CMKT 300 Marketing Metrics and Analysis

Armand Gervais
 In order to follow along with these Pre-recorded
Lectures first retrieve everything you need from D2L.
 This PowerPoint presentation is posted on D2L along
with this video
 Before you begin this lecture Retrieve the Brand Z 2020 Report
by following this link:
 https://www.kantar.com/campaigns/brandz/global

 Read Pages 11-82. Most of these pages are images.

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Source: https://www.kantar.com/campaigns/brandz/global
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Source: https://www.kantar.com/campaigns/brandz/global
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 Step 1 Attribute corporate earnings
to each brand & then calculate Brand
Multiplier for that Brand
 Step 2 Estimate Brand Contribution
 Step 3 Calculate Brand Value
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 The final step is to consider the projected earnings of the brand in
question, which measures the brand’s ability to generate earnings into
the future and requires the addition of a final component—the Brand
Multiple, which is also calculated from financial data sourced from
Bloomberg. It’s similar to the calculation used by financial analysts to
determine the market value of stocks (Example: 6X earnings or 12X
earnings).
 When we multiply the Branded Intangible Earnings from Step 2 by the
Brand Multiple, we reach the brand’s true Financial Value—i.e. the
proportion of the parent company’s $ value that can be attributed to the
brand in question accounting for current and projected performance.
 We are going to assume a Brand Multiple of 12X for Gillette. Notice this
should be some value between 5-30X.
 The Brand Multiple would also be provided in questions.
Financial Value of Brand = $1.3 Billion * 12 times= $15.6 Billion.

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 FINANCIAL VALUE X BRAND (Part 1) * CONTRIBUTION (Part 2)
 Brand Value is the $ amount that the brand contributes to the overall
business value of the parent company.
 BRAND VALUE of Gillette= $15.6 Billion * 100%= $15.6 Billion.
 Now if we compare our calculation to the Brand Z value for Gillette on
page 69 of the 2020 Global Brand Z report to $15.166 Billion we are
very close to their value.
 By making a few reasonable assumptions we were able to calculate
the Brand Value of Gillette using the Brand Z methodology.
CMKT 300 Marketing Metrics and Analysis
Armand Gervais
 In order to follow along with these Pre-recorded Lectures first retrieve
everything you need from D2L.
 This PowerPoint presentation is posted on D2L along with this video
 These metrics are also covered in the Modules with examples
Market share gives an overall idea about the composition of an industry
– Market Concentration
– Relative Market Share
– Share of Category
Unit Market Share (%) = Unit Sales (#)
Total Market Unit Sales (#)

Revenue Market Share (%) = Sales Revenue ($)

Total Market Revenue ($)

Relative Market Share (I) (%) = Brand’s Market Share ($,#)

Largest Competitor’s Market Share ($,#)
Next we’ll calculate the Unit and Revenue Market Shares for
the Pet Food:
Unit25,000
Sales (#)
Unit Market Share (%) =
50,000
Total Market Unit Sales (#)

Sales$375,000,000
Revenue ($)
Revenue Market Share =
$937,500,000
Total Market Revenue ($)
(%)
Unit Revenue
Units Sold Market Revenue Market
(000s) Share (000s) Share
Iams 25.0 50% $375,000 40.0%
Pro Plan 10.0 20% $200,000 21.3%
A-One 7.5 15% $187,500 20.0%
Kirkland 5.0 10% $125,000 13.3%
Chien 2.5 5% $50,000 5.3%
Market 50.0 100% $937,500 100%
Total 17
 The market for Pet Food consists of five players:
Units Sold Revenue
(000s) (000s)
Iams 25.0 $375,000
Pro Plan 10.0 $200,000
A-One 7.5 $187,500
Kirkland 5.0 $125,000
Chien 2.5 $50,000
Market Total 50.0 $937,500

In the market for Pet Food, managers at A-One want to know

their firm’s market share relative to its largest competitor on
the basis of revenues and unit sales:
$187,500,000
Brand’s 7,500 Share
Market
Relative
Relative Market Share
Market Share
0.5
Relative Market Share = = 0.30
A-One
A-One (Units)
(Revenue) ($, #)
(I) $375,000,000
25,000 Market Share
Largest Competitor’s
($,#) 18
Brand Equity Index=Effective Market Share*Relative Price*Durability.
BEI=A*B*C
Tide sales originate from three Geographic segments.
A) 10% of sales are in Canada with a 60% share of the market, 80% of
sales are in the United States with a 75% share of the market, and 10% of
sales are in Mexico with a 40% share of the market.
B) The average price of tide in all 3 geographic segments is $5.00
compared to average of $4.00 for comparable brands.
C) 80% of all customers intend to repurchase Tide next year.
Calculate the Brand Equity Index (Moran) for Tide

Answer: Brand Equity Index=Effective Market Share*Relative

Price*Durability.
Effective Market Share= (10%*60%)+(80%*75%)+(10%*40%) =.7
Relative Price= Brand Price/Average Market Price
Relative Price= $5/$4 =1.25
Durability=80%
Brand Equity index= .7*1.25*.8 =.7
Market Penetration (%): Gives an idea regarding the relative size of the market to its
maximum size
Brand Penetration (%): Gives an idea regarding the brands relative size of the market
to its maximum size
- compares the number people who have made a purchase in the
category/bought the brand to the total focal population (e.g., Canada, segment size,
etc.)

