TUTORIAL WORKSHOP 4

This study was commissioned by the Chief Marketing Officer (CMO) of Aldi Australia to understand its market position and performance
relative to its competitors and to identify opportunities for growth as part of a review of Aldi’s marketing strategy. As a marketing analyst,
you have been assigned the task of analysing the data and developing recommendations to the CMO.
Aldi is one of the leading supermarket chains in Australia operating over 570 retail stores. With the increasingly intensive competition,
Aldi is working on a major restructuring plan to increase its market share.
Your tasks:
1. Compute and compare the market shares of the three brands.
2. Decompose the market share and compare between the three brands.
3. Based on the decomposition, identify the strengths and weakness of Aldi.

In this workshop you will learn how to:

 Functions: =COUNT, =IF, =COUNTIF, =AVERAGE;

 Extract insight from information.

From the Tutorial folder under Module 4, locate the files Tut4 data.xlsx and save the file as you would normally do to retrieve later.

1) From what you’ve learned in previous tutorials, improve the readability and data formatting of the worksheet:
a) Format the table headers
b) Format the data appropriately
c) Name the sheet (e.g. Sales data)

2) Prepare your sales data for analysis: You need four new columns to the right of your dataset

a) A Total Spend column, which will simply be the sum of each customer’s spend across the three retailers.
b) Three new columns (one for each retail brand) where will calculate the total spend on groceries by each customer of a retailer.
c) Format appropriately as you go.

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d) Calculate the total spend for each customer in Column E. (i.e. In E:3, Use a simple =SUM of Coles, Woolworths and Aldi data and
copy down for each customer).

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 e) For the purposes of later analysis, we need to show the TOTAL grocery spend by each customer of a retailer for each brand. That
is, for customers who have purchased at a retailer at least once, how much did they spend on groceries overall? Since we have
some conditions to meet, an =IF function is appropriate.

Go to cell F:3 and enter the following formula: =IF(B3>0,E3,0). Try translating the formula into a sentence. For example, IF Cust
ID #1 purchased groceries at Coles (i.e. the $value under Coles (B:3) is greater that zero) THEN return the $value of the Total
spend that appears in E:3, ELSE return a $zero value. Copy your formula down to all customer records.

Enter formula and copy down

Repeat for Woolworths and Aldi noting that you can either enter the formula from scratch for Customer 1 and copy down, OR
you could make use of an absolute cell reference and copy across and down. [Tip: Remember the concept of absolute and
relative cell addresses? You can lock just a column or row.]

3) Compute the metrics required for market decomposition analysis: To do this we’ll create a new table to the right of the existing
dataset. Insert and format the column and row titles as indicated below:
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a) Enter Retailer sales simply using =SUM for each store’s Household spend – Groceries.
b) Compute Total sales of retailers combined.
c) Calculate Total customers using =COUNT(CustID column).
d) With Total sales and Total customers calculated you can calculate Average usage with a simple mathematical formula, but let’s
introduce the =AVERAGE function to find the average of ‘usage’ which is the average of Total Spend: =AVERAGE(E3:E324)

e) Calculate (Revenue) Market share for each retailer using the formula below as a guide to one decimal place [Can you copy your
formula across? Tip: Don’t forget to format!]

f) Calculate Nº customers for each retailer. How should we define a “customer” from the data?
=COUNTIF(B3:B324,">0"). [Can you copy your formula across?]

g) Calculate Penetration for each retailer using the formula below as a guide:
Market penetration captures the
reach of the category into the
market; Brand penetration
measures the brand’s popularity
within its category
h) Brand spend: What result do we already have that reflects Brand spend?

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 i) Calculate the Total spend by retailer customer using =SUM for each retailer.

j) Calculate the (Revenue) Share of Wallet (SoW) for each retailer using the formula below as a guide:
SoW at the individual consumer
level is widely used as measure of
loyalty.

SoW is the market share of a brand

among its customers/buyers

k) Calculate Usage for each brand of retailer as Total spend / Nºcustomers, which equates to the average total purchases in the
category by customers of the brand.

Usage measures the average

l) Calculate HUI for each retailer using the formula below as a guide, formatting the result to two decimal places: consumption (purchase/use) of a
brand over a time period.

A Usage Index, or Heavy Usage

Index (HUI) measures relative
intensity of consumption, i.e. how
heavily customers of a brand
m) Calculate Brand market share using the formula below as a guide: use/purchase the category of the
brand compared with the average
customer of the category.
𝑀𝑎𝑟𝑘𝑒𝑡 𝑆ℎ𝑎𝑟𝑒 = 𝑃𝑒𝑛𝑒𝑡𝑟𝑎𝑡𝑖𝑜𝑛 𝑠ℎ𝑎𝑟𝑒 ∗ 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝑊𝑎𝑙𝑙𝑒𝑡 ∗ 𝐻𝑒𝑎𝑣𝑦 𝑢𝑠𝑎𝑔𝑒 𝑖𝑛𝑑𝑒𝑥

Your results should match the screenshot below (including formatting!):

4) Answer the tutorial workshop questions in the space below your data in the Market Analysis tab.
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TUTORIAL WORKSHOP 4 QUESTIONS

1) Analyse the market position of Aldi relative to its competitors.

2) Identify the drivers of Aldi’s performance relative to its competitors.
3) Analyse the findings and identify opportunities for increasing Aldi’s market share.
[Hint: Look carefully at the decomposed market share metrics. If penetration is low(er), we need new customers; If SOW is low(er) we
need to better market to existing customers; If HUI is low(er), how can we target heavy users to improve?

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Appendix: Key Excel functions
=IF functions
 IF functions are a must-know and are one of the most popular in Excel. IF functions apply a logical test to return one value if the
test meets a specified condition (i.e. is true), and another value if it does not (i.e, false).
 IF the value in cell address meets some condition, i.e. is ‘true’, (e.g. = > <) return this value (which could be a number or some
text), otherwise if it does not meet the condition, i.e. is ‘false’, then return some other value.
 For example:
 =IF(B3>0,E3,0) translates to:
If the value in cell reference B3 is greater than zero, then return the value in cell E3, otherwise return a zero value.
 There are several functions in the IF family. Each involve a logical test(s) and the same/similar principles apply. Explore COUNTIF,
SUMIF, AVERAGEIF, IFS.

=COUNT functions
 COUNT functions do just that: They count the contents of a range of cells. The content of cells may be either numbers or text.
The COUNT family include COUNTA, which counts the number of cells in a range that are not empty.

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