loyalty where the average score for Snickers is below the industry average. A repertoire market is characterized by solely few customers because buyers prefer to meet their requirements from many brands (Solomon & Bamossy 2009, p.37). This means that instead of customers being loyal to a single brand, they choose to commit themselves to a number of brands. On the other hand, subscription market is characterised by super loyal customers. Customers in this market are devoted to a specific brand. By use of performance metrics, there are substantial differences between a repertoire and subscription market. In a repertoire market, apart from the fact that few buyers acquire these products; those who purchase are also less loyal. This aspect is measured by the average purchase frequency and share of category requirement. When it comes to subscription market, the buyers are many and very loyal. In a subscription market, average purchase frequency is expected to rank higher than the repertoire market (Solomon & Bamossy 2009, p.29). From the discussion above, it will be appropriate to conclude that Snickers is operating in a repertoire market. This is because the percentage of buyers who are solely loyal is very low. Similarly, on average the frequency of purchase is very low. At this point, one thing to note is that buyers’ loyalty is subdivided among brands in the market. Just the way Marketing Director put it, rewarding loyal customers is one way of growing any particular brand (Neumeier 2006, p.112). The benefits that come with these rewards cannot be compared to the costs involved. This is because the success of any business is built around customer loyalty. Loyal customers are a guaranteed source of income. As long as they have a need, they will go to a specific seller. This category of customers does not need advertisement for them to buy a product. They represent core consumers. In order to increase their number and subsequently their value, rewards are very important. They only need to be designed appropriately so as to be effective. For instance, discounts should be designed in a way that will attract more consumers. That is, setting discounts in that the higher the quantity purchased the higher the discount rate (Kerin, Hartley & Rudellius 2010, 56). This will encourage consumers to buy more. At the same time, there is need to involve other mechanisms like introducing brand loyal membership cards. Gifts are also appropriate just as was suggested by Marketing Director and should be awarded on the basis of loyalty. Awareness and Salient Brand salience is the term used to refer to the level at which a certain brand is thought of by a customer. This mostly relates to the times when the customer is making purchase in shopping malls or any other place of sale (Arcature & Arcature 2009, p.78). Therefore, it is the thought that comes into the mind of the consumer while in that purchase setting. This particular thought can affect the consumer’s choice of the goods to buy. Those brands defined as strong salience are those that are thought about by customers more than other brands. If the salience is stronger it means the brand is very strong. When it comes to attitude, it is more about perceptions and feelings about at certain issue. While salience may be built through advertisement, attitude is in most cases based on somehow personal issues and feelings. Attitude has a weaker influence on purchasing behaviour and pattern. The main reason attitudes are never measured as compared to salience is because attitudes have a weaker impact on consumer behaviour in relation to purchasing. Therefore, attitude has little impact on consumer’s choice of brands. Contrary to attitude, salience has a stronger influence upon the choice of the brand. Therefore, building brand salience is essential as a strategy for market control (Arcature & Arcature 2009, p.82). A brand with a strong salience is likely to attract a huge market share. There quite a number of things notable in relation to salience. First of all, the salience for users is higher than the salience by the whole sample (both users and non-users). Users only rank higher because this particular group already understands the product. This is because they have been using the product already. This trend has been seen in all the brands. While analysing the relationship between salience among users alone and the whole sample, Mars Bar contain figures that are somehow different from others. The salience index for the two categories is very close compared to other brands. For the other four brands, salience for the whole sample is almost half. The reason for this is because of the likelihood of having a high component of users in the whole sample. Snickers’ performance in the whole sample is 18 while for its customer base is 35. Its performance is in one way expected. The results are a reflection of what is happening in most of the brands. From the trend on the table, the salience for the whole sample is almost half the salience of users only. Since the same trend has been replicated in the Snickers brand, The decision by the Marketing Director to re-brand is a good one. This would be a nice move. Changing the way a product appears physically is a great idea because things that attract customers to the buyer are mostly what can be seen. Physical attraction plays a significant role when it comes to product marketing (Kerin, Hartley & Rudellius 2010, 61). It is also a move towards re-branding the old product. Therefore, this move will be beneficial to the company in the move to ensure a very strong salience. A well designed change in both colour and font will create a differentiation aspect concerning the brand. This is one item that will attract the attention of buyers. The outlook of the new brand is supposed to enlighten the buyers. In case the product had become inferior, there is need to give the product a completely new image. This move is focused on giving the Snickers a completely new appearance. This will not only attract existing customers but also new buyers are more likely to be attracted. There are many companies who have adopted this strategy and it has turned around the performance of their respective products. The item to pay attention to is to ensure the choice of new colour and font is the most appropriate. This is because the worst may strike if the selected colour is not better than the original colour. Demographics and Segmentation The data in table 3 below has a lot of details relating to the relationship between the various brands’ purchasing and relationship status of the consumers. From the trend that has been seen, there is no much difference between Snickers and other brands. The variation across the brands is not that extreme. The reason it is hard to single out Snickers is because of the inconsistencies across various customer profiles. For instance, Snickers is leading in the number of divorced customers while at the same time has the least number of single customers. There is a thin line between the singles and the divorced; yet this happens to be the trend. The same applies to the brand that is leading among the singles. It has the highest number of customers who are single and the lowest number of customers who are divorced. This particular trend reveals one thing about the consumer needs of the singles and the divorced. The needs for the singles and the divorced are so diverse in that if single customers love a particular brand then only few of the divorced may prefer the same brand. Therefore, we learn that most singles prefer the Nestle Gold while most divorced prefer the Snickers. The data in table 4 shows the relationship between total household incomes with various brands. The Mars Bar has the highest number of customers in the category of income of between $50000 and $70000 and that of less than $50000. Kit Kat has the highest number of customers with income of over $70000. Across the income brackets, there is a steady increase of customers. Yet at the same time, the performance of Snickers is not any different from other competitors. Snickers have the lowest customers in the bracket of less than $50000 while having a higher number in the category of above $70000. Once again, Snickers does not exhibit a unique performance from the rest of the competitors. The last table, no. 5 shows the relationship between gender and the various brands. From the table we learn that Twix is loved by many male customers while Kit Kat is the brand that is loved most by the females. The performance of Snickers once again is almost average. The brand is not leading or dragging in terms of the proportion of male and female who love this brand. An analysis of the three tables reveals that the performance of Snickers is average across all the demographic aspects that have been used in this particular research. This calls for the appropriate positioning of Snickers in the market to make sure they sell their products. The retardation of these brand demands for a change in marketing strategies (Kerin, Hartley & Rudellius 2010, 65). Snickers have not been competitive enough across all the aspects of research that have been used. This indicates that the marketing strategies being applied to Snickers are not effective. The change in the marketing approach may include the already suggested alternatives like re-branding. This is focused on giving Snickers a new look that will be essential in market penetration. References Arcature, L & Arcature, J.K 2009, Six Rules for Brand Revitalization: Learn How Companies Like McDonald Can Re-Energize Their Brands, Pearson Prentice Hall, New Jersey, p.78- 82. Kerin, R, Hartley, S, & Rudellius, W 2010, Marketing, McGraw-Hill, New York, p.56-65 Neumeier, M 2006, ZAG: The Number One Strategy of High Performance Brands, Peachpit Press, New York p.112-115. Solomon, R & Bamossy, G 2009, Consumer Behaviour: A European Perspective, Prentice Hall, New York, p.29-39. Read More