Analytical Marketing Report

3,757
-1

Published on

Exploratory Factor Analysis detergent industry perceptual map

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
3,757
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
298
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Analytical Marketing Report

  1. 1. Henko Brand Positioning in Detergent Industry Factor Analysis Approach Analytical Marketing Under guidance of Prof. Srinivas Prakhya Prepared by: Dharmesh Gandhi Alok Shukla Kaveri Ingale Kumar Ashutosh Venkata Phani Prasad Chavali Apurva Pushpen Thanawala
  2. 2. Contents 1 Introduction...........................................................................................................................................3 2 Approach ...............................................................................................................................................3 3 Qualitative Analysis ...............................................................................................................................4 4 Analysis for detergent brands ...............................................................................................................7 4.1 Two Factor Solution: .................................................................................................................................... 9 4.1.1 No rotation ............................................................................................................................................11 4.1.2 Varimax rotation....................................................................................................................................12 4.1.3 Promax rotation (allow the factors to be correlated) ...........................................................................13 4.2 Three Factor Solution: ...............................................................................................................................14 4.2.1 No rotation ............................................................................................................................................15 4.2.2 Varimax rotation....................................................................................................................................16 4.2.3 Promax rotation.....................................................................................................................................19 5 Analysis with Surf Excel, Ariel and Henko ...........................................................................................22 5.1 Two Factor Solution: ..................................................................................................................................24 5.2 Three Factor Solution: ...............................................................................................................................25 5.2.1 No rotation ............................................................................................................................................26 5.2.2 Varimax rotation....................................................................................................................................27 5.2.3 Promax rotation.....................................................................................................................................28 6 Recommendation and Conclusions.....................................................................................................31 Indian Institute of Management, Bangalore 2|Page
  3. 3. 1 Introduction The case we have taken here is of the detergent industry. The motive was to select a brand that has not been doing well and do a repositioning exercise. From the newspapers sources, we found that approximately share for the HUL’s ‘Surf Excel’ is 14%, P&G’s Ariel is 3% and Henkel’s Henko is 1%. Considering the fact that Henkel is operating in India since early 90s, and still has not make any significant progress in terms market share, we selected this brand for repositioning. The idea is to find out the core factors driving the consumer choice. The approach was to do a dip stick survey to find out the observable attributes that are important to the consumer (decision maker). From this we try to find the unobservable latent factors that are driving these attributes. Then we map the chosen brands on these factors to get a perceptual map. We also reduce the consideration set to just the competing brands of Henko to see if the results make more sense. This perceptual map is then used to get an insight of where these different brands figure in the minds of the consumer. Hopefully, then it can become very clear where Henko is going wrong and an approach to correct that can be figured out. 2 Approach Firstly, we do a qualitative analysis to get a feel of the situation on the ground. To do that we analyze the advertisements for the different brands in the industry and try to understand what the brand managers are trying to portray and what is the positioning stance taken by the different brands. To be able to figure out the factors, we needed to have data at our disposal which would quantify the various perceptions of different users of detergents. To design our survey attributes, we first went ahead with a dip stick survey to understand the various factors that are considered by a consumer while buying his/her choice of detergent powder. The factors thus distilled out of the dip-stick survey were as follows. • Wash Quality • Price • Fragrance • Packaging • Appropriateness for washing machine • Brand Recall Indian Institute of Management, Bangalore 3|Page
