MORE ON AWARENESS, PURCHASE INTENTIONS and PREFERENCES IN MARKSTRAT

This tutorial is designed to clarify how Awareness, Purchase Intentions and Preferences are calculated in Markstrat. It will help instructors understand why sometimes Purchase Intentions for a given brand are greater than Awareness in Markstrat. This most happens in the Vodite market. Preliminary note: All Markstrat studies are done at the beginning of the period.

AWARENESS
This study is made on N respondents. Lets assume that N = 1000. The study starts with a number of questions to determine what segment the respondents belong to. Lets assume that our 1000 respondents are all Adopters.

QUESTION:
What Sonite/Vodite brands do you know ? Respondents can list several brands.

LETS ASSUME THAT THE RESPONSES ARE:

Number of respondents aware of VALF only 348 VANM only 78 VOVO only 68 VALF & VANM only 95 VALF & VOVO only 83 VANM & VOVO only 19 VALF & VANM & VOVO 23 Not aware at all 287 Total 1000

STUDY RESULT:
The agency then summarizes the above information as : AWARENESS (% of respondents aware of)
VALF VANM VOVO 54.9% 21.4% 19.3% = (68+83+19+23)/1000

A FEW REMARKS:
Awareness does not sum to 100%. Sum of awareness is usually lower than 100% at the early stage of the market. Sum of awareness is much greater than 100% when the market is developed. Even if sum of awareness is greater than 100%, it does not mean that all consumers are aware of at least one sonite/vodite.

PURCHASE INTENTIONS (PI)

This study is made on the same N respondents (awareness and PI are in the same study).

TWO QUESTIONS:
Do you intend to purchase a Sonite/Vodite during the next 12 months? If yes, what brand do you intend to buy? Respondents can only choose one brand.

LETS ASSUME THAT THE RESPONSES ARE:

240 out of 1000 respondents intend to purchase a Vodite. Out of these 240 respondents: 34 intend to purchase VALF, 26 intend to purchase VANM, 180 intend to purchase VOVO In the above example, we see that only 18% (180/1000) of respondents intend to purchase VOVO.

RESULTS:
The agency summarizes the above information by normalizing to 100% purchase intentions so as to facilitate the comparison between PI and market shares : PURCHASE INTENTIONS (% of respondents intending to purchase)
VALF VANM VOVO 14% 11% 75% = 180/(34+26+180)

A FEW REMARKS:
PI does sum to 100%. This is apparently what creates the confusion.

PREFERENCES
You may eliminate awareness from the equation by calculating the preferences for the brands, I.e. what consumers would purchase if you organized a focus group, where product are presented to respondents. All you have to do is to divide PI by Awareness and then normalize to 100%. With the above example, one obtains the numbers below. As you can see, VOVO is by far the preferred product. Preferences
VALF VANM VOVO 5.5% 11.0% 83.5%