The paper “ The Performance of Mars Bars with Other Brands in Its Category Including Kit Kat, Twix, Snickers, and Nestle Gold” is an impressive example of a case study on marketing. There is a management catchphrase that says, ‘ what is not measured is not managed’ . It is important for businesses to keep track of their performance in the long term in order to ensure continued success. The major advantage of measuring brands is that it connects the management of brands to business performance. This system is most potent when regarded as a strategic management tool for the ongoing enhancement rather than one time only measurement of brand performance.
An efficacious brand measurement system assists firms to; Gauge how well the brand is doing in comparison to competitors, Recognise the weaknesses of the brand before they escalate into problemsIdentify the areas where the brand-building focus needs to be concentrated in order to create business value (Munoz & Kumar, 2004). The Dirichlet Model (Ehrenberg et al, 1984) traces the repeat purchase patterns that are displayed by brands within a product category. It is useful in the analysis of brands.
Dirichlet modelling entails application of the model to create an assessment of the brand performance including the rate of purchase, market share, purchase frequency, penetration, the share of category requirements and loyalty. This assessment is called ë theoreticalsí and is used in comparison to the ë observedsí whose calculation is done directly from the data gathered (Ehrenberg, Uncles et al, 1995). AnalysisIn the brand performance metrics, Mars Bar market share in comparison to other brands can be illustrated by the following graph: Market ShareMars Bars have the highest market share at 34% which is 10% higher than their closest competitor, KitKat.
Snickers and Twix which come after having fairly even competition while Nestle Gold trails the group in market share. Mars Bar’ s market share is also higher than the group average. PenetrationThere is quite a gap between the penetration of Mars Bars and other types of chocolate. The graph dips sharply from Mars Bars’ 74% penetration to Kit Kat’ s 52%. This again evens out for Snickers and Twix before dipping significantly in the case of Nestle Gold. Average Purchase FrequencyWhen it comes to purchasing frequency, Snickers beats Mars Bars by 0.1 of a point.
The average for the group is 1.9 which shows that purchase frequency is relatively even across the board. The differences between one brand and another are negligible apart from the Nestle Gold which is still significantly lower than the rest. Category Buying RateThe rate of purchase per category is inverted as compared to other categories. Mars Bars have the lowest category buying rate and Nestle Gold the highest. Share of Category RequirementsMars Bars have the highest share of category requirements. This follows the same pattern as the other categories with Mars Bars being ahead of the other brands. Sole LoyaltyMars Bars commands the highest brand loyalty of the group, followed by Kit Kat then Snickers.
Twix and Nestle Gold do not command any type of sole loyalty from consumers. MarketsIn the categorisation of offline patterns of behaviour, the research found that markets are classified through the consumer choices displayed by them. These are classified into Repertoire and Subscription markets (Sharp, Wright & Goodhardt, 2002). These two can be distinguished by the loyalty behaviour displayed by the consumer to the primary brand.
The former market involves consumers developing loyalty to a set or repertoire of brands. They use these brands to purchase a majority of goods, and they are loyal to the entire repertoire of brands rather than any individual one. This means that consumers do not develop sole brand loyalty. The latter market consists of consumers who display a considerably higher degree of loyalty behaviour toward one brand mainly because of contractual obligations to a single supplier. The Negative Binomial Distribution-Dirichlet model (Goodhardt, Ehrenberg and Chatfield, 1984; Uncles, Ehrenberg and Hammond, 1995) has a measure that describes this characteristic loyalty known as the S parameter.
This parameter tends to be high for repertoire markets (usually over 0.8) and low for subscription markets (less than 0.2).