Your target goal is to achieve a market share of X (whether it be 15, 25, 35% or more) by Y-time. Beyond receiving a share report from a custom or syndicated data source do you know if you’ll achieve the target goal? This is a difficult question that gets to the heart of your understanding of what drives the business and explains the performance of your brand and, importantly, your ability to manage it effectively. Once you’ve identified the key data points you need to find a way to collect the data and display it on a brand performance dashboard.
This is the first in a two-part series. Part II will be available in two weeks.
Causal & Lead Indicators – A Case History
Back in the early days at the start of our marketing careers at Procter & Gamble (P&G), circa the early 1970’s, we junior marketers were expected (no, it was demanded of us) that we analyze the Nielsen reported market share and provide a thoughtful explanation of our brand’s performance. Nothing got written in 24-hours at P&G that was sent up the line to senior management (i.e., beyond the Division President to Company Executive V.P.) given the numerous rewrites we were forced to endure in training us “how” to think and assure our analysis was “technically correct and consistent with the findings.” We started with the findings then drew our conclusion(s), which had to be consistent with those unassailable facts and only then moved onto to recommend specific indicated actions to achieve our target goals for market share and sales.
How were we ever going to ensure our report was received by senior management within the 24-hour window? Simple. We wrote our report and had it reviewed, and rewritten time and again under the direction of our Brand Manager, before we received Nielsen reported data. How’s that possible? We tracked “causal factors” that impacted market share and were available to us prior to Nielsen reporting category and brand sales and market share results. In addition to our weekly sales numbers we focused on the most significant influencer of market share for our brand, retail merchandising.
More specifically, we tracked feature activity. (This is the ads in the retailers’ circulars that promote the brand.) We carefully tracked and analyzed the “quality” of the feature ads. This included what chains promoted us (as each represented varying share of all consumer grocery volume), where in the circular the ad was placed, the size (or prominence) of the feature and, importantly, the feature price. The deeper the feature price, the larger and better placement of the ad. This resulted in the added retailer support of massive end-aisle displays. If you generated more than your fair share of quality merchandising then sales and market share would rise. The correlation was solid.
So, based on “lead indicator” merchandising support we were able to draft and rewrite our report to senior management before the Nielsen data was received. While we couldn’t state the exact level of increase or decrease in market share we could report the direction it would follow – up, down or stable. The precise numbers were then imported following the release of the Nielsen data. This along with any consumer promotion activity, and analysis of competitive activity, provided us with what we needed to know about the achievement of the the target goal for any given Nielsen bi-monthly reporting period before that data was tabulated and released.
More on Causal Factors – Another Case History
Back in 1977, now at Johnson & Johnson, I launched the REACH Toothbrush. The emerging brand had been in a controlled store-test (20-stores) in both Chicago and Milwaukee, initiated by the DuPont Corporation, the developer of the REACH Toothbrush. We acquired REACH Toothbrush from DuPont and then took it nationally, from the two controlled store-test markets, in less than 20-weeks.
The Director of Marketing Research suggested we purchase and use a forecasting model developed by MIT whizzes (a forerunner to models such as the once broadly used BASES) to assist us in developing a realistic forecast. As I had already developed a forecast for the Brand I passed on the suggestion. Why would I need to purchase a forecasting model? However, the Director felt so passionately about this that he agreed to pay for 50% of the cost. Okay, game on! If he so believed in this model it would have been poor leadership not to support him in his effort to help support me in successfully introducing the brand.
The use of the model produced the same results as my forecast. Why should that not be surprising? Well, I was able to provide them with the accurate inputs (gleaned from marketing research) that are relevant to developing a Year I sales forecast the model makers requested. Specifically, this included: a realistic distribution level; anticipated consumer awareness; % conversion of awareness to purchasing; transaction size (per purchase); repeat purchase levels following initial usage; and purchasing frequency (in months). Each of these coupled with pipeline-fill tallied to our Year I forecast.
Creating A Brand Performance Dashboard
The Brand Performance Dashboard captures those SMART (Specific, Measurable, Achievable, Relevant and Timebound) causal factors that impact sales and market share. They’re pretty similar from one sector (e.g., consumer, pharmaceutical and medical devices) to another, although they may be labeled differently, and have been touched upon in the preceding case histories. Here are two of them:
- Availability – In consumer product land this is “retail distribution.” In pharmaceutical categories this is “access.” In medical devices it is availability in either HCP offices (e.g., ophthalmologists), hospitals or clinics. The fact of the matter is you can’t sell from empty shelves or get a prescription filled if the brand doesn’t have access through Payors. Nor can the surgeon implant or use a product that s/he has not purchased, been trained to use or is not available in the operating theatre.
There is also “quality of availability” to account for in assessing availability. For CPG (consumer package goods) this is about number of skews at retail, along with number of package facings, quantity of merchandise and shelf location (easy or difficult for shopper to see or reach). As per access is the drug made readily available or does the patient need to fail on other drugs before the patient can receive your drug? And, for medical devices (MD&D for Medical Devices and Diagnostics) is the product exclusive or are there multiple competitive options available? Does it require training and if so has the surgeon been adequately trained?
Availability is rather easy to ascertain. It includes purchasing syndicated or custom data, field checks (such as store checks at the retail environment, CP offices, hospitals and clinics). It also includes whether the drug is available on a formulary. And, there is also sales force reports.
The more difficult task is determining what availability is needed, and when, in order to meet the target goals that follow, which lead to sales and market share targets.
- Awareness – If target-customers aren’t aware of your brand then you are not in their consideration set (also referred to as “evoked set”). Like availability there is a quality aspect to awareness. There is “aided awareness” where your brand name is presented and target-customers acknowledge whether they are aware of it. Then there is “unaided awareness,” which is also referred to as “top of mind” awareness. Obviously, top of mind awareness is the better quality of awareness as it may reflect being in the forefront of the prospective customer’s consideration set. This is the case regardless of whether we are referring to CPG, pharma or MD&D.
The level of awareness is a function of media levels, mediums used, reach & frequency of messaging, feet on the street, position of messaging (e.g., first position makes a huge difference in quality as second and third positions get short shrift if any attention at all), memorability of messaging (including factors such as relevant, meaningful differentiated messaging and brand linkage) and targeting (to prospective customers who believe what we believe – our Brand Idea, and employing the Pareto Principle where we acknowledge and target the 20% of the population who will represent about 80% of the volume). Certainly, availability will influence awareness too!
We measure the level and quality of awareness through surveys. There is a relationship between awareness and purchase, use and prescribing behavior. This relationship depends upon the quality of awareness, the “Whole Product” offering and compelling nature of the messaging (both strategic and execution). This relationship needs to be determined in order to ascertain the level of awareness needed to achieve specific behaviors that translate to sales (i.e., conversion rate).
Pulling together and using a Brand Performance Dashboard will help you manage success. We’ll be sharing Part II covering the remaining causal factors and indicators on 25 June. Regardless of whether you are using a dashboard or not, you may find helpful suggestions to improve the likelihood of achieving your target sales and market share goal.
Until then, best wishes for marketing success,
Richard Czerniawski and Mike Maloney