Market Dashboard

Video  Market Dashboard.

Market Dashboard is specially configured for reviewing market trends. The report enables you to gauge the size of the market, its growth rate, and the performance of retailers, manufacturers, brands, channels and segments. It covers information on sales volume, sales value and price, across all channels and chains, and across all segments. The dashboard is ideal for examining the impact of marketing activities on the market as a whole, and across channels, banners and segments.

The data shown in the video is for the Hygenia category. The tabs and the spin buttons at the top of the page, pertain to selections for dashboard, metric, segment, channel and category.

The chart on the right depicts the share for big brands and the one on the left pertains to the remaining brands.

As is the case with all the dashboards, the market dashboard is a collection of tables, and each table is a collection of views.

The data can be viewed across the 5 different channels and chains, including total trade. It can also view across the 5 different segments. So there are 25 tables for each trade/segment combination, and since the tables can be viewed in volume or value, there are 50 views per category, each providing a different perspective of the market share data. You normally tend to view only a few of these perspectives.

Share in Segment and Segment Contribution

Depending on the information you are seeking or the business issue you are studying, you need to examine the data in different ways. For instance, at times you are interested in the market as a whole, and at other times you want to zoom into a particular market breakdown (MBD) such as a chain or a particular segment. If you are interested in your brand’s performance in a segment or chain, you should examine the brand’s share in that market breakdown. On the other hand, if you want to know the importance of the segment or chain, examine its contribution. Contribution relates not only to your brand’s share in the MBD, but also to the size of the MBD.

For instance, a Hygenia brand may have relatively high share in the Hedonist segment, and because the segment is by far the biggest segment, its contribution to the brand’s sales is likely to be huge.

Table 2.2   Sales volume (for illustration only) of selected Hygenia brands, across consumer segments.

For a better understanding of the difference between market share and segment contribution, consider Table 2.2. Based on the data in this table, it may be concluded that Iris is relatively strong in the Hedonist segment, and that the segment is contributing 62.5% to the brand’s total sales:

• Iris’ market share is 20% in the total market and 25% in the Hedonist segment.
• The Hedonist segment’s contribution to Iris’ sales is 62.5%.
• The Hedonist segment’s contribution to Hygenia sales is 50%.

Share in Trade and Trade Contribution

Table 2.3    Sales volume of selected Hygenia brands, across chains and lower trade.

Table 2.3 displays the break-up of sales across chains and the lower trade. This data tell us that:

• Iris’ market share is 20% (total Joka market).
• Iris’ market share in Fujimart is 25%.
• Fujimart’s contribution to Iris’ sales is 30%.
• Fujimart’s contribution to Hygenia sales is 24%.

One may drill deeper into the data, for instance, segment share within chain. If the Iris brand manager is interested in determining what proportion of Iris sales in Fujimart are to the Hedonists, she should select ‘Fujimart’ from the Trade Channel tab at the top, of the dashboard.

If however, she is interested in information pertaining to shopper segments (price conscious, quality conscious, convenience seekers and experimenters), she can obtain the required information from the trade dashboard.

This dashboard also provides information on price, weighted across the 13 weeks of the quarter. This is essentially sales value divided by sales volume.

Trade Dashboard

Video  Trade Dashboard.

Trade Dashboard provides for a detailed review of the performance of the retail chains and the lower trade. The information provided includes:

• Sales volume and sales value contribution across retail chains and channels, and across shopper segment.
• Store count.
• Store maintenance.
• Facings.

The 3 charts at the top sum up the performance of Fujimart, Inulas and the Lower Trade.

The chart at the left pertains to trade contribution. For the category as a whole, the chart in the video tells us that for Q4, 33.5% of the sales of Hygenia are through Fujimart, 28.3% from Inulas and the remainder from the Lower Trade. Fujimart is bigger than Inulas, and it is particularly strong among quality conscious shoppers, as can be seen once you select ‘quality conscious’ from the segments drop down list.

The charts in the middle and right pertain to Price and Promotion, two of the factors that contribute to the trends in trade contribution. The average price of Hygenia products is significantly higher in Inulas, and promotional activity in the chain, is a substantially higher, peaking in Q3 and Q4.

Purchase Dashboard

Video/Table 2.4  Purchase Dashboard: Schisandra — Purchases, Sales and Stocks.

Purchase Dashboard provides information across brands on sales volume, purchases, stocks and out of stock days. This information is required by retailers for making purchasing decisions, and it is required by manufacturers for determining how much to produce.

