Brand KPI

Setting Path to Growth

1
In your opinion, does Marketing take responsibilities for Brand Sales?

What is your Brand Sales target & growth rate for this year?

How do you set Brand Sales target for next year? On which indicator?

How do you get your Marketing budget?

What is your current Brand Share versus competitors?

How big is your category? In terms of size & growth?

What is your category Penetration? Frequency & Consumption habits?

How do you translate Brand Sales target to Marketing Objectives?

How do you translate Marketing Objectives into Communication Objectives?

2
“The role of Marketing is to get more consumers

aware of and in love with the brand,

buy more things, more frequently 

and at higher prices.”

— The Role of Marketing

3
By the end of today, you’ll know…

Business 
 Marketing 
 Communication 


Objectives Objectives Objectives

4
Business Objectives

Sales Share Growth Profit

5
 Basic KPIs

Sales Share Growth Profit

6
 Sales

Excercise:

Brand A sells 10,000 180gr-bottle of shampoo a year at a retail

price of 30,000 VND.

What are the Volume Sales and Value Sales of Brand A?

7
 Sales

Volume Sales = the quantity, amount or number of products sold
or services provided
In Capacity (liquid milk, beverage, etc): liter, hectoliter…

 In Weight (powder detergent, personal care, etc): kilogram (kg), ton…


In Counting Number (computers, phones, services, etc): pcs, unit, customers…


Value Sales = the amount of revenue that a company receives

from

 the sale of products or services
In Monetary Unit: VND, US Dollar, Euro…

8
 Sales
Note 1:

Volume Sales can’t be measured by bottle, box, pack... in

categories that use Capacity or Weight units, specially in FMCG,
because they may vary in sizes.

For examples:
1 box of Vinamilk = 180ml VS 1 box of Dutch Lady = 200 ml
This year, Vinamilk sold 10 mil. boxes > Dutch Lady sold 9.5 mil. boxes.
But in actual Volume Sales, Vinamilk < Dutch Lady if you calculate the numbers
(180 x 10 < 200 x 9.5).

9
 Sales
Note 2:

Leading

 in Volume Sales does not guarantee a leading position
in Value Sales, or vice versa.

For examples:
A box of Vinamilk @ 6,000đ VS a box of Dutch Lady @ 6,200đ.
This year, Vinamilk sold 10 mil. boxes > Dutch Lady sold 9.5 mil. boxes.
In actual Volume Sales, Vinamilk < Dutch Lady (as previously caculated).
But in actual Value Sales, Vinamilk > Dutch Lady if you calculate the numbers
(6000 x 10 > 6200 x 9.5).

10
 Sales
Simple Rules:

Sell as much as possible.

Sell all available stock.
Sell at maximum production capability.

Sell more than last year.

However, the market is not that simple:

At no-limit production capability, how big is the market we can serve?
Do we sell more than our competitors?
How big are we, compared to the market? Are we number 1?

11
 Share
Excercise:

Brand A sells 10,000 180gr-bottle of shampoo a year at a retail

price of 30,000 VND.

Brand B sells 7,000 200gr-bottle of shampoo a year at a retail

price of 50,000 VND.

Who is the market leader in terms of Volume Share and Value

Share? How big is Market Size?

12
 Basic KPIs

Sales Share Growth Profit

13
 Share
Excercise:

Brand A sells 10,000 180gr-bottle of shampoo a year at a retail

price of 30,000 VND.

Brand B sells 7,000 200gr-bottle of shampoo a year at a retail

price of 50,000 VND.

Who is the market leader in terms of Volume Share and Value

Share? How big is Market Size?

14
 Share
Market Size = the direct competitive market and alternative
choices available to the current consumer (in volume or value)
with which our brand competes.
Simple question: Who loses when we win?

Height Enhancement Syrup for Kids

All Calcium Products (kids can have)

15
 Share
Market Size = the direct competitive market and alternative
choices available to the current consumer (in volume or value)
with which our brand competes.
Simple question: Who loses when we win?

Brand Share = the relative (volume or value) size of one brand

compared to all other brands in a defined market.
Saigon Red is the leading brand in terms of volume share.
Heineken is the leading brand in term of value share.
X-Men is the leading brand, with highest market share in Men Shampoo category.
X-Men is NOT the leading brand in Unisex Shampoo category.

16
 Share
Simple rules:

Always know your competitive market size.

It doesn’t make sense to sell more than yourself last year, but that “self” is too
small comparing to the market. You’re always in danger with big players.

Sell more than most of your competitors.

Better be No 1 or 2 in the market. Or at least know where you are.

However, the market is not that simple:

Even when we sell more than last year, should we be happy or worried?
How to grow healthily? How do we gain share?

17
 Basic KPIs

Sales Share Growth Profit

18
 Growth
Last year, Brand A sold 10,000 180gr-bottles of shampoo a year at a retail price of
30,000 VND. This year, Brand A manages to sell 11,000 bottles at 35,000 VND.

From a reseach report, the market growth by volume is 20%, by value is 30%.
Should Brand A be happy with those growing numbers?