  4. 4. • Gentle on Hands We gave equal weight age to these attributes. Probably, the weight ages of these attributes would be different in a consumer’s mind. However, we shall start with this and see whether the results are intuitive enough. Once these variables were decided, the next task was to define the questionnaire. The idea of the end result of the survey was to be able to create a perception map of the brands in question and figure where Henko figures among those. To meet the goal we decided to pick up well known brands (along with Henko) to figure in our questionnaire. The brands thus picked up were – Surf Excel, Ariel, Rin and Nirma. Sample set of questions (that were put for each of these brands) is as follows. • How would you rate the "wash quality" of Surf Excel? • How do you rate the fragrance of Surf Excel? • How attractive is the packaging of Surf Excel? • Do you think Surf Excel is appropriate for a washing machine? • Do you think that Surf Excel is gentle on your hands? • How do you rate the brand recall of Surf Excel? The survey was a web survey and was floated to decision makers mainly in the IT segment. We got around 80 responses which we used for the analysis. 3 Qualitative Analysis Brand Positioning and Imagery – as conveyed through the advertisements Brand S.No. Proposition/Positioning Advertising Imagery* Name Specific emphasis on school kids .Mothers now have the freedom to Stain Removal, Less Water, let their kids experience life without Special offering for Washing worrying about stains. An 1 Surf Excel Machine, Extra Bright Clothes. association with colour BLUE to Middle and premium segment. imply a whitening characteristic, though the new offerings have white color detergent. Indian Institute of Management, Bangalore 4|Page
  5. 5. Middle class woman going to a bank "Best clean with less effort", For to send money order to his old heavty duty laundry. Mass 2 Wheel father. Clear focus on savings. market consumers. Economy brand. Empowerment of Lower & medium-price segment. women. Typical rainy season problems Whiteness, Value proposition associated with wearing white when offering some smaller clothes. Humorous ad. "White ho to packs at Rs. 11/- motivating Tide ho” is a nice way to rhyme the intention to buy aspect, reaching 3 Tide word and make it easy to recall. both lower & upper class Trying to create transaction utility by segment consumers through crossing out 43 and promoting the these introductory packings. price as Rs. 23/- . Significantly above For mid-priced segment the JND. Celebrity(Juhi Chawla) used along with a person in a doctor's apprin - Stain Removal, Oxygen power, shining WHITE. Use of oxygen Kills germs. washing machine baloon to attract attention. Trying to 4 Henko portay country of origin (Germany) Middle and premium segment. to highlight quality, but not stated that explicitly. Boring informational ad. Whiteness benefit. Lime and College going guy and housewife indigo ingredient. Mass market emphasizing on whiteness of clothes 5 Mr White consumers. Monotonous, Boring ad with not Lower & medium-price segment. much audio video for quick recall. The flash of light is synonymous with the brand Rin The characters used in Whiteness, Superior cleaning. 6 Rin a regular day to day environment so Lower price segment that people can relate with them, middle class environment Indian Institute of Management, Bangalore 5|Page
  6. 6. Stain removal, fragrance, washing Technology focus. Packaging with 7 Ariel machine. Medium and premium celebrity – Zaheer khan. No audio segment. oxygen-oxyblue, oxyrich video repetition, jingle etc. "Washing powder Nirma" a popular jingle etched in consumer's mind. Whiteness. Lower price Dancing girl imagery. Same audio / 8 Nirma segment.No special benefits of visual identity since many years. the powder mentioned. Good brand recall. "sabki pasand nirma"- mass market appeal. Indian Institute of Management, Bangalore 6|Page
  7. 7. 4 Analysis for detergent brands The analysis of the detergent survey data is done for finding the factors and their loading. We started with two factor analysis on the given set of data. The brands in consideration are Surf Excel, Henko, Rin, Ariel and Nirma. The scree plot indicates the fact that most of the variance is explained by the first factor. Indian Institute of Management, Bangalore 7|Page
