Monday Jan 17, 2022

Brand Metrics: Are You Measuring STIs?

Purchasing intention (ITP), or its equivalent, is a well-established brand metric, in many categories, to measure consumers’ intention to buy a particular brand. Researchers and marketers have established and demonstrated a strong correlation between ITP and market share. As a result, ITP is now an important measure of marketing effectiveness and a leading indicator of likely market share and movement.

However, the actual market share is never equal to the ITP. The simple reason for the same is that ITP represents the intentions of only one of the parties involved in the transaction: the consumer. It assumes that the consumer will get the brand they want. The sale of a brand can only materialize when the seller is also willing to sell the same brand that the consumer wants.

The purchase cannot be made without a vendor (retailer). Anyone who is exposed to channel sales would fully understand that the motives of the seller (a multi-brand retailer) for promoting a brand are very different from the reasons of the consumer for wanting that brand. These motives lead a seller to convince and convert potential customers to their choice of (seller’s) brands. This is no reason to believe that this would happen in exclusive brand stores.

The seller’s ability to convert varies by category, their motives, and the consumer’s insistence. In consumer durables, a category with which I am very familiar, brand conversion by retailers reaches 60%. I suppose this is also true for consumer goods brands, especially when modern commercial retailers are interested in promoting their own brands over brand names.

In such a scenario, ITP alone cannot be the measure of potential market share. Retailers’ “intent to sell” (ITS) must match ITP to realize the full potential of a brand.

Potential market share is a function of ITP and ITS. I am not aware of any retail or brand study that measures “intent to sell” or any proxy measure for ITS. It’s about time marketers and research professionals started measuring ITS alongside ITP for a comprehensive understanding of a brand’s market share potential.

Also, in an organization where marketing and sales are two separate functions, ITS should also be a measure of sales effectiveness. I firmly believe that marketing (excluding sales) should be responsible for engaging the mind of the consumer and sales should be responsible for engaging the mind of the retailers. ITS is a measure of the involvement of the mind of retailers.

You are free to use the concept of ITS, but remember you read it here first. 🙂

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