This presentation serves as the introduction as well as Part 2B (Market Shar) for the Marketing Metrics Training Series by a company called Marketing Matters. Marketing Matters is a marketing strategy consultancy based in KwaZulu Natal, South Africa. The training series is based on the book, "Marketing Metrics: 50+ Metrics Every Executive Should Master" by Farris, PW et al. You can contact us on (+2731) 764 3919 or visit our website - www.marketingmatters.co.za - for more contact details.

2. Marketing Metrics
Chapter 1:Introduction
Chapter 2: Market Share
Part II

3. Marketing Metrics
Chapter 2: Share of Hearts, Minds and Markets

4. Chapter 2
PART 2
2.5 Share of Requirements
2.6 Heavy Usage Index
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects
2.8 Customer Satisfaction and Willingness to Recommend
2.9 Willingness to Search

5. Introductory Chapter
Chapter 2
2.5 Share of Requirements – Definition and Purpose
PURPOSE
To understand the source of the market share in terms of
breadth and depth of consumer franchise, as well as the
extent of relative category usage (heavy users with larger
customers versus light users and smaller customers).
DEFINITION
A given brand’s share of purchases in its
category, measured solely amongst customers who have
already purchased that brand. Also know as Share of
Wallet.

6. Chapter 2
2.5 Share of Requirements (Share of Wallet)
Calculated solely among the buyers of a specific brand
Key measure of loyalty
Guide a firm’s decisions on whether to allocate resources
towards:
Expanding a category
Taking customers from competitors
Increase share of requirements amongst established
customers

7. Introductory Chapter
Chapter 2
2.5 Share of Requirements – Calculations
Unit Share of Requirements (%) = Brand Purchases / Total
Category Purchases by Brand Buyers
Revenue Share of Requirements (%) = Brand Purchases ($) /
Total Category Purchases by Brand Buyers ($)

8. Introductory Chapter
Chapter 2
2.5 Share of Requirements - Calculations (EXAMPLE)
In one month, the unit purchases of AloeHa brand sunscreen
came to 1,000,000 bottles. Among the households that bought
AloeHa, the total purchases of Sunscreen (category) came to
2,000,000 bottles:
Share of Requirements = AloeHa Purchases / Category
Purchases by AloeHa Customers
1,000,000 / 2,000,000 = 50% (share)

9. Introductory Chapter
Chapter 2
2.5 Share of Requirements – Calculations (Market Share)
Analysing the overall market share:
Market Share = Penetration Share x Share of Requirements x Heavy
Usage Index
Therefore Share of Requirements can be calculated indirectly by
decomposing market share:
Share of Requirements (%) =Market Share (%) / [Penetration Share (%)
x Heavy Usage Index (I)]

10. Introductory Chapter
Chapter 2
2.5 Share of Requirements – Data Sources, Complications
and Cautions
Double Jeopardy:
Marketers strive for a “niche” position that yields high market
share through a combination of low penetration and a high
share of requirements.
Difficult to achieve a high share of requirements without also
attaining a high penetration share.
It can be difficult for customers to maintain loyalty to brands
with low market share

11. Introductory Chapter
Chapter 2
2.5 Share of Requirements – Related Metrics and Concepts
Sole Usage - the fraction of a brand’s customers who use only the
brand in question
Sole Usage Percentage – the proportion of a brand’s customers
who only use that brand’s products and do not buy from competitors.
They are die hard, loyal customers.
Sole Usage (%) = Customers Who Only Buy the Brand in
Question / Total Brand Customers

12. Introductory Chapter
Chapter 2
2.5 Share of Requirements – Related Metrics and Concepts
Number of Brands Purchased – marketers consider the average
number of brands purchased by consumers of that brand versus the
average number purchased by all customers in that category.
Repeat Rate – The percentage of the brand’s customers in a given
period who are also brand customers in the subsequent period.
Repurchase Rate – The percentage of customers for a brand who
repurchase that brand on their next purchase occasion.

13. Introductory Chapter
Chapter 2
2.6 Heavy Usage Index – Definition
The ratio that compares the average consumption of products in a
category by customers of a given brand with an average
consumption of products in that category by all customers for the
category
The measure of the relative intensity of consumption.
Indicates how heavily the customers for a given brand use the
product category to which the brand belongs, compared with
the average customer for the category.