  8. 8. Correlation Matrix Washing Gentle Wash Machine on Brand Quality Fragrance Packaging Appropriateness hands Recall Price Correlation Wash Quality 1 0.708 0.631 0.693 0.589 0.595 0.526 Fragrance 0.708 1 0.672 0.681 0.612 0.481 0.506 Packaging 0.631 0.672 1 0.631 0.521 0.497 0.497 Washing 0.693 0.681 0.631 1 0.591 0.467 0.651 Machine Appropriateness Gentle on 0.589 0.612 0.521 0.591 1 0.427 0.445 hands Brand Recall 0.595 0.481 0.497 0.467 0.427 1 0.335 Price 0.526 0.506 0.497 0.651 0.445 0.335 1 There is a significant amount of correlation across the factors underscoring the usefulness of factor analysis. (They have to be correlated if they are representing the same underlying set of latent variables). Determinant=.02 => there is no singularity in the data. KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure .908 of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square 1549.372 df 21 Sig. .000 KMO value of 0.908 indicates suitability of factor analysis. Bartlett’s test is also significant. Indian Institute of Management, Bangalore 8|Page
  9. 9. 4.1 Two Factor Solution: Communalities Extraction Wash Quality .739 Fragrance .689 Packaging .586 Washing Machine .793 Appropriateness Gentle on hands .491 Brand Recall .445 Price .544 Extraction Method: Maximum Likelihood. However if we see the communalities matrix, the “Gentle on hands” and “Brand Recall” attributes have less than 50% of their variance explained. Even “price” and “packaging” have very less variance explained by the 2 factors. Hence we might need to move onto 3 factors because of this significant data loss. Indian Institute of Management, Bangalore 9|Page
  10. 10. Total Variance Explained Extraction Sums of Squared Loadings Factor Total % of Variance Cumulative % 1 4.023 57.478 57.478 2 .264 3.772 61.250 Extraction Method: Maximum Likelihood. In fact the second factor explains only 3.772% of the variance. Indian Institute of Management, Bangalore 10 | P a g e
  11. 11. 4.1.1 No rotation The factor loadings for two factor analysis shows that the first factor describes all the variables and the second factor does not give any specific information about the loadings of the attributes. Factor 1 Factor 2 Wash Quality .842 .171 Fragrance .823 .107 Packaging .761 .085 Washing Machine Appropriateness .862 -.223 Gentle on hands .699 .056 Brand Recall .609 .273 Price .675 -.298 2 Factor No Rotation Indian Institute of Management, Bangalore 11 | P a g e
  12. 12. 4.1.2 Varimax rotation Factor 1 Factor 2 Wash Quality .729 .455 Fragrance .671 .488 Packaging .610 .462 Washing Machine Appropriateness .473 .755 Gentle on hands .545 .440 Brand Recall .630 .221 Price .285 .681 2 Factor Varimax Rotation Varimax rotation provides two factors which explain two choices. First factor explains the brand, wash quality, packaging etc. The second factor explains washing machine appropriateness and price. Total Variance Explained Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Factor Total % of Variance Cumulative % Total % of Variance Cumulative % 1 4.023 57.478 57.478 2.353 33.620 33.620 2 .264 3.772 61.250 1.934 27.630 61.250 Here, the variance is distributed across the 2 factors in a much more even manner and a perceptual map makes more sense here. Indian Institute of Management, Bangalore 12 | P a g e
  13. 13. 4.1.3 Promax rotation (allow the factors to be correlated) Pattern Matrix Factor 1 Factor 2 Wash Quality .752 .128 Fragrance .638 .223 Packaging .567 .230 Washing Machine Appropriateness .129 .783 Gentle on hands .485 .248 Brand Recall .784 -.151 Price -.099 .816 2 Factor Promax Rotation Factor Correlation Matrix Factor 1 2 1 1.000 .811 2 .811 1.000 Here you can see that the factors are highly correlated • As discussed earlier, a 3-Factor solution might be more appropriate Indian Institute of Management, Bangalore 13 | P a g e
  14. 14. 4.2 Three Factor Solution: Objective: We further tried to go for three factor solution to see if it provides additional information on the detergent attributes. Communalities Extraction Wash Quality .708 Fragrance .867 Packaging .580 Washing Machine .805 Appropriateness Gentle on hands .485 Brand Recall .707 Price .534 The communalities show a better result compared to the 2 factor solution. However the “Gentle on Hands” is still not adequately explained. Extraction Sums of Squared Loadings Total % of Variance Cumulative % 4.056 57.945 57.945 .366 5.234 63.179 .262 3.742 66.921 Indian Institute of Management, Bangalore 14 | P a g e
  15. 15. The 3 factor solution explains around 5% more variance than the 2 factor solution and the communalities also suggest a better explanation of the attributes. 4.2.1 No rotation The factor loadings for three factor analysis for all the five products shows that the first factor describes all the variables and the second & third factor does not give a lot of information about the loadings of attributes. Factor 1 Factor 2 Factor 3 Wash Quality .831 .130 .012 Fragrance .882 -.165 -.248 Packaging .761 .023 -.014 Washing Machine .842 -.083 .300 Appropriateness Gentle on hands .696 -.014 .009 Brand Recall .631 .552 -.061 Price .647 -.098 .325 Three Factor Analysis with No Rotation Indian Institute of Management, Bangalore 15 | P a g e
