Buyer & Consumer Behavior
Measuring & Interpreting Brand Performance
Buyer & Consumer Behavior
Kit Kat is one of the most known chocolate products in the world and its red pack is well recognized among others. It was first introduced in 1935 and still is one of the favorite brands among public. In the beginning it was owned by a Rowntree, UK based confectionary company and today it is owned by Nestle. In the following report will be discussed and analyzed brand performance. Report is broken into three parts. In the beginning, we will analyze Brand performance comparing measurement variables to other competitor brand. The second section will contains information and analyze of brand awareness and salience. In the end we are going to discuss demographics and segmentation.
In the report given below, we saw, marketing director wanted all advertisement to be focused on heavy buyers but this is wrong approach. Heavy buyers have very changing nature and they are not attracted easily. Second important thing that we mentioned was that, despite the fact of brilliant brand awareness brand salience was pretty law. We learned what brand salience is and now we know that this is the main factor influencing sales. First and major goal of our new marketing strategy in rising brand performance should be increasing salience metrics. Then in our report we were analyzing the data related to sales distribution according to demographic factors. We concluded that the main audience of this product was couples, to be more exact these were housewives, who were purchasing chocolate for their children. Above we already discussed that for this audience we need special advertisements, which will clearly explain them, that this chocolate is very good for their children, from the point of view of health, it is also nutritious and tasty. If all the remarks will be implemented in future marketing and brand development strategy, sales and customer loyalty will be increased as well as salience.
Section 1: Brand Performance
1. On this table is provided data for measuring brand performance. This data can be used in Dirichlet Model of measuring brand performance, which is aimed to provide probable density of product purchases if we have some competitors in the given product range. Mostly all needed figure are calculated and we can analyze them. Among the figures given on this table we can observe some similarities between some competitive products, however differences also exist. If we focus on the market share and sole loyalty relation we can see that there is positive relation between these two determinants. The same relation is observed when we look on the penetration column and Sole loyalty. This relation can be explained by the fact, that when company is entering market with new product, starting to penetrate it, advertises its product everywhere and brand awareness grows. The product is getting loyal customers who tend to buy it regularly. Then we can observe average purchasing frequency which is not so smoothly correlated with market share and market penetration, however the relation exists despite the fact that, difference between Mars Bar and Kit Kat market share is almost 30% but average purchase frequency is the same.
Share of category requirements is the determinant that gives us market share of this product among the buyers of the given category of products and as we see Kit Kat is on the second place, this value is related to market share. Probably the reason that category purchasing rate is negatively related to the market share is that this category of products is mostly targeted on higher income population or heavy buyers. Most of the companies are making accent on attracting exactly this category of customers, but the problem is that this segment is very heterogeneous in their tastes and prefers to test something new all the time. They will probably be influences by all advertisements about these products which have higher market share and even become loyal, but still continue buying different products in the same category as well. The fact that category buying rate is not bound to the other values can caused by different brand salience which is not shown on this table.
2.Kit Kat is operating repertoire market. We can support this assumption by the fact that these products are in the category that is not in the list of essential or every day usage product for most consumers. Buyers of this category are making decision which brand to buy every time when they go to the store. By this fact we can explain difference in category buying rate. Probably consumers loyal to Kit Kat brand, want to buy something new on the market and buying, for example Nestle Gold, which has lower market share. If this product would act in subscription market I would expect more straight relation between performance metric figures and less sensibility to price.
3. If the marketing director tells to focus on segment of heavy buyers I would not agree with him/her because heavy buyer segment is very unstable and unpredictable. Despite the fact that they are purchasing a lot we cannot get stabile sales plan if we will be focused on them. Light buyers are more predictable and they represent the biggest part of population. It is much easier to control them and predict their purchases. The other argument for focusing on light buyers is that This category of product generally is not bought in very large quantities by households so if we assume that 20% is heavy buyers and 80% light buyers and heavy buyers are buying and consuming two times more, even then the purchases of light buyers will be two times more.
