Category: Economics

Duplication

In marketing, duplication has been used to imply the ability to act as the market leader and set the pace in as far as the market dynamics are concerned. In this concept, every marketing entity in the market is considered to account for a given percentage of the market share which can be theoretically determined. In determining the market share of every entity, its actual share in the market is expressed as a percentage of total sales of the particular brand over the total sales of the product. This means that the total sales of the individual products depend entirely on the sale of the individual brands. In defining the market composition, it has been noted that one must include all the key factors of an ideal marketing. This should be done by integrating the knowledge of previous consumer patterns with the current trends and using this data to foretell future trends in marketing. This ensures that no gaps or misfits are left within a marketing strategy as this could cause a total failure. It goes without saying that duplication purchase laws as well as past consumer trends should be considered significantly in any marketing plan. In this case, there will only be a single switching coefficient for all the brands of this product (Dick, 2011).

Strategies

The market share of any brand depends on how penetrative the brand is in the market. This is basically the tendency of a pre-existing product to gain market prominence or a new product to increase its presence in the market. Marketers often use specific strategies to enable their brands to penetrate the market. These may include customer friendly services like media advertisements, price reductions or use of bulk discounts to encourage people to buy the product. According to literature, price reduction is said to be the most effective strategy. This is basically due to the fact that consumers like free services or goods they do not have to pay for. Thus, it will be impossible for a customer to go for expensive product when there are cheaper ones in the market. This is especially so if the products are of exactly the same quality (Güler & David, 2008). However, it is disadvantageous in the sense that it is quite an expensive strategy. For one, the seller has to forgo profit making in order to promote the product first and then enjoy the benefits of an expanded market later on. The extent of penetration of a product in households can be calculated by dividing the number of families within a population that uses the product with the total number of families in the given population. This is slightly different from average purchase frequency which basically concerns the number of times within a specific period of time when a household purchased a given product. In an ideal marketing, both penetration and duplication principles will emerge. These can be used together to assess the market growth of the individual brands, albeit in conjunction with laws of demand and supply. It should be noted, for instance, that double jeopardy law dictates that the market share of a given product will be proportional to the number of loyal buyers. Thus, when the brand loses momentum in the market, the loss will be proportional to its market share (Homburg & Sabine, 2009).

Law of Moderation

There is also the law of moderation which basically states that buyers who purchase in bulk are likely to reduce the volume of their purchase over time. Thus, the time when market share is determined is also important and should be considered. It can give an impression that a particular product brand is popular in the market yet the data that was used for that conclusion was only relevant for a particular period of time. In this law, it is also indicated that sections of the market who are perceived as small buyers will become bulk buyers at some point and bulk buyers may stop buying completely at other times. This stems from the fact that buying is not a luxury and people do not just buy because they like. Thus, one would only buy a product that is needed, and this extent of need often differs from season to season. It is worth noting that certain brands will remain on the shelves during a particular season and sell in mass when their season arrives. This is the principle of demand and supply with respect to differences in the time and location of the market (Güler & David, 2008). Marketers of product brands are alive to the fact that individual brands are basically similar and that it is only marketing strategy that will cause a difference in their market volumes. It goes without saying that customers’ tendency to become loyal buyers of a given product will be based on what they believe rather than what they know. It is worth noting that consumers will only become fond of the brand that he or she likes and will hardly talk about those brands not preferred. This always shows in consumer surveys that are conducted with a view to determining the market shares. This principle basically gives validity to such surveys as true indicators of market penetrability. In the given spreadsheet below, illustrations of duplication purchase as well as product penetration are shown for the three brands in the market. In addition, there is average duplication, expected as well as brand deviations are shown.

Question 1

From the given figures, it is clear that penetration and purchase duplication have a positive correlation. This is not limited for any particular brand, but transcends for all the brands in the market. This implies that when penetration goes high, duplication also goes up with almost similar margin. The explanation that suits this trend is simply based on the fact that consumers prefer good market brands. It shows that consumers will most probably purchase brands that have strong presence in the market or those that are deemed popular. On the other hand, a very few number of people will buy unpopular brands even though they may be of a similar quality. This is a principle that has been used conventionally in analyzing market trends. In this case, it is clear that only a few customers prefer Aztec while the greater majority prefers BB standards. It can also be seen that duplication seems to nosedive from BB standard as it approaches BB Murphy’s and then rises sharply towards ETA O’Ryans (Homburg & Sabine, 2009).

