Share of Hearts, Minds and Markets Group 1

Rahul Goyal Apoorva Jain Nimish Puranmlka Varun Malhotra Shivam Lakhanpal Rohit Kothari Kartikeya Negi

Market share

Purpose

Market Share

Key indicator of market competitiveness Frequently drives strategic/ tactical action

% of market accounted for specific entity

Data parameters must be clearly defined Time period will affect results and accuracy Served Market:- Portion of the total market for which firm competes

Unit Market share = Unit Sales/ Total Market Unit Sales Revenue market share= Sales Revenue / Total Market sales revenue

Relative Market share and Concentration

Relative Market Share= Brands Market Share($,#)/ Largest competitors market share ($,#) Useful in comparing firms or brands relative positions across different markets and evaluating degree of competitiveness in these markets Matrix finds importance in BCG Matrix

Market Concentration is the measures of degree to which comparatively small number of firms account for large proportion of market Three (four) firm concentration Ratio is sum total of market share held by leading three (four) competitor in market

Brand Development Index

Quantifies brands performance within specific group of customers compared with average performance among all consumers

Purpose:- Useful for understanding specific customer segments relative to market as a whole

Category Development Index

Quantifies sales performance of category of goods and services within a specific group of customers compared with average performance among all consumers

Category development in Retail operations:-

Penetration

Penetration is a measure of brand or category popularity. It is defined as the number of people who buy a specific brand or a category of goods at least once in a given period, divided by the size of the relevant market population.

Two key measures of a products popularity are penetration rate and penetration share.
The penetration rate is the percentage of the relevant population that has purchased a given brand or category at least once in the time period under study. A brands penetration share is determined by comparing that brands customer population to the number of customers for its category in the relevant market as a whole. Market Share (%) = Penetration Share (%) * Share of Requirements (%)* Heavy Usage Index (I) Time period has a significant effect on penetration rate but not so much on penetration share.

Share of Requirement

Also called Share of Wallet Key to measure Loyalty

Buyers of Specific Brand % Purchases within relevant category

In a given month, the unit purchases of Pepsi (Cola) brand ran 1,000,000 bottles averaging Rs. 20,000,000. Among the households that bought Pepsi, total purchases of cola came to 2,000,000 bottles averaging Rs. 30,000,000

Market Share

Expansion

Unit Share of Requirement

Rev Share of Requirements

SOR Estb Customer

Allocate Resources

SOR -A given brands share of purchases in its category, measured solely among customers who have already purchased that brand

 Sole Usage : The fraction of a brands customers who use only the brand in question Sole Usage Percentage : The proportion of a brands customers who use only that brands products and do not buy from competitors Repeat Rate : The percentage of brand customers in a given period who are also brand customers in the subsequent period (CALENDER TIME) Repurchase Rate : The percentage of customers for a brand who repurchase that brand on their next purchase occasion. (CUSTOMER TIME) Loyalty : average number of brands purchased by consumers of that Brand brand Brand A ALow 2 7 versus the average number purchased by all customers in that category
Penetration

High Market Share

Dog Food

Brand B -5

Brand B Customers

Brand B 5

Brand C -3

Brand C 0

Double Jeopardy

15 Purchases by 10 Customers 7 Purchases by 5 Customers 1.5 Brands per Customer 1.4 Brands per Customer

Heavy Usage Index

Also Called Weight Index Measure of Relative Intensity of Consumption\ Yields insights into Source of Volume & Nature of Brands Customer Base

HUI : The ratio that compares the average consumption of products in a category by customers of a given brand with the average consumption of products in that category by all customers for the category The heavy usage index does not indicate how heavily customers use a specific brand,

Awareness Attitude & Usage

Awareness: The percentage of potential customers or consumers who recognizeor name a given brand. Top of Mind: The first brand that comes to mind when a customer is asked an unprompted question about a category. The percentage of customers for whom a given brand is top of mind can be measured Ad Awareness: The percentage of target consumers or accounts who demonstrate awareness (aided or unaided) of a brands advertising. Brand/Product Knowledge: The percentage of surveyed customers who demonstrate specific knowledge or beliefs about a brand or product Attitudes/Liking/Image: A rating assigned by consumers (scale of 15)when survey respondents are asked their level of agreement with such propositions as, This is a brand for people like me, Q-Score Rating of Likeability : A Q Score is derived from a general survey of selected households, in which a large panel of consumers share their feelings about brands, celebrities, and television shows Intentions : A measure of customers stated willingness to behave in a certain way. Purchase Intentions : A specific measure/rating of consumers stated purchase intentions. Usage : A measure of customers self-reported behavior

Customer Satisfaction & Willingness to Recommend

Customer Satisfaction: The number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals. Willingness to Recommend: The percentage of surveyed customers who indicate that they would recommend a brand to friends

Trade Satisfaction : Founded upon the same principles as consumer satisfaction, trade satisfaction measures the attitudes of trade customers. Number of Complaints : The number of complaints lodged by customers in a given time period

Net Promoter
Purpose: To measure how well the brand or company is succeeding in creating satisfied, loyal customers.

Net promoter is a measure of the degree to which current customers will recommend a product, service, or company. Net Promoter Score (I) = Percentage of Promoters (%) Percentage of Detractors (%) Ten-point scale on how likely customers are to recommend the company or brand.

Promoters: Customers who are willing to recommend the company to others (rating of 9 or 10). Passives: Satisfied but unenthusiastic customers (ratings of 7 or 8). Detractors: Customers who are unwilling to recommend the company to others (ratings of 0 to 6).

NPS Precautions

The same NPS score can indicate different business circumstances. Eg: a Net Promoter Score of zero can indicate highly polarized customers, or a totally ambivalent customer base. This score in specific circumstances can generate results that could mislead a manager who is not being careful. Eg: A new competitor steals detractors of a company with NPS, they cease to be customers of the company and the NPS increases. Results should be interpreted in light of other data, such as sales trends.

Willingness to Search
Purpose: To assess the commitment of a firms or a brands customer base

Willingness to Search (%) = Percentage of Customers Willing to Delay Purchases, Change Stores, or Reduce Purchase Quantities to Avoid Switching Brands

Tells company about the attitudes of its customers and whether its position in the market is likely to be defensible against sustained pressure from a competitor When a brand enjoys loyalty at this level, its provider can generate powerful leverage in trade negotiations Such loyalty will also give providers time to respond to a competitive threat

Factors affecting Loyalty

Loyalty is grounded in a number of factors: Satisfied and influential customers who are willing to recommend the brand. Hidden values or emotional benefits, which are effectively communicated. A strong image for the product, the user, or the usage experience. Purchase-based loyalty metrics are also affected by whether a product is broadly and conveniently available for purchase, and whether customers enjoy other options in its category.

Consumers who are loyal to a brand in the sense of rarely switching may or may not be willing to pay a price premium for that brand or recommend it to their friends.
Behavioral loyalty may also be difficult to distinguish from inertia or habit. Different products generate different levels of loyalty.

Degrees of loyalty also differ between demographic groups.

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