Metrics-Set 2 Share of Hearts, Minds, Markets

METRICS- SET 2
SHARE OF HEARTS, MINDS, MARKETS

1. Revenue Market Share:
---”MOST IMPORTANT METRIC”
--sales revenue as percentage of market sales revenue
--channel level, before/after discounts, time period, geographic
areas, customers
---Purpose:1. “Benchmarking”
2. Converting Sales Targets to Market Share
---”Grow the market”, or “snatch” from competition
---which “level” of management monitors this?
--- “Falling mkt share” is an indicator of..( bad marketing strategy)
-- “Market Definition”– Pepsi as an example, insurance
as example
-- “Time period”– Promotions- Right Indicator??(Signal

To Noise Ratio)
--- Above also true for geography, channels, customers
---”served market”– important for calculation( example)

2. Unit Market Share:
-- unit sales as percentage of market unit sales
---”Benchmarking”
--- Can “revnue mkt share”, and “unit mkt share”, be
different?
3. Relative Market share:

-- Our Brand mkt share/ Largest competitor mkt share
---For companies vying for the “top”
Related Metrics:
Market Concentration:
--- Degree to which a small number of firms, account for a large portion of the
market
---also called “concentration ratio”
-- calculated usually for the “top 3” firms in the market
--- “3-firm concentration ratio”--- sum of market shares of top 3 firms
Herfindahl Index:
--- is a “ market concentration metric”
--- =( sum of squares of individual market shares of all players in the market)
Problem: Following is the units sold, and the revenue, for a car market.
Calculate
1. Unit Market Share
2. Revenue Market share; Relative mkt share
3. 3-firm concentration ratio
4. Herfindahl Index
Units sold(in 000) Revenue( in pounds)

A 25 3,75,000
B 10 2,00,000
C 7.5 1,87,500
D 5 1,25,000
E 2.5 50,000
4. Brand Development Index:
-- To measure performance in paticular

“SEGMENT”
-- identify “strong”, “weak” segments
= brand sales per person in 1 segment/ average
sales per person in the entire market
- “Consumer behaviour in 1 particular segment”
- Problem:
- Oats is a minor brand of breakfast cereal.
- Among households, without children, its sales
are 1 packet, per week, for 100 households.
- In the general population, its sales run 1
packet per week, per 80 households. Calculate
BDI.
- --BDI>1, <1,=1
5. CDI( Category Development Index)
-- how well a category performs, within a given
SEGMENT, relative to its performance in the
market as a whole
---eg: A product like ice-cream has higher per-
capita consumption in A.P, compared to U.P
--- What if CDI is high for a region, but BDI is
less?
6. Penetration:
-- can be for “brand” or “category”
-- is a measure of “popularity”
=(number of purchasers of a brand/category ATLEAST
once)/ ( size of total population)
Related Metrics:
Number of Active Customers:
--”atleast once” purchased in time period t
Sole Usage:
--%= (customers who buy ONLY that brand/ total
brand purchasers)
--”loyal customers”
--- may not have access to competitor products
Share of Requirements/ Wallet share:
--(brand purchases/ total category purchases)
--- metric for “loyalty”
Retention metrics:
Repurchase Rate:
-- repeat purchasers in next “purchase occasion”
-- “retention rate”( 1- churn rate)

• Heavy Usage Index:
-- how “heavily”, do customers use the product
--compares “brand” sales, versus category to which brand
belongs
-- also called “weight index”
1,=1,<1
Eg: The average shampoo purchases of “sunflower” brand
shampoo, in 1 year is 6, while average shampoo consumption
by households, using any brand of shampoo, is 4 bottles.
Calculate HUI..
AAU metrics:(awareness, atitude, usage)
--heirarchy of effects
--study of “consumer behaviour”
Eg: cust’s “willingness to recommend”,
“intention to purchase”( understand “WHY”)
--- is the customer prompted to purchase bcoz
of category/ brand/ advertising/ situation?
• Awareness question:
“ Have you recently seen/heard any advt for school
buses being environmentally conscious or green?”.
• Atitude Question: (belief/intention/liking/image):
• “On a scale of 1 to 5, is Brand X for young people?”
• Usage Question: “Did you use Brand X this week?”
---’perceived value of money”( measure it on a scale
of 1 to 5)
--”percieved quality/ esteem” and “relative
percieved quality”
---’usage”->units per purchase, frequency( when and
where purchased)( gives idea about “penetration”)
--usage( “tried”/ “rejected”/ “adopted” a brand)
---separate “consumer” from “customer” in survey
• Difference between “paid” and “unpaid”
respondent
”geo-clustering”( segmentation by geography)
--”customer satisfaction” mesurement and its
repurcursions( very dis-satisfied to v.satisfied)
--”neither satisfied nor dis-satisfied”– rating 3
--”satisfaction” and retention- what is value of r?
--”willingness to recommend” metric and its marketing
advantage
--”incentivise” to get survey responses
---”expectation and satisfaction”– a 5-star hotel vs a small
motel-- VFM?
---”response bias”( example: responses from dis-
satisfied customers)
--- Dis-satisfied customers have already left !!
--- “number of complaints”, as a metric
--”expectations” may have risen, but product is
good
Willingness to search(%):
-- percentage of customers willing to DELAY purchases, CHANGE
STORES” or REDUCE purchases to avoid SWITCHING BRANDS
--question in survey for “brand loyalty”( Willingness to pay

premium, re-purchase rate,)
--loyalty and “negotiations”
--- loyalty and time to respond to “competition threat”

determinants of loyalty(satisfaction, emotional
beliefs, strong image)
--- “type of product” and “loyalty”
---’innertia’ and loyalty
---loyalty vs Age of consumer

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METRICS- SET 2

SHARE OF HEARTS, MINDS, MARKETS

-- “Time period”– Promotions- Right Indicator??(Signal

--- Above also true for geography, channels, customers

---”served market”– important for calculation( example)

3. Relative Market share:

Units sold(in 000) Revenue( in pounds)

-- To measure performance in paticular

-- “retention rate”( 1- churn rate)

--question in survey for “brand loyalty”( Willingness to pay

--loyalty and “negotiations”

--- loyalty and time to respond to “competition threat”

--- “type of product” and “loyalty”

---’innertia’ and loyalty

---loyalty vs Age of consumer

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