Average Purchase Duplication

Notably, the extent of penetration for BB Begun and that of Burger rings are almost equal. On the other side, they slightly differ in average duplication by a margin of 2%. This typically implies that their presence in the market is almost equal and a market survey is likely to provide the same information. However, it is worth noting that they both have a very low consumer penetration as they are not that popular in the market (Güler & David, 2008). It can therefore be deduced that Burger rings shares significant portion of its market with other brands of the product. It therefore brings in the question of double jeopardy in order to give a clear distinction between the two. Accordingly, the law of duplication still applies to the trend that these brands appear to take with regards to the market share. It is also worth noting that it is only Sanchos that appears to cut its own market niche as it does not share its market with other brands in the market. This can be attributed to the design of the product or the target market. For example, it might have been designed such that it only sells among the wealthy class for purposes of prestige. It goes without saying that nature of branding is likely to affect the market share as similarly branded products end up sharing the same market segment (Aaker, 2010).

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Question 2

In providing a solution to question 2, it is worth noting that average duplication is placed on the y axis while penetration is placed on the x-axis of the scatter graph. This implies that penetration is the independent variable while average duplication is the dependent variable in the market graph. It is also clear from the scatter graph that duplication will rise by 2% for every 1% rise in penetration. A typical example would involve BB standards. In this case, an increment in the market share of BB standards by 15% will imply that about 30% of the market will adopt the strategies used for this brand in order to get that market share. It is basically a system where marketers try to use what is tried and tested to see if they will also reap the same benefits. Essentially, BB standards will then act as the market leader in the sense that it provides the market with strategies that other brands will also try to copy and apply. Indeed, it is not quite obvious that such will work for them, but often does if properly applied in the right context of the specific market (George, 1994).

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Question 3

According to the values provided, the duplication appears to be gradually changing across the board for the various brands. However, the brand that stands out with the highest average duplication is the BB brands, it actually accounts for 75% of the total duplication. Other brands that come slightly after the BB brands include the BB Murphey’s as well as ETA O’Ryans that are both placed at position two. They both have an average duplication of 43%, a significant difference from that of BB brands. This is then closely followed by Kettle fries BB com chips and BB twisty at 37%, 33% and 30% respectively. The downward trend goes with ETA Munchos tying with BB Biguns at 28%, and Burger rings and CC’s both at 27%. This effectively leaves Aztez and Sanchos at the bottom with 6% and 18% respectively (Dick, 2011).

Question 4

Purchase duplication ratio is conventionally defined as the ratio of average duplication to average penetration. In this case, the duplication ratio is 2.3 and this explains the market trend shown in the figures provided. Basically, the value of purchase duplication ratio can be used to determine the purchase duplication for every single brand given that it is a constant. Essentially, it helps in determining the right combination of brands that will give the best sales in the market. According to literature, consumers would likely go for a combination or a package that will contain the right quality as to optimize their level of satisfaction with the products. Indeed, it is such a package that is likely to induce customer loyalty given that the customer will get all he or she needs in just a single combination. This does not only save time, but is also convenient for customers (Güler & David, 2008). The trend indicated in the figure provided suggests that certain groups of customers are too loyal to specific brands such that they would not easily accept any change. In this case, marketers have to understand that a significant motivating factor will have to be used to change the customers’ taste in order to get them using a different product. It goes without saying that strategic steps will have to be taken to create a clear distinction between various brands in the market in a manner that the market can recognize. For example, the fact that BB Murpheys controls a 47% implies that customers will most likely go for this brand. This trend will reduce significantly across the board with Aztec being the least preferred brand (Aaker, 2010).

Question 5

As earlier stated, the coefficient remained constant at 2.3 for all brands in the market. Thus, whatever happens in the market is not likely to affect this value significantly. This will apply to all the brands including Aztez that has extremely low penetration. In this case, the la of duplication will still remain applicable for all these brands, albeit with slight differences in the coefficients. In addition, the coefficient of duplication will be altered, especially considering that perception plays a significant role with regards to product branding. For example, marketers will try to brand their products in a manner that shows a clear distinction in quality as well as general appearance of the brands. In most cases, the brands that look uniquely attractive are likely to end up with higher penetration in the market. It is also a workable strategy to keep a brand dominant in the market by constantly changing its features to keep customers talking about it. Basically, it is about making the product popular among consumers even if they do not purchase it. In the end, they are likely to forget other brands that they cannot remember and become loyal consumers of the popular brand. It is worth noting that the value of duplication corresponds to the chances that consumers will buy brands other than the ones they are loyal to (Dick, 2011).

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