Answer:

Brand A sold 1,000 bottles more and at 5,000 VND / bottle more than last year.
But…



Brand A’s Volume Growth rate is 10%, less than market growth (20%). 

They’re

 losing volume share.


Brand A’s Value Growth rate is 28%, less than market growth (30%). 

They’re losing value share.

19
 Growth
Growth Rate = the amount of increase that a brand or category
has gained within a specific period and context.
E.g. Brand A’s Volume Growth rate in 2016 is 10% (compared to 2015).
E.g. The average growth rate of Category X is 30% by value and 10% by volume.

Always put in context your Brand Growth and Category Growth.

Beside, it is necessary to also consider the inflation rate.
E.g: If an industry grows 12% by value but the inflation is 15%, so it is not a
meaningful value growth.

20
Sales vs Share vs Growth

+ Share - Share +

Sales

— Share - Share +

— Growth vs Category +

21
Sales vs Share vs Growth

+ Share - Share +

Sales

— Share - Share +

— Growth vs Category +

22
 Category Growth
Growing demand
Technology advance / economy of Growing demand

+ scale / mass commercialization

(camera phones, point & shoot)
Growing value & importance
(air-con category in hot season,
Declining importance hi-end smartphone)
(make-up category in inflation)
Volume

Declining demand Declining demand

— Declining value & importance Premiumization / Upgrade
(feature phone, LCD TV, PC) (Nam Ngu to Chinsu-Nam Ngu)

— Value +

23
 Growth
Simple rules

Always set Brand Growth higher than Category Growth to gain

Brand Share.
Otherwise, you’ll lose market share.
Category Growth can be considered in 3-5 year time-frame.
If no Category Growth found, take average 5-year Brand Growth as KPI.

Only enter healthily-growing category.

Grow in both Volume and Value.
Grow in long-term (10-year) in order to justify investment.

24
 Basic KPIs

Sales Share Growth Profit

25
Profit
Consumer Price ?
Retailer Margin (20%)

Retailer Price 30,000

Brand A sells 10,000 180gr-bottle
Distributor Margin (5%)
of shampoo a year at a retail price
of 30,000 VND. Company Revenue ?
COGS Total
Given the numbers in the table on _ Cap 1,000
the right, if Brand A invests 50%
_ Bottle 3,000
of their gross profit in Marketing,
how much would it be?
 _ Liquid (180gr) 6,000

 _ Label 2,000

 Margin Contribution ?


% Margin ?

26
 Profit
Distribution model in FMCG companies.

Manufacturer Distributors Retailers Consumers

Distributors are paid Retailers are

5% on actual sales-out recommended to sell at
to handle warehouse, xx% margin to
stocking & inventory, consumers. But actual
delivery, salemen consumer price may
management, etc… vary based on market
demand-supply.

27
Profit
Consumer Price 36,000
Retailer Margin (20%) 6,000
Retailer Price 30,000
Brand A sells 10,000 180gr-bottle
Distributor Margin (5%) 1,500
of shampoo a year at a retail price
of 30,000 VND. Company Revenue 28,500
COGS Total 12,000
Given the numbers in the table on _ Cap 1,000
the right, if Brand A invests 50%
_ Bottle 3,000
of their gross profit in Marketing,
how much would it be? _ Liquid (180gr) 6,000
_ Label 2,000

 Answer:
 Margin Contribution 16,500


82,500,000

 VND in marketing % Margin 58%
budget

28
 Profit
%Margin is key KPI to Brand P&L.
%Margin KPI may vary depending categories.
E.g. bottled-drink beverage has %Margin requirement NOT lower than 40%.
%Margin may be much higher for premium categories (fahsion, cosmetic).

%Margin is an indicator to estimate company revenue, which then

minus estimated overhead cost, operation cost, sales & marketing
budget to arrive at company gross margin.
At certain level of %Margin that the brand can generate its own “profit” and contribute to
the company revenue. Ideally, we want all brands to be self-profitable.
Generally, Marketing Budget can be funded at 5-10% of revenue, or 30-50% gross margin.
It really depends on Corporate Strategy whether to invest in building brands / gaining
share or not.

29
 Profit
Simple rules

It is generally in the responsibilities of Brand Team to control

%Margin of its own brand portoflio.
You can’t always increase price, so you have to watch out for cost.
For example, bottle cost (plastic price), instant noodle (potatoes & wheat price),
label cost (numbers of colors & area of printing), etc.

Adjust packaging materials (Pack Mat) & raw materials (Raw Mat)
wisely to maintain expected %Margin.
Thinner bottle, shorter label, less printing-colors, less materials, etc…

30
 Basic KPIs

Sales Share Growth Profit

31
 Simple Rules
Sales
Sell at max production capability. Sell more than last year. Sell at profitable price.

Share
Always know the competitive market size (value & volume).
Not only sell more than last year, sell more than most competitors. Be no.1.

Growth
Gain brand share by growing faster than category growth.
Invest only in healthily-growing categories.

Profit
Maintain good COGs and %Margin.

32
 Profit

Value Sales Value Market Size Value Share

Price Market Growth

Volume Sales Volume Market Size Volume Share

33