Brand Effectiveness

🎓 Definition

Brand effectiveness compares the Brands Share of Assortment (the total number of items representing how many percent of the total assortment) with the Brand’s sales Contribution.

🧪 Example of Brand Effectiveness

Taking Pet Food category as an example, assume there are 3 main brands; Brand D, C, and F. These three brands contribute to 80% of category sales and each brand has a different number of Skus within the category.

To analyze which brand is the most effective, a Retailer can compare the Share of Assortment and their Sales Contribution.

Brand D: Contributes 15% of sales and holds a 24% share of assortment
Brand C: Contributes 30% of sales and holds a 15% share of assortment
Brand F: Contributes 35% of sales and holds a 10% share of assortment

The most effective brand that could generate a high sales contribution, despite having a lower number of Skus is Brand F.

💡Tips

A Brand with low effectiveness has a share of the Assortment larger than its share of sales. If some of its low-performing items are duplicates or similar items from other Brands, it should either review its Retail Mix or be ready for de-listing.

❓What is used for

By utilizing, this analysis, a Manufacturer can measure the visibility of its brand and measure the assortment performance to benchmark versus its competitors.

A Manufacturer can use the Brand effectiveness insight to review the number of its Skus and propose to its Retailer to increase , decrease or replace some Skus to ensure its Brand effectiveness met Retailer's expectations.

This method of effectiveness measure does not stop at the Brand level but could be applied at the category or sub-category level to understand the role of each category or subcategory. One of the insights can be to review the sub-category with high potential in range effectiveness to launch new SKUs.

How is "Share of Assortment" calculated?

The "Share of Assortment" is calculated by determining the total number of items representing a brand within the total assortment of products in a specific category. To put it simply, it's the percentage of products a brand offers compared to the total number of products available in that category. For example, if a brand has 10 different products out of a total of 100 products in a category, its Share of Assortment would be 10%.

What factors influence the effectiveness of a brand, other than the number of SKUs?

While the number of SKUs is a significant factor in determining brand effectiveness, other factors can also influence it. These factors may include brand awareness, marketing strategies, product quality, pricing strategy, customer loyalty, and the overall brand reputation in the market. A brand with strong marketing campaigns, high-quality products, competitive pricing, and a loyal customer base is likely to be more effective, even if it has a smaller assortment of SKUs.

How can brands improve their effectiveness based on this analysis?

Based on the analysis of brand effectiveness, brands can take several steps to improve their performance. First, they can review and optimize their SKU assortment by introducing new products that meet market demand or discontinuing low-performing items. Second, brands can invest in marketing and promotional activities to increase brand awareness and visibility in the market. Third, they can focus on enhancing product quality and ensuring competitive pricing to attract more customers and improve sales contribution. Lastly, brands should continuously monitor and analyze their performance metrics to identify areas for improvement and make necessary adjustments to enhance their overall effectiveness in the market.