Section 2: Awareness & Salience
4.Before starting discussion about importance of building brand salience we have to define what this term means and what the difference between salience and brand’s top of mind awareness is. Brand salience represents degree of mentioning or thinking about the product when the consumer is already in buying situation. This term is different from top of mind difference, mainly because, top of mind awareness is just knowing something about brand and when somebody is asked about chocolate, for example, he tells which chocolate brand was first that he had on mind. However when we are talking about the situation when consumer is already at the shelf of the store in front of the given category of products and chooses the product, brand salience will lead him to purchase the product. So, bigger is brand salience bigger is amount of sales, especially among the products of repertoire market because customer has to make choice every time he goes to shop.
5.In given table we have metrics for salience and brand awareness for given five brands of the same category of goods. From visual analyze of this data we can conclude that top mind awareness and overall brand awareness are not correlated with the salience of this brands. We can observe the fact that, brand with the smallest figure of brand awareness has the highest value of salience among all given brands. There might be many reasons for this, one of the reasons could be incorrect advertisement campaign, maybe advertisements of other products were targeted to wrong audience, or maybe etiquette of the product was eye catching. The reason can be lack of marketing researches of the area where company wanted to sell product. They could spend huge amounts of money in advertising campaigns for raising brand awareness, but the other smaller company instead of this, could find out based on research of the taste of regional potential buyers that they like green color and pack products in green boxes. So the other company could raise salience instead of rising brand awareness and gain bigger sales volume.
It is also very important to examine the values of salience separately for users of the product. By comparing numbers of salience of whole sample and salience of users only we can determine the change in it after beginning of consuming this product. When we will find out the growth rate, by this figure we can conclude level of satisfaction of users with this product and level of gained loyalty.
6.Brand salience can be built and enhanced by researching the target audience. Company has to find out, what are the needs and expectation from this product. For example, let’s assume that Kit Kat is a candy which is bought mainly for children by housewives. What are they expecting from the candy that is for their children? It should be nutritious, tasty and good for health. Then the advertisement of the product should be written exactly this, no matter latently or directly but when potential customer will see this product, these words should come to mind. Now we can offer some cues that could be implemented in the advertisement of the chocolate brand.
Healthy – If the main category of buyers consists of mothers, buying chocolate for children, than this product should be advertised as healthy product for children and their maternal instinct won’t let them pass by.
Nutritious – This cue is important in advertisement because often suck kind of product is bought by people just for having fast snack.
Energetic – It is good cue for persuading people buy the product, especially for students. Recent researches have proved that teenagers tend to buy more products that give energizing effect.
Tasty – Generally people buy chocolate for its taste, because they love chocolate, so advertisement should contain information describing excellent quality and taste of chocolate in this product.
Antidepressant – chocolate is widely recognized as good antidepressant and this should be emphasized.
Sweet – some people like sweet chocolate so it should be mentioned that the company provides best quality sweetest chocolate.
Bitter or milky – this are also types of chocolate people like so company should have it in range of products and tell this in advertisements.
Break – eating chocolate should be associated in advertisement as having a rest from any work and having good time.
Fun – Actually this cue can be used differently in advertisements but it should exist because everyone loves to have fun and no matter what product we are selling if we tell people that it will bring them some portion of fun they will buy it more. This fact was statistically proved.
Section 3: Demographics & Segmentation
7.In the tables given below, we can see demographic segmentation of customers by relationship status, total household income and gender.
Let’s first discuss the data distribution according to relationship status of the buyers. It’s observed that most of the customers of chocolate product are couples. We can suppose that most of these couples are married and more than half of them have children. So, most of these products are bought for children by their parent and they should be main customers to whom our products should be targeted.
On the second table we see customers segmented by income distribution. Main customers for Kit Kat are people with income more than 70 000 dollars. This figure proves the assumption mentioned in the beginning of the report, telling that, Kit Kat was targeted to heavy buyers. Such targeting was mistake from the beginning, because heavy buyers have extremely changing nature and their actions can be barely predicted.
In the last table we see sales distribution by gender of customers. Most of customers are female and this proves the previous fact, assuming that mostly chocolate is bought by housewives.
8. Based on given data, we can suppose that the reason of law sales of Kit Kat in the region was poor research of target segments and badly targeted advertisement. Now we are already able to determine whom we need to sell this product and what are the needs and expectations of our target audience and develop new strategy.
In conclusion to the full analyze of given data, we can determine some mistakes and plan new marketing strategy for increasing brand performance. If Marketing department will follow the advices given in the text it will have good impact on brand name and company sales.
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