Relationship between Opening Stock, Closing Stock and Purchases

The two column charts at the top left and middle pertain to brand purchases, opening stock, sales and closing stock. With reference to Table 2.4, for the brand Schisandra at Inulas, notice that in Q4, the purchase volume (32.6) + opening stock (5.6) is equal to the sales volume (29.8) + closing stock (8.4) in the next chart. (Sales = Purchases + Opening Stock − Closing Stock. Refer MarketingMind).

Purchasing Decisions

Details provided in the table in this dashboard are required by retailers for making purchasing decisions. Manufacturers too need this information so that they can produce adequate quantities to cater to retailer purchases.

Note that for Q2 (Table 2.4), Inulas purchased 29.5 thousand units of Schisandra and sold 29.6 thousand units. The closing stock of 100 in Q1 is the opening stock for Q2.

The purchased quantity and the opening stock was entirely sold out, leaving no closing stock in Q2. Importantly too, the chain experienced 4 days of stock outs. Since each quarter is a little over 90 days, the chain was out of stock for about 4.4% of the time.

One may conclude that Inulas lost the opportunity to sell more Schisandra because it did not purchase adequate quantities.

The information on sales trend, closing stock and the stock out days suggests that Inulas should be purchasing more units in the next quarter, because the demand in Q2 was higher than what was available for sale. Moreover, to minimize the likelihood of a stock out, the chain should be maintaining adequate stock levels.

Depending on the shoppers’ loyalty to the brand, persistent stock outs could compel shoppers to switch stores. This will impair the retailer’s performance not only for the brand and the category, but also for the other categories stocked by the retailer.

Maintaining too much excess stock is also detrimental. In part because inventory holding cost is 2%. Importantly for perishables, stocks need to be cleared before they expiry.

Stock Cover (Stock Cover Days): Number of days that stock would last, assuming sales continue at the same rate. This measure is used for managing supplies in trade.

Example: If stock is 300 units and sales is 600 units per quarter (91 days), then stock cover days = 300/600 = half a quarter, or about 45 days.

If the opening stock is 300 units (i.e. the stock level at start of quarter) and you are expecting to sell 600 units during the quarter, and you want to maintain 30 days of stocks, i.e. desired closing stock is about one third of quarterly sales or 200 units, then you need to purchase 500 units:

• Opening stock: 300
• Purchases:  500
• Sales:  600
• Closing stock: 300+500−600 = 200

Promotion Dashboard

Promotion Dashboard provides information on retailer displays, co-op advertising and price discount (price-off) promotions.

Table 2.5   Promotions Rating Points.

The weight or magnitude of a promotion, measured in terms of promotions rating points (PRP), is a function of the type of promotion, and its frequency and scale. For example, a small display has a rating of 2 points, a medium display has rating of 4 points and a large display has rating of 6 points. A complete list of promo types and their rating is provided in Table 2.5.

Based on the rating scale, a 12% price-off promotion supported with a large display and a quarter size co-operative feature ad, running for 3 weeks will amass 45 rating points i.e. 3 × (6+6+3).

Brand Image Dashboard

Brand Image Dashboard provides information on:

• Brand image rating (top 2 boxes — Strongly Agree/Agree). A brand’s image is shaped by the emphasis in its advertising as well as the advertising spend levels.
• Brand image profile. Refer MarketingMind for an understanding of how the image profile is computed.
• Advertising spend.
• Advertising emphasis.

The WT column provides the segment importance weights for the Rating, Profile and Ad Emphasis tables. For the Share in Segment table, the values under this column reflect the weighted average image rating for the brand, across each segment.

Advertising Dashboard

Advertising Dashboard provides information on advertising spend and brand salience. Measures include:

• Aided advertising awareness. This is primarily a function of advertising spend since advertising quality is presumed constant in Destiny.
• Unaided (spontaneous) brand awareness. In addition to advertising, brand awareness is a function of the proportion of homes using the brand.
• Advertising spend.
• Share of voice based on advertising spend. This is one of the important drivers of brand choice.

Product Dashboard

Product Dashboard provides relevant information for product design and development. Details include product ingredient composition, cost of ingredients, product utility (product quality), utility index, price index, listed (undiscounted) trade price and material cost.

Utility

Utility is a measure of preference for a product, in terms of its performance. If product A’s utility is greater than that for product B, it means that on average consumers prefer A over B. Similarly, the extent to which a product’s formulation has improved can be measured in term the increase in its utility.

The relationship between composition of ingredients and their utility or part-worth is derived from conjoint analysis, a technique for designing and developing products. For the food and personal care categories in Destiny, the relationship is quadratic or ideal point. As ingredient composition is increased the part-worth rises up to an optimum level. Further increase in composition is not advisable as it will result in loss of utility.

