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Shivangi-CH-4 PRODUCT AND PORTFOLIO MANAGEMENT-Marketing Metrics (1.…
Shivangi-CH-4 PRODUCT AND PORTFOLIO MANAGEMENT-Marketing Metrics
1. VOLUME PROJECTION
REPEAT VOLUME
Number of buyers repetitively buying the product.
Construction
Fields
Trial Population
Repeat Rate
Complications
The volume is an estimation and calculation of real figure is complex with changing period.
PENETRATION
Total volume of goods sold in a given time frame.
Construction
Fields
Trial Population
Repeat Volume
Penetration (t-1)
Complications
The length of the period will affect norms ( In a year there will be more buyers than in a month).
TRIAL RATE
First-time users as a percentage of the target population
Fields
*Percentage of definite and probable users
Awareness %
Distribution %
Total population
Construction
Complications
Distinguish between ever-tried from new tries in current period
PROJECTION OF SALES
Volume to be sold in the given future time frame.
Construction
Fields
Penetration
Average frequency of Purchase
Average units per Purchase
Complications
Adjust trial and repeat rates for a time frame.
Dealing with uncertainty is difficult.
OBJECTIVE
To predict the market demand of a product.
Optimizing the inventory roll-out.
To evaluate the trend and product life cycle of the product.
2. GROWTH RATES
YEAR-ON-YEAR GROWTH
Percentage change in revenue from one year to the next.
Fields
Sales revenue of the current period.
sales revenue of the previous period.
Complications
Account for factors as stores, salespeople, or product for expansion into new market.
Construction
Objective
Plan production and budgeting.
Making short term investment decision.
COMPOUND ANNUAL GROWTH RATE
Percentage change in revenue over a period of time.
Construction
Fields
Sales of the latest year.
Sales of the base year.
Number of years
Complications
Account for factors as stores, salespeople, or product for expansion into new market.
Objective
Impact of long term plans on the business.
Comparing performance with competitors.
3. COMPETITION
CANNIBALIZATION EFFECT
A market phenomenon where sales of one product is achieved at the expense of some of a firm's other product.
Construction
Fields
Sales lost from existing product
Sales of new product
Objective
Analyzing the overall change in contribution.
Determine the volume projection on the product line.
FAIR SHARE DRAW
Assumption that new entrants in the market capture sales from established competitors in proportion to established market shares
Objective
Analyse the impact of competing brands and new competitor on company's sales.
Construction
Complications
Not a significant assumption in case of difference among competing brands.
4. BRAND EQUITY
Monetary value assigned to a brand which is the excess value of tangible and measurable assets of the firm.
Construction
Fields
Effective market share.
Relative price
Durability/ Loyalty share
Objective
To evaluate the resale value of the brand.
To understand the power of the brand over the other.
Aids in pricing and promotion.
Complications
Composite mix of all the metrics so it is difficult to evaluate accurately.
5. CONJOINT ANALYSIS
SEGMENT UTILITIES
Clustering of individuals into the market segments on the basis of sum-of-squares distance between regression coefficients drawn from conjoint analysis.
Fields
Utilities scores at each individual level.
Distance between each pair.
Objective
Uses customer valuations of a product attributes to help define market segment.
Complications
Assumption of homogeneity within the segments.
Affected by factors like number, type and level of attributes.
VOLUME PROJECTION
Used within conjoint simulation to estimate volume.
Objective
Forecast sales for alternative products, designs, prices and branding strategies
Complications
Assumes awareness and distribution levels are known
CONJOINT UTILITIES
Regression coefficients for attribute levels derived from conjoint analysis.
Construction
Fields
Partworth of all attributes
Level of all attributes.
Objective
Indicate the relative values that customers place on attributes of which product offerings are composed.
Complications
Affected by factors like number, type and level of attributes.
TRIAL, REPEAT AND VOLUME PROJECTION
Kelloggs Special K shows high interest to the customers in the first one year but the Normal flakes brand shows consistent repetitive sales and has long term sustainable growth.
Kelloggs Special K produces a positive contribution and brings a new segment market of health conscious women.
The market share lost is in proportion with the market portfolio before the introduction of Special K.
C1 and C3 share similar liking trends with respect to taste, health and readiness to eat therefore can be clubbed as one segment
CONJOINT UTILITIES
Attributes of Health and Price are relatively rated.
Highest desirability (1.6) lies with price of 120 and health quotient being High.
Customers least prefer the pack with low health quotient and Price of 225.
Special K sales line shows a positive trend as compared to the normal flakes brand.
For long term decision and investment, the normal brand has a fruitful market than Special K.
