PowerPoint Presentation

Smirnoff Repositioning Team

OWEN Intro 1

Marketing Avengers:

Mia Marketing AnalystOwen Marketing AnalystPatrycia Marketing AssistantSehar Marketing Manager

OWEN2

MARKETING PROBLEM SMIRNOFF wants to increase market share

How can we draw more people to consume the brand?

OWEN

INTRO

Hired: Smirnoff wants to increase market share 3

TWO MARKETING TOOLS Perceptual Mapping & Conjoint Analysis

OWEN

INTRO what tools we used to assess and reposition product = perceptual map & conjoint analysis 4

Perceptual Map2-D Map of the consumers mind / How people perceive each brand

Owen

INTRO5

Mia

demographics6

Mia

Demographics

32% of people are single & tie between complicated and committed relationship at 28% 7

Mia

Demographics

52% were caucasian 8

Mia

Behavior

52% spend $75 to $100 a month on consumption 9

Mia

Behavior

IMPORTANT TO POINT OUT: HOME IS THE MOST PREFERED PLACE TO CONSUME let Dr. V know that this will tie into conjoint analysis 10

Mia

Behavioral

IMPORTANT TO POINT OUT SMOOTH IS HIGHEST TASTE PREFERENCE let Dr. V know that this will also tie into conjoint analysis 11

Mia

Behavioral 12

Mia

Perceptual mapping different brands in the market 13

AttributesUnder $10BitterClassySexy ads0-14% alcoholCollectiblePartySmoothSophisticated

Special OccasionGood advertisingShort BottleCommonInternationalUnpopularMixerPreferenceSweet

Mia

Perceptual mapping attributes of smirnoff 14

TVETotal Variance Explained = 0.712

71% of our data is explained by the perceptual map

Mia

Perceptual mapping 15

special occ.

Sehar

Perceptual mapping grand map

Primary: sophisticated, not sweet, good taste, home

Secondary: good ad, 5% alcohol

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Sehar

Perceptual mapping clusters

In the same cluster = competing directlyDifferent cluster = competing indirectly

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Sehar

Perceptual mapping brand preference

90 degree angle shows how preferred each brand is / the farther the projection fall on preference vector in the direction of increasing preference, the more preferred the brand is 18

Sehar

Perceptual mapping gaps & spaces

19

Sehar

Perceptual mapping name the axes

20

Primary AttributesNot SweetHomeSmoothSophisticated

Sehar

Perceptual mapping quick summary of primary attributes

21

Secondary Attributes 0-14% Alcohol ContentGood AdSexy Ad

Sehar

Perceptual mapping quick summary of secondary attributes

22

Conjoint Analysis Conjoint Analysis: technique used to determine how people value different attributes (numerical value)

Conjoint Analysis will calculate market share & help determine market barriers

Problem: Smirnoff wants to increase market shareGoal: Gain more market share in industry

Patrycia

Conjoint Analysis restate the problem23

Statistical Quality of ProductAdjust R squared: 0.39768 explains about 39% of customers preferences

Significance F: 2.26E-41 the result of our data was not due to chance or luck

Patrycia

Conjoint Analysis statistical quality of product 24

Patrycia

As we saw with the perceptual map: HOME, smooth, and sophisticated are the closest to the preference line and have the high utilities.

HOME has the highest utility, which means that its the most important attribute. As we saw in the surveys it was the most preferred setting to consume alcohol.

has the highest TPU, which makes it the most important attribute (highest value),

Conjoint Analysis bar graph 25

Patrycia

Conjoint Analysis > People are NOT rational about price NON linear 26

Intercept TPU level where product MUST be to compete in the marketINTERCEPT = 1

Patrycia

What this means is that the product must be greater than 1 in order to compete in the product.