14. Introductory Chapter
Chapter 2
2.6 Heavy Usage Index – Purpose
To define and measure whether a firm’s consumers are “heavy
users”
When a brand’s index is greater than 1.0, this means that its
customers use the category to which it belongs more HEAVILY
than the average customer for that category.

15. Introductory Chapter
Chapter 2
2.6 Heavy Usage Index – Calculations
Heavy Usage Index (I) = Average Total Purchases in Category
by Brand Customers / Average Total Purchases in Category
by All Customers for That Category

16. Introductory Chapter
Chapter 2
2.6 Heavy Usage Index – Data Sources, Complications and
Cautions
Does not indicate how heavily customers use a specific
brand, but only how heavily they use the category.

17. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects
Features a range of questions that aim to shed light on
customer’s relationships with a product or brand.
“Who are the acceptors or rejecters of the product?”
“How do customers respond to a replay of advertising
content?”

18. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Purpose
To track trends in customer attitudes and behaviour.
Customers pass through a particular process in the Hierarchy of
Effects:
Lack of awareness
Purchase of the product
Brand loyalty
AAU Metrics are designed to track these stages of knowledge, beliefs
and behaviours and may also track “who uses the product?”

19. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Awareness and Knowledge
Awareness
the percentage of potential customers or consumers who
recognize a given brand.
Top of Mind
the first brand that comes to mind when a customer is asked
an unprompted question about a category.

20. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Awareness and Knowledge
Ad Awareness
the percentage of target customers or accounts who
demonstrate awareness of a brand’s advertising.
Brand/Product Knowledge
the percentage of surveyed customers who demonstrate
specific knowledge or beliefs about a brand or product.

21. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Attitudes
Combination of what customers believe and how strongly they
feel about it.
Attitudes/Liking/Image
A rating assigned by consumers (normally 1-5) when survey
respondents are asked their level of agreement with
propositions such as – “This is a young brand”

22. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Attitudes
Perceived Value for Money
A rating assigned by consumers (scale of 1-5) when survey
respondents are asked their level of agreement with
propositions such as – “This brand usually represents good
value for money”
Perceived Quality/Esteem
A consumer rating (scale of 1-5) of a given brand’s product
when compared with others in its category or market.

23. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Attitudes
Relative Perceived Quality
A consumer rating (scale of 1-5) of a brand product
compared to others in the category/market.
Intentions
A measure of customer’s stated willingness to behave in a
certain way.
Questions such as – “Would you be willing to switch brands
if your favourite is not available?”

24. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Attitudes
Intention to Purchase
A specific measure or rating of customer’s stated purchase
intentions.
Information on this subject is gathered from the responses
to surveys with propositions such as – “It is very likely that I
will purchase this product”.

25. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Usage
USAGE
a measure of customer’s self reported behaviour.
Purchase frequency and units per purchase.
Seek to determine how many have “rejected the brand” and
how many have “adopted” the brand into a regular portfolio of
brands.

26. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Data Sources, Complications and
Cautions
Data Sources Include:
Warranty Cards and Registrations – using prices and
random draws to encourage participation
Regular Administered Surveys – conducted by organizations
that interview consumers via telephone, mail, web and other
technologies.

27. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Data Sources, Complications and
Cautions
DATA COLLECTION
Certain techniques in data collection and review can help
managers distinguish between seasonality effects such as:
“noise” – random movement
“signal” – actual trends and patterns

28. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Data Sources, Complications and
Cautions
The following techniques are used:
Adjust for periodic changes
Try to separate customer from non-customer responses
Triangulate customer survey data
Separate leading from lagging indicators

29. Introductory Chapter
Chapter 2
2.7 Awareness, Attitudes and Usage (AAU): Metrics of the
Hierarchy of Effects – Related Metrics and Concepts
Likeability
Q Score rating of likeability:
Derived from a general survey of selected households in
which a large panel of consumers share their feelings
about brands
Segmentation by Geography or Geo-clustering
Insight into customer attitudes can be achieved by
separating data into smaller, more homogeneous groups of
customers.

