Part 2. MM4XL Tools > 1. Strategic Tools > Brand Switch > Data Output

Brand Switch Analyst

Data Output

Brand Switch Analyst returns the following output for the input data:

  1. Market shares for all items in the analysis
  2. Market share forecast for each brand at time t+1 (user option)
  3. Switch-in, switch-out, and retention rates as a percentage
  4. Switch-in, switch-out, and retention rates in raw value as input (user option)
  5. Solver reports: answer, sensitivity, and limits (user option)
  6. One or more maps that illustrate the switch dynamic between brands (user option)

The market share is the ratio (Brand Sales / Total Market Sales). Center Bread in January 2003, for instance, posts sales for 88.986 and the total market is worth 156.879, so its market share equals 56.7%.

Brand Switch Software Estimates Customer Loyalty and Retention from Sales Performance Data

The last row of the market share table above can show the market share forecast for each brand at time t+1. The forecast values are computed multiplying the last row of the input data matrix times the matrix of switch rates.

Tip:
Need a forecast for more than one period? Select the forecast row with the mouse as shown above and draw down the lower right, small, black box shown by the arrow. This is forecasting with a 1st order Markov process.

We suggest you read the recommended literature before using Markov processes when projecting sales. Indeed, our model produces a first order Markov process, and you may want to know more about higher order Markov processes, which in fact may project more accurate values. Microsoft Excel makes available all functions that you need for producing accurate results based on switch rates. The MMULT() function is used to multiply vectors, and it is all you need to produce Markov forecasts of higher order. Read also the next chapter Technicalities for more details.

Brand Switch Matrix

We would like to draw your attention to the use of Brand Switch Analyst for the analysis of consumer's brand switch behavior. Any brand switch matrix is made up of three elements:

  1. Column values (Switch-From rates)
  2. Row values (Switch-To rates)
  3. Diagonal value (Retention index or Brand Loyalty index)

Interpreting these values in the light of the manager's prior knowledge of the market, may suggest useful hints and foster strategic thinking. Reading the numbers is easy, but it is the underlying picture that can make the difference.

Anatomy of a Brand Switch Matrix

Brand Switch Software Estimates Customer Loyalty and Retention from Sales Performance Data

The matrix below shows the Brand Switch Matrix in value. The figure 12079 in the first row equals 14.9% of Center Bread's sales in Oct03 (re: switch matrix in %), and so on. It is now possible to compute meaningful column totals, which can be used for computing the difference between row and column totals. The new value corresponds to the net difference between the sales each product gains and the sales it loses. Center Bread, f.i, is estimated to lose 11, say dollars, in the next period, while Warm Bread will gain 945$. The matrix cells detail where the money is coming from and going to.

Brand Switch Software Estimates Customer Loyalty and Retention from Sales Performance Data

In the table above the overall total equals the size of the market in Okt03 (Oct.03).

Brand Switch Maps

The brand switch maps describe every detail reported in the Brand Switch Matrix and more. They are normal Excel charts and can be handled as usual in the Microsoft environment.

Anatomy of a Brand Switch Map

Brand Switch Software Estimates Customer Loyalty and Retention from Sales Performance Data

Lifetime license:
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Price: euro 238.00

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