Brand Development Index (BDI): For a specific group (e.g., a segment), how many in
the target group are buying our brand, versus our competitors?
Category Development Index (CDI): For a specific group (e.g., a segment), how many
people in the group are buying something from our category,
relative to total category sales?
- compares two ratios: brand/category sales relative
to the number of people in a group AND total brand/category
sales to total people in a group
Market Penetration (%)=Customers who purchased a product in the Category (#)
Total Population (#)

Example: In the last month 3 million households out of the 13.5 million Canadian households purchased laundry
detergent.

What is the market penetration for Laundry detergent this month?

Market Penetration (%)= 3.0 Million

13.5 Million

Market Penetration (%)=22.2%

Two issues with this metric:
 Not brand focused

 not based on total purchases of detergent.

Brand Penetration (%)=Customers who purchased the brand (#)
Total Population (#)

Example: In the last month 1,800,000 households out of the 13.5 million households purchased Tide Branded laundry
detergents.

What is the market penetration for Laundry detergent this month?

Brand Penetration (%)= 1,800,000

13,500,000

Brand Penetration (%)=13.33%

issue with this metric:
 not based on total purchases

of detergent.
Penetration Share (%): Gives a ratio of people who buy a brand relative
to people who buy from the category
- multiple ways of calculating, depending on information available
- similar to market share

1) Penetration Share (%) = Brand Penetration (%)

Market Penetration (%)
2) Penetration Share (%) = Customers who have Purchased the Brand(#)
Customers who have Purchased a Product in the Category
3) Penetration Share (%) = Market Share (%) _
[Heavy Usage Index * Share of Requirements]
1) Penetration Share (%) = Brand Penetration (%)
Market Penetration (%)
2) Penetration Share (%) = Customers who have Purchased the Brand (#)
Customers who have Purchased a Product in the Category (#)

Example: In the last month 3 million households out of the 13.5 million households purchased laundry detergent. In
the last month 1,800,000 households out of the 13.5 million households purchased Tide Branded laundry detergent.

1) Penetration Share (%) = 13.333%

22.222%
1) Penetration Share (%) = 60%
Or
2) Penetration Share (%) = Customers who have Purchased the Brand(#)
Customers who have Purchased a Product in the Category

2) Penetration Share (%) = 1,800,000/3,000,000 = 60%

Imagine we want to know how our restaurant is doing amongst Ryerson
students. We know that Ryerson has 38,000 undergrads, and that we typically
serve 500 students per week. Comparatively, we have 6,000 people visit a
restaurant in a week in general, and these people come from the 2 million people
who live in Toronto.

Brand Development Index (BDI) = [Brand Sales to Group (#,$) / Households in Group # ]
[Total Brand Sales (#,$) / Total Households # ]
BDI = [500 / 38,000]
[6,000 / 2,000,000]
BDI = 0.013
0.003
BDI = 4.33
C ategory Development Index (BDI) = [Category Sales to Group / Households in Group]
[Total Category Sales / Total Households ]

Index used to show how well a category performs in a given market segment , relative to its performance in the marke as a whole.

You want to understand how your Purex laundry brand is performing. After consulting your sales database, you note that you
sold 20,000 units in Toronto, and 12,400 units in Montreal. According to StatsCan, there are about 13 million households in
Canada,
2 million households in Toronto and 1.6 million households in Montreal. During the same period 800,000 units were sold
across Canada
Calculate the BDI for Toronto

Category Development Index ( BDI) = [Category Sales to Group / Households in Group]

[ Total Category Sales / Total Households ]

C ategory Development Index ( BDI) = [ 20,000 / 2,000,000]

[ 800,000/ 13,000,000]

=.01/.0615
=.1626
Share of Requirements (aka Share of Wallet): For people purchasing a
particular brand, what is the ratio between brand purchases and other category
purchases?
- compares brand purchases with total category purchases (either in # of
units or $
Share of Requirements (%) = Brand Purchases #
Total Category Purchase by Brand Buyers #
Sole Usage (%): Of the people buying products from our category, how many
are exclusively buying our brand?
- compares brand loyal purchases to total purchases by people who
bought the focal brand at least once
Heavy Usage Index: Relative to other consumers, do the people
buying our brand buy more or less often?
- compares average purchases for the focal brand to overall
average purchases within the category
- this is a multiplier that is also used to qualify other metrics
A winery, Monterey, wants to know if its customers tend to buy more or less wine than
the average wine consumer. They have a market share in Ontario of 12%, and a
penetration share of 60%. They sold 150,000 bottles last year, and know that the total
sales of wine for people who bought at least one bottle of Monterey was 450,000
bottles.
Heavy Usage Index (I) = Market Share %
(Penetration Share * Share of Requirements)

HUI = 12% _
(60% * Share of Requirements)

HUI = 0.12 _ Share of Requirements also known as Share

(0.60* 0.333) of Wallet
Share of Wallet (%) = Brand Purchases #
HUI = 0.12_ Total Cat. Sales by Brand Buyers
(0.2) Share of Wallet (%) = 150,000_
HUI = 0.6
450,000
Share of Wallet (%) = 33.3%