  16. 16. 4.2.2 Varimax rotation Factor 1 Factor 2 Factor 3 Wash Quality .481 .488 .488 Fragrance .380 .805 .273 Packaging .443 .500 .364 Washing Machine Appropriateness .756 .395 .279 Gentle on hands .430 .458 .300 Brand Recall .208 .235 .780 Price .661 .257 .175 Three Factor Analysis with Varimax Rotation 4.2.2.1 Perceptual Map – Three factor Varimax Rotation Factor-1: Price, Washing machine appropriateness Factor-2: Wash Quality, Packaging, Gentle to hand Factor-3: Brand Recall Three-factor perceptual map has been broken into three two-dimensional perceptual map for better understanding. The three maps are drawn against three factor solutions achieved in the previous section. Basic Features Washing Machine Appropriateness (Premium-ness) Indian Institute of Management, Bangalore 16 | P a g e
  17. 17. The first perceptual map shows that Henko is placed poorly with factor 2, which means wash quality and packaging is not so good. Also it is not perceived as gentle to hand. It scores positive on the washing machine appropriateness and price, but again it scores low with respect to other brands. Brand Recall Washing Machine Appropriateness (Premium-ness) Henko is having a very poor brand recall; in fact it is having the lowest brand recall in the five brands studied. Surf scores the highest and Nirma is the only other brand which is having negative score in brand recall. <Please explain further> Brand Recall Basic Features This perceptual map shows brand positions with respect to Factor-2 and Factor-3. Henko is very poorly placed if these two factors are considered. Indian Institute of Management, Bangalore 17 | P a g e
  18. 18. Total Variance Explained Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Factor Total % of Variance Cumulative % Total % of Variance Cumulative % 1 4.056 57.945 57.945 1.810 25.856 25.856 2 .366 5.234 63.179 1.622 23.169 49.024 3 .262 3.742 66.921 1.253 17.897 66.921 Extraction Method: Maximum Likelihood. The rotation spreads the variance across these factors which might make the perceptual map more relevant. Indian Institute of Management, Bangalore 18 | P a g e
  19. 19. 4.2.3 Promax rotation Factor Correlation Matrix Factor 1 2 3 1 1.000 .818 .681 2 .818 1.000 .730 3 .681 .730 1.000 • There is a high degree of correlation amongst these factors as expected. The significant factors have been highlighted. Factor 1 Factor 2 Factor 3 Wash Quality .269 .337 .318 Fragrance -.059 1.046 -.095 Packaging .235 .435 .151 Washing Machine .837 .085 -.016 Appropriateness Gentle on hands .264 .396 .084 Brand Recall -.070 -.051 .922 Price .817 -.051 -.070 Three Factor Analysis with Promax Rotation • The 3 factor promax solution has the cleanest output. • The factor 1 is the clearly the washing machine appropriateness factor which commands a premium in the market probably because of the target segment differentiation. Indian Institute of Management, Bangalore 19 | P a g e
  20. 20. Factor-1: Washing Machine Appropriateness (and/or price) (Premium-ness) Factor-2: Fragrance Factor-3: Brand Recall 4.2.3.1 Perceptual Map- Three factor promax rotation The axes are shown orthogonal just for the sake of representation Indian Institute of Management, Bangalore 20 | P a g e
  21. 21. The analysis till now has been over the five brands that have been assumed to constitute the industry. However, Henko effectively competes only with Surf Excel and Ariel. So it might make sense to only look at the data for Surf Excel, Henko and Ariel. Indian Institute of Management, Bangalore 21 | P a g e
  22. 22. 5 Analysis with Surf Excel, Ariel and Henko Correlation Matrix Washing Gentle Wash Machine on Brand Quality Fragrance Packaging Appropriateness hands Recall Price Wash Quality 1 0.653 0.623 0.666 0.578 0.753 0.511 Fragrance 0.653 1 0.618 0.608 0.535 0.547 0.343 Packaging 0.623 0.618 1 0.603 0.459 0.69 0.504 Washing 0.666 0.608 0.603 1 0.492 0.631 0.483 Machine Appropriateness Gentle on hands 0.578 0.535 0.459 0.492 1 0.523 0.235 Brand Recall 0.753 0.547 0.69 0.631 0.523 1 0.544 Price 0.511 0.343 0.504 0.483 0.235 0.544 1 There is a significant amount of correlation across the factors underscoring the usefulness of factor analysis. (They have to be correlated if they are representing the same underlying set of latent variables). Indian Institute of Management, Bangalore 22 | P a g e
  23. 23. As was the case with the all-brands case, most of the variance can be explained by one factor itself. KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure .891 of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square 936.039 df 21 Sig. .000 KMO value of 0.891 indicates suitability of factor analysis. Bartlett’s test is also significant. Indian Institute of Management, Bangalore 23 | P a g e
