Part 2. MM4XL Tools > 1. Strategic Tools > Brand Switch > Dynamic Analysis Report

Brand Switch Analyst

Dynamic Analysis Report

The table below refers to the input data of the sheet you can open clicking on the Example button from the Brand Switch tool form. A dynamic analysis was run for the brand Lucky Strike starting with Year 1939 and ending in Year 1943.

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

In column Total the upper half of the table shows the same values that can be found in the range C28:C32 of the sheet MM4XL - Brand Switch Analysis of the example file concerning the Brand Switch tool. These are the input values for the brand Lucky Strike in the period 1939-1943. Each input value has been broken into the three components of switch behavior(switch-in, switch-out and loyalty), and the results are shown in one row. Values in green are switches in favor of the analyzed brand, values in red are unfavorable switches and, between red and green values, in black the loyalty rates.

Lucky Strike increased brand loyalty from 28.9% to 33.6% in the period 1939-1943. It had a positive, decreasing relationship to Camel, from which it drew around 5% sales every term, and it had a negative, increasing relationship to Chesterfield, to which Lucky Strike lost around 5% sales every term. The column G Switch In-Out shows the saldo of the incoming and outgoing sales, and its development is negative indeed, which stands for a progressive loss of competitive power.

The lower half of the table shows statistics concerning the values in the above half. Saldo equals the difference between term 1943 and term 1939. The remaining statistics refer to the values in their same column in the upper half of the table, and their basic nature should not require further explanation. Just in case, details concerning descriptive statistics can be found in the tool chapter Descriptive Analyst.

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

The values in the table above can be printed in percent values as well. We have omitted the data for the sake of brevity. Percent values should be treated with caution. They refer to the user input data, so two identical percentages from different products will have, most probably, very different values in the original unit.

The table Correlations of Switch Values, as the name says, shows the measures of associationof switch values between brands. The measure ranges from 1 (strong positive association) to -1 (strong negative association). In our case, three correlation indices can be computed. The -92.4% refers to the correlation of values in the range B27:B31 and those in the range D27:D31. The index tells us that there is a negative association between switch values From Camel and the portion of loyal sales for Lucky Strike. Given loyalty increases for Lucky, we deduct switch from Camel to Lucky is slowing down.

The chart Loyalty Rates versus Switch Rates is useful for grasping at glance the tendency for one brand. The blue line shows the Loyalty rate and it is plotted on the left axis. The pink line shows the values in the range G27:G31 of the table above, which is the overall sum of switch activities, ending up negative in our case. Add this up to the fact that loyalty levels tend to flatten, Lucky Strike was going through a tough moment at that time.

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

The Dynamic Analysis tool prints two more charts as well: one showing the correlation values and one showing the tendency of switch values. They are quite intuitive and can be seen in the accompanying example sheet.

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