Besides the optimum level, product developers need to know the importance of the ingredients in terms of their contribution to the product’s utility. Nectar, for instance, contributes more than any other ingredient to the utility of ambrosia products.

The optimum level (opt) and relative importance (imp) of ingredients is shown at the right of the ingredients table in the product dashboard. The utility curve, i.e. the mathematical relationship between the ingredient composition and part-worth is depicted in the ingredient workbook under the resources tab.

Product development typically requires trade-offs between quality and material costs. Use the utility function and the data on cost of ingredients to achieve the desired improvement in product quality at minimum cost.

Utility Index and Price Index

An Index is a normalized average. If the product’s utility is equal to the weighted average utility of products in the market, it will have an index of 100. Similarly, if a product’s price index is 100, that means the product’s price is exactly the same as the weighted average price of products in the category. If the product’s price index is greater than 100, it means on weighted average its price is higher than that for competing products.

A product’s price index may be computed as follows:

• Price index = Wtd Average Product Price / Wtd average Price for Category × 100
• Weighted average Product Price = Product’s Sales Value / Product’s Sales Volume.
• Weighted average Price for Category = Total Category Value / Total Category Volume. 

Because it is a weighted ratio, the utility index (or price index) can change, even if there is no change in the product’s composition (or its price). Indices are also be affected when the proportion of sales across brands (i.e., market share) changes.

Price Performance Gap

Product quality and price, are among the key factors that determine brand choice.

Comparison between a product’s utility index and price index provides an understanding of the price performance gap. If the utility index is greater than the price index, the product offers relatively good value for money.

Brand Dashboard

Configured for diagnosing the health of a brand, the brand dashboard provides information on the metrics driving brand sales and profitability:

• Price and price index, across the chains.
• Product quality in terms of its utility index. If the product’s utility index is greater than its price index, it would tend to be perceived as imparting good value for money.
• Market share across segments and across chains.
• Advertising spend and share of voice (% of spend).
• Brand image rating (top 2 boxes — Strongly Agree/Agree).
• Image profile.
• Advertising emphasis.
• Promotion Rating Points.
• Purchases by the retail chains.
• Out of stock days.

Commercial Dashboard

Commercial Dashboard is configured to impart an understanding of the ingredient cost and gross margin of the products. It also provides information on the production capacities.

Measures include:

• Trade price. This is the listed price of the product, and it excludes any trade discounts.
• Material cost or the cost of the products’ ingredients.
• Cost break-up across the ingredients.
• Gross margin = Trade price (listed) − material cost. (Discounts to trade are excluded).
• Ingredient composition.
• Ingredient cost per kg.
• Production capacity.

Note that for trade price and ingredient cost, the relevant tables also provide information on the current decision time periods, i.e. the next two quarters.

Prices at Different Stages of the Supply Chain

As with any commercial setting, prices at different stages of the supply chain will impact your company’s performance in Destiny. These include:

• The price at which manufacturers purchase ingredients. This determines the product cost.
• List price. This is the regular (undiscounted) price at which the product is sold by the manufacturer to the retailer. Besides this dashboard, list prices are displayed in the decision templates and the P&Ls. They are set 6 months in advance.
• The actual transfer price may not be the same as the list price. It is usually discounted after the negotiations kick in.
• Regular Shelf price. Manufacturers do not get to see this price. (Retailers set this price in their decision template, and it appears in their P&L).
• Actual Shelf price is the price at which the product is sold to shoppers in the store. It may vary each week depending on the price-off discounts.
• The prices in market and trade dashboard are the weighted average prices at which products are sold to shoppers. They are weighted over the 13 weeks in the quarter (= total value sales in the quarter / total volume sold in the quarter).

Dashboards — General

The Dashboards provide broad based information pertaining to the markets, including metrics on the market size and share, trade dynamics, advertising, brand image, product development and commercial. Updated after each decision cycle, they are designed to address the diverse information needs of retailers and manufacturers.

The metrics:

• Market size in volume, value, share and price, with break-ups across segments and brands, within each retail chain.
• Advertising Spend, Aided Advertising Awareness and Spontaneous Brand Awareness.
• Advertising Message in terms of the Emphasis on different image attributes.
• Brand Image ratings.
• Brand Profile.
• Product Composition in terms of the proportion of each ingredient.
• Ingredient Cost.
• Product performance in terms of utility.
• Trade performance across categories and manufacturers.
• Trade Purchases and Stock levels across chains.
• Trade Promotions.
• Banner Image Ratings and Profile.

Historical data pertaining to Year 1 for the above measures is also provided in the Appendix.