  24. 24. 5.1 Two Factor Solution: Communalities Extraction Wash Quality .737 Fragrance .881 Packaging .610 Washing Machine .583 Appropriateness Gentle on hands .402 Brand Recall .804 Price .390 As can be seen in the communalities output, the “Gentle on Hands” and “Price” attributes are not explained significantly Extraction Sums of Squared Loadings Factor Total % of Variance Cumulative % 1 3.964 56.629 56.629 2 .441 6.305 62.934 The 2 factors explain around 63% of the variance which is about the same as when compared with the all brands case. The factor loadings for two factor analysis shows that the first factor describes all the variables and the second factor does not give any specific information about the loadings of the attributes. Indian Institute of Management, Bangalore 24 | P a g e
  25. 25. Factor 1 Factor 2 Wash Quality .842 .168 Fragrance .854 -.390 Packaging .771 .124 Washing Machine Appropriateness .758 .094 Gentle on hands .633 .001 Brand Recall .814 .376 Price .543 .309 2 Factor No Rotation So looking at the above scenario, it makes sense to look at the 3 factor solution. 5.2 Three Factor Solution: Objective: We further tried to go for three factor solution to see if it provides additional information on the detergent attributes. Communalities Extraction Wash Quality .755 Fragrance .999 Packaging .624 Washing Machine .583 Appropriateness Gentle on hands .549 Brand Recall .776 Price .514 All the variables have more than 50% of their variance explained which can be termed satisfactory. Indian Institute of Management, Bangalore 25 | P a g e
  26. 26. 5.2.1 No rotation The factor loadings for three factor analysis shows that the first factor is strongly loaded with most of the variables but mostly with fragrance, wash quality and packaging. The second factor is strongly loaded with brand recall , wash quality and price. The 3rd factor has relatively weaker factor loadings. Factor 1 Factor 2 Factor 3 Wash Quality .656 .560 .101 Fragrance .999 -.005 .000 Packaging .621 .472 -.124 Washing Machine .611 .458 -.013 Appropriateness Gentle on hands .537 .337 .383 Brand Recall .551 .687 .003 Price .346 .537 -.324 Three Factor Analysis with No Rotation So this makes a strong case for rotating the solution and getting a cleaner solution that is more intuitive. Indian Institute of Management, Bangalore 26 | P a g e
  27. 27. 5.2.2 Varimax rotation Factor 1 Factor 2 Factor 3 Wash Quality .552 .582 .333 Fragrance .267 .355 .895 Packaging .605 .346 .373 Washing Machine .527 .425 .353 Appropriateness Gentle on hands .186 .660 .280 Brand Recall .679 .525 .201 Price .695 .117 .130 Three Factor Analysis with Varimax Rotation In contrast with the all brands case, the washing machine appropriateness is not that strong an attribute in driving the factor loadings. Factor-1: Price, brand recall, packaging Factor-2: Gentle on hands, brand recall, wash quality Factor-3: Fragrance Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Factor Total % of Variance Cumulative % Total % of Variance Cumulative % 1 2.900 41.430 41.430 1.998 28.540 28.540 2 1.622 23.172 64.602 1.491 21.294 49.834 3 .278 3.968 68.570 1.312 18.736 68.570 Around 6% more variance is explained by a 3 factor solution compared to a 2 factor solution. The variance is much more “equitably distributed” Indian Institute of Management, Bangalore 27 | P a g e
  28. 28. 5.2.3 Promax rotation Pattern Matrix The significant factors have been highlighted. Factor 1 Factor 2 Factor 3 Wash Quality .351 .519 .058 Fragrance -.028 .030 .995 Packaging .589 .062 .207 Washing Machine .420 .254 .163 Appropriateness Gentle on hands -.244 .895 .036 Brand Recall .607 .409 -.127 Price .935 -.270 -.041 Three Factor Analysis with Promax Rotation As can be seen from the above factor loadings, the promax gives the cleanest solution which is expected given the extent of correlation amongst the factors. Factor Correlation Matrix Factor 1 2 3 1 1.000 .798 .628 2 .798 1.000 .722 3 .628 .722 1.000 Factor-1: Price, brand recall Factor-2: Gentle on hands, wash quality Factor-3: Fragrance Indian Institute of Management, Bangalore 28 | P a g e
  29. 29. Indian Institute of Management, Bangalore 29 | P a g e
  30. 30. 5.2.3.1 Perceptual Map- Three factor promax rotation The axes are shown orthogonal just for the sake of representation Indian Institute of Management, Bangalore 30 | P a g e
  31. 31. 6 Recommendation and Conclusions It is very clear where Henko is lagging. It does not have the brand strength to compete with either Surf Excel or Ariel in its category. It is interesting to note that as soon as we remove the brands Nirma and Rin, the washing machine appropriateness as a driving factor is no longer there. Probably, that is what defines this particular segment. So, the obvious thing as expected would be to build its brand through better advertising, marketing reach and channel reach to reach its target segment. Indian Institute of Management, Bangalore 31 | P a g e

×