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Mon 9 Jun 2008 04:00 AM

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Relationship issues

Lesley van der Walt, global brand equity director for TNS discusses retailer-brand relationships.

Lesley van der Walt, global brand equity director fo rTNSdiscusses retailer-brand relationships.

Measuring brand health and the impact that strength of relationship and market factors have on the market are part of a day's work for van der Walt at the Cape Town-based Customer Equity Company, a subsidiary of TNS, a world leader in business information and market research services.

During her recent visit to Dubai, she stressed that the retail environment is becoming increasingly important from a research perspective, not only for the retailers but also for the brands themselves.

"Moving forward, we will see more collaboration between the retailers and the brands in terms of developing the in-store experience to the benefit of both. Customers will either go out of their way to find a brand, or not; it's very important to understand that to really capitalise on the retail experience.

The Conversion Model is the world's leading measure of commitment; a psychological measure, rather than a behavioural one. It is based on the recognition that commitment underpins loyalty, but that the two are not one and the same. It was developed in South Africa almost 20 years ago, and has since been implemented in 10,000 projects.

Brand commitment is not simply about knowing whether people are satisfied with a brand, van der Walt argues, "market factors such as convenience of location and parking availability are very important." Retailers must also consider the extent to which consumers are immersed in the experience.

"If shoppers are viewing the shopping they are going to do as a chore, to get in and out quickly and find the cheapest prices, you may find that type of customer does not have a strong relationship. If the experience is not satisfied, it will lead to a weaker relationship.

"The competition will also influence how they feel. Someone may prefer another store and go out of their way to get there. We collect information to tell a client if the customer is female with a young family living in a particular area and from which socio-economic group. We would start to draw a picture of what their target market group would look like and where the potential is for them to get more from customers."

Van der Walt explains that such information leads FMCG professionals to a series of questions. Should we be discounting the brand? Can we get more shelf space? Is my competitor pulling my customers away because there is a perception its produce is better than mine?

She urges retailers to consider that, "if it's case that people are treating you as a convenience location then you have to look at ways to make that happen, such as having more checkouts, more stores at more locations.

"If people are genuinely unhappy with the service you provided, is it because the trolleys don't work or products are often out-of-stock? The experience itself is becoming so much more important for the shopper.The Conversion Model tracks changes in the relationship and diagnoses problems when brand health deteriorates through constant monitoring of the market.

"From a commitment point of view, if you are trying to launch into a market where people have strong relationships to brands and stores, it's going to cost you more and it's going to be far more difficult to break through, than if you're launching into a market where people are less happy.

"The only way to create a successful launch strategy is to determine who is available to buy your new offering. And who isn't. When you know who these people are, you are able to create a launch strategy that works. Otherwise you run the risk of your efforts falling on deaf ears.

To ensure brand health, the model examines why people are buying it, as companies' "positions will never be secure.

The Conversion Model also has the ability to measure existing levels of commitment in a market in terms of the likely success or failure of a new product.

The model would ensure products are not being placed on shelves to be overlooked, or backed by valueless advertising campaigns. She advises that in-store sampling and promotion will prove more effective to win over new consumers, than above the line advertising.

"For example, if you want to attract ‘open' people who are young and single, are they more likely to be online? Are they more likely to be watching particular TV programmes? What are they doing? Target your media strategy more appropriately," she warns.Marketers often mistake brand loyalty for commitment.

Loyalty is what people do - the likelihood of repurchase based on past behaviour, whereas commitment is about how people feel - the likelihood of repurchase based on what's in the consumer's mind. Consumers could buy the same brand habitually, however this pattern does not guarantee commitment. If consumers are not committed, they are vulnerable to other brands.

"They may simply be buying it out of habit, for example. Break the habit, and the loyalty disappears. But when loyalty is based on commitment, it's much harder to break. The only way to create a successful launch strategy is to determine who is available to buy your new offering. And who is not."

To track brands, the Conversion Model identifies its challenges and provides early warning signals if trouble is ahead.

• Is it a ‘retention' problem - a failure to create committed users?

• Is it an ‘attraction' problem - a failure to attract non-users?

• Is it a ‘market share growth' problem?

• is the brand at saturation?

The Conversion Model answers the following questions Does it sell the product? Or does it create a long-term increase in sales by strengthening the brand in the minds of consumers?

"Target those people most open to what you have to say, rather than wasting money on ‘unavailable' people who are not receptive," she adds.

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