Conjoint Analysis intercept / explain what it means 27

Optimal Product Under $10 (.17) Smooth (.17) Exclusive (.19) Sophisticated (.16) 0% - 14% (.23) Slim Bottle (.20) Home (.29)TOTAL PRODUCT VALUE (TPU)1.41

Patrycia

Optimal product is 1.41, greater than 1 than it can compete in the market place

Conjoint Analysis best product 28

Least Preferable Product $10 - $20 (.12) Sweet (.11) Party (.11) Sexy (.14) 15% - 20% (.14) Collectible (.13) Party (.00)TOTAL PRODUCT VALUE (TPU).75NOT viable

Patrycia

Least preferred product is less than 1, so it cant compete in the market which makes sense

Conjoint Analysis worst product 29

Patrycia

- Setting is the most important and style is also important, home and sophisticated were close to the preference line as you saw in the perceptual map Conjoint Analysis compare attributes closest to the preference line 30

Current TPUSmirnoffBarefoot Patron $ 10 to $20Under $10Under $10SweetSweetSmoothPartyClassyPartySexySexySporty%15 to %2015% to 20%21% +CollectibleCollectibleStubbyPartySpecial OccasionSpecial OccasionTotal TPU = .75Total TPU = 1.01Total TPU = 1.09

Patrycia Conjoint Analysis added the utilities from the bar graph to get the TOTAL TPU 31

Patrycia

Conjoint Analysis current market share 32

Market Share CalculationsSmirnoff -> exp( .75) / exp(1.01) + exp(1.09) + exp(.75) = 27%Exponential Function of Smirnoff = 2.12 Exponential Function of Barefoot = 2.75Exponential Function of Patron = 2.97Barefoot -> 2.75 / 2.75 + 2.12 + 2.97 = 35% Patron -> 2.97 / 2.97 + 2.75 + 2.12 = 38%

Patrycia

Conjoint Analysis calculations / dont need to talk about it unless she asks in class 33

NEW TPU SmirnoffBarefoot Patron $ 10 to $20Under $10Under $10SweetSweetSmoothPartyClassyPartySexySexySporty%15 to %2015% to 20%21% +CollectibleCollectibleStubbyHomeSpecial OccasionSpecial OccasionTotal TPU = 1.04Total TPU = 1.01Total TPU = 1.09

Patrycia

Conjoint Analysis NEW TPU 34

Patrycia 35

Simulated Market Share NEW Exponential Function of Smirnoff = 2.83Smirnoff = 2.83 / (2.83 + 2.75 + 2.97) 6% INCREASE = 33%

Barefoot = 2.75 / (2.75 + 2.83 + 2.97) 3% DECREASE = 35%

Patron = 2.97 / (2.97 + 2.75 + 2.83) 3% DECREASE = 32%

Patrycia

Conjoint Analysis Setting was the most important attribute so we changed from party to home. We changed the setting in order to catch up with the competition. 36

MARKET REACTSSmirnoffBarefoot Patron $ 10 to $20Under $10Under $10SweetSweetSmoothPartyClassyPartySexySexySporty%15 to %2015% to 20%21% +CollectibleCollectibleStubbyHomePartySpecial OccasionTotal TPU = 1.04Total TPU = .85Total TPU = 1.09

Patrycia

Conjoint Analysis Changed most important attribute setting / from special occasion to party 37

Patrycia

38

Simulated Market ShareSmirnoff : 2.83 / (2.83 + 2.97 + 2.34) = 35% INCREASED 8% from beginning

Barefoot: 2.34 / (2.34 + 2.83 + 2.97) = 28% DECREASED 7% from beginning

Patron: 2.97 / (2.97 + 2.83 + 2.34) = 37% DECREASED 1% from beginning

Patrycia

Conjoint Analysis simulated market based on CA 39

Updated Market Share

Sehar

Conjoint Analysis after simulating market the updated market share is 40

CA Recommendations Setting Party Home

Sehar

Feature setting most important attribute is home 41

Strong Recommendations ** Home

Sophisticated

Sehar

Conjoint Analysis CA & PM 42

Suggestions0-14%

Good Advertising

Sexy Advertising

Sehar

Conjoint Analysis CA & PM contradict each other explain why 43

THANK YOU!

Sehar44