30. Introductory Chapter
Chapter 2
2. 8 Customer Satisfaction and Willingness to Recommend
Customer Satisfaction
Focus employees on the importance of fulfilling customer’s
expectations – when these expectations aren’t fulfilled, they warn
of problems that can affect sales and profitability.
Measured at the individual level but reported at an aggregate
level.
Willingness to recommend
When a customer is satisfied with a product, he or she might
recommend it to friends, relatives and colleagues – powerful
marketing advantage.

31. Introductory Chapter
Chapter 2
2.8 Customer Satisfaction and Willingness to Recommend -
Purpose
Customer satisfaction provides a leading indicator of consumer
purchase intentions and loyalty.
The principal use is twofold:
It is important to tend to customers and ensure they have a
positive experience with the company’s goods and services.
Expectations are a key factor in satisfaction.
Market share may show the current performance of a firm.
Satisfaction is the best indicator of how likely it is that the firm’s
customers will make further purchases in the future.

32. Introductory Chapter
Chapter 2
2.8 Customer Satisfaction and Willingness to Recommend
– Data Sources, Complications and Cautions
DATA SOURCES
Surveys constitute the most frequently used means of
collecting satisfaction data.

33. Introductory Chapter
Chapter 2
2.8 Customer Satisfaction and Willingness to Recommend
– Data Sources, Complications and Cautions
COMPLICATIONS
“Response bias”
Disappointed or angry customers often welcome a means to
vent their opinions and satisfied customers do not.
Sample selections may distort satisfaction ratings in other ways
as well.

34. Introductory Chapter
Chapter 2
2.8 Customer Satisfaction and Willingness to Recommend
– Data Sources, Complications and Cautions
CAUTION
Must be careful when defining customer satisfaction as
“meeting or exceeding expectations” as expectations may
change over time.

35. Introductory Chapter
Chapter 2
2.8 Customer Satisfaction and Willingness to Recommend
– Related Metrics and Concepts
Trade Satisfaction
founded upon the same principles as consumer satisfaction
and it measures the attitudes of trade customers.
Number of Complaints
The number of complaints lodged by customers in a given
time period.

36. Introductory Chapter
Chapter 2
2.9 Willingness to Search – Definition
The likelihood that customers will settle for a second-choice
product if their first choice is not available
The percentage of customers who are willing to leave a store
without a product if their favourite brand is unavailable.
[Also known as “accept no substitutes”]

37. Introductory Chapter
Chapter 2
2.9 Willingness to Search – Purpose
To assess the commitment of a firm’s or brand’s customer base.
Brand or company loyalty is a key marketing asset.
Marketers must evaluate aspects of it through a number of
metrics
re-purchase rate
share of requirements,
willingness to pay a price premium
and other AAU measures

38. Introductory Chapter
Chapter 2
2.9 Willingness to Search
Tells a company about the attitudes of its customers and
whether its position in the market is likely to be defensible
against sustained pressure from a competitor.
Willingness to Search (%) = Percentage of Customers who
Delay Purchases, Change Stores or Reduce Purchase
Quantities in order to Avoid Switching Brands

39. Introductory Chapter
Chapter 2
2.9 Willingness to Search
Customer Loyalty is grounded in a number of factors
Satisfied and influential customers who are willing to
recommend.
Hidden values or emotional benefits which are effectively
communicated.
A strong image for the product, the user or the usage
experience.

40. Introductory Chapter
Chapter 2
2.9 Willingness to Search – Data Sources, Complications
and Cautions
Consumers who are loyal to a brand in the sense of rarely
switching may or may not be willing to pay a price premium OR
recommend it to friends.
Different products generate different levels of loyalty – must
look for category specific norms.

41. Introductory Chapter
Chapter 2
2.9 Willingness to Search – Data Sources, Complications
and Cautions
Degrees of loyalty also differ with demographic groups. Older
consumers have been shown to demonstrate the highest loyalty
rates.
Customer loyalty remains one of the most important metrics to
monitor as well as one of the trickiest to assess truly.
Marketers must understand the worth of their brand in the eyes
of the customer and retailer.

42. Introductory Chapter
Chapter 2
END OF
CHAPTER 2:
PART 2