Choosing the Right Metrics for Listerine Brand Management in Brazil – Case Solution

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Choosing the Right Metrics for Listerine Brand Management in Brazil Case Answers

This case solution includes an Excel file with calculations.

1.) According to the case, what are the pros and cons of targeting each marketing metric proposed in the decomposition of market share (penetration share, share of requirement, usage index)? As Listerine’s brand manager around 2010, which marketing metrics did Art emphasize as reflecting the brand’s objectives?

Out of total purchases of a customer of a product or service, what percentage goes to a company that defines its market share? It can be simply interpreted as to what extent consumers prefer some products instead of competitors’ ones, and the higher the market obtained by a firm, the greater the sales and the lesser the effort to sell more, meaning a strong barrier to entry for other competitors. It is more likely to be a key goal when market shares are known and easily measurable, and it is often unimportant for small firms.

It is helpful to allocate the customers across the companies within the market and define the objectives. Even though Listerine was the leader in the mouthwash market between the years 2009 and 2014, because it reached the greatest market share in 2010, there was a slight decrease in the revenue brand share metric in the mouthwash category. However, this metric is considered to be too reductive since it does not allow the analysis of the whole context perfectly.

When Art, marketing manager at J&J, was hired to become the product manager for the Listerine brand in Brazil in 2010, he was faced with a critical landscape in terms of Colgate’s market share; an unexpected growth had just happened.

His brand’s objectives were emphasized by the market share itself (the basic metric from which to start any strategy) and the following other metrics.

Penetration share is a measure of brand or category popularity (it looks at “active” consumers). In particular, the two key measures of a product’s “popularity” are penetration rate and penetration share.

The penetration rate is the percentage of the relevant population that has purchased a given brand or category at least once in the time period under study.

A brand’s penetration share, in contrast to penetration rate, is determined by comparing that brand’s customer population to the number of customers for its category in the relevant market as a whole.

It can be useful when considering the opportunity to grow by bringing new consumers into the market (gaining competitors’ consumers, attracting non-users, or convincing existing ones to increase their purchases). Penetration share can also be used in developing strategies to increase the market share of a particular product or service.

Regarding the Listerine case and the fact that the market share has been reduced in the first four years, this implies that the Penetration share for Listerine has decreased, and the brand lost some consumers.

If Listerine wants to increase its popularity among the mouthwashes category, it should develop new strategies to become more attractive in that particular sector.

One of the first concerns of the new brand manager, Art, is to reach the overall category growth and consequently increase brand awareness by planning a long-term strategy to reach a strong competitive advantage within the market.

One of the cons of the penetration share is that it does not take into consideration the different purchasing behaviors of the consumers.

For example, there could be customers who are not classified as “active” because they do not make frequent purchases within a category. Instead, they buy large quantities for longer periods.

Share of requirements is a measure of how well the brand meets the range of needs of its customer base. It is calculated solely among buyers of a specific brand. Share of requirements is, in essence, the market share for a brand within a market narrowly defined as the people who have already purchased that brand.

This metric can guide a firm’s decisions on whether to allocate resources toward efforts to expand a certain category that could be particularly profitable, to poach customers from competitors, or to increase the share of requirements among its established customers.

Marketers consider the share of requirements as an indicator of customer loyalty, and in fact, it aids in understanding if the offering encounters customer satisfaction.

Share of requirement is useful when we want to…