Market Share Estimation with ANPCase study Mobile Phone Providers in Romania

Market Share Estimation with ANP Romanian Dairy Producers

Students:Alina Popescu

Bianca Stoica

Andra Vasile

Cristina Voiculescu

Table of Contents

2Introduction

2Presentation of Criteria

4Results of Pairwise Comparisons

6Final Comparison

6Conclusion

7Annexes

IntroductionThis study has as purpose to analyze the market share of the main dairy producers in Romania. The analysis is performed in the software SuperDecisions and it consist in several steps: choosing the criteria which we consider that influence the market share of these producers, comparing them and verify if they match with the actual data about their market share.Presentation of Criteria

The criteria we chose for this study were divided in four categories, also called clusters: consumer groups, products, advertising, and external environment of the company. Each cluster contains nodes or subcriteria, as explained further on.1. Consumer groups: 2-12 years old, 13-23 years old, 24-50 years old, over 50 years old.

Generally, the children prefer yoghurts with fruits, vanilla, chocolate or ice yoghurts, a product which gains more and more popularity. Teenagers prefer the simple yoghurt or the one with fruits. Adults consume yogurts with cereals and diet yoghurt. Old persons prefer the simple yoghurt.2. Products: range of products, pricing strategy.

There are three strategies practices by dairy producers, regarding the prices of their products: cost orientation, competition orientation, and demand orientation. The first strategy refers to the fact that the price should cover the production costs and it should bring a certain profit to the company. The competition orientation strategy consists in fixing pricing according to the ones practiced by competitors, or to their activities on the market. The demand orientation means that the company fixes prices according to the estimations regarding the sold quantities, or to the observations of promoters.The dairy producers offer a large range of products like: yoghurts with different tastes, milk with different levels of fat, sour cream, and so on.

3. External environment: legal, technological, demographic, social & cultural environment.

The legal environment is very important because there are more and more legal rules adopted, regarding the conditions of animal farms, equipment, and maintenance conditions. On the other side, it helps the diary producers by promoting a healthy way of life in schools, kindergartens, and so on. The technology is important because the investment in equipment is very expensive and this equipment must be appropriate for maintaining in good conditions the products, for achieving high levels of quality and for transporting in safety conditions the products.

The demographic environment in Romania is an opportunity for dairy producers since the Romanian population is open to trying new products, and to advertising.

The social-cultural environment is characterized by the preference of Romanian consumers for fresh and natural milk, but also for products with low levels of fat.4. Advertising: TV, public relations, selling personnel, samples.Selling personnel is a way to promote new products, by establishing direct contact with customers. Their role is to inform customers about the benefits offered by products, and they represent the image of the company.Public relations is a way of advertising consisting in the involvement of the company in different events of social responsibility, marketing reports, sponsorship, websites of companies, and so on.

Samples are also used to promote new products. Generally, samples are offered by the selling personnel.

5. Alternatives

We chose as alternatives the first three most important dairy producers: Danone, Albalact, FrieslandCampina.The SuperDecisions Software Model

The figure above illustrates the clusters and nodes, as presented earlier, and the connections between them. The clusters are the large categories of criteria: Consumer groups, Products, Advertising, External environment and Alternatives. The nodes are the sub criteria included in the clusters. For instance, for External environment, the nodes are: legal, technological, demographic, social & cultural environment.

The second step was to perform the pairwise comparisons. The pairwise comparisons consisted in choosing, on a scale from 1 to 9 the most preferred option, in respect to a given criterion. The biggest part of the comparisons were based on real data, in order to find out if the actual market share of these companies is similar to the output obtained in the software.

Results of Pairwise Comparisons

After performing the pairwise comparisons in the SuperDecisions software, there were obtained several results, which will be presented further on: the unweighted super matrix, the limit matrix, the cluster matrix and the synthesized results. The Unweighted Super matrix is illustrated in the following table. The column of a node indicates the priorities of the nodes which were pairwise compared with respect to the initial node. These nodes influence the initial code with respect to the criterion market share.The Unweighted Super matrixPublic Rel.SamplesSelling pers.TVAlbalactDanoneFriesland

Campina2-1213-2324-5050+Demog.

envLegal envSocial&

Cultural

envTechn.

envPricing

strRange of prod

Public

Rel00000.000.000.000.0000.00.00.2050.000.000.000.000.00

Selling pers.00000.000.000.000.0000.00.00.0580.000.000.000.000.00

Sponsoring00000.000.000.000.0000.00.00.0580.000.000.000.000.00

TV00000.000.000.000.0000.00.00.6760.000.000.000.000.00

Albalact0.1110.2230.1110.2680.000.000.000.1110.1370.330.4280.2090.330.0980.1770.1950.199

Danone0.7780.7180.7780.1170.000.000.000.7780.7320.330.1420.7290.330.2290.7370.7170.733

Friesland

Campina0.1110.05780.1110.6140.000.000.000.1110.1290.330.4280.06030.330.6710.0850.0880.067

2-120.000.000.000.000.000.000.000.000000.0770.000.000.000.000.0789

13-230.000.000.000.000.000.000.000.000000.2330.000.000.000.000.268

24-500.000.000.000.000.000.000.000.000000.6050.000.000.000.000.573

50+0.000.000.000.000.000.000.000.000000.0840.000.000.000.000.078

Demog

env0.000.000.000.000.000.000.000.000000.000.000.000.000.000.00

Legal env0.000.000.000.000.000.000.000.000000.000.000.000.000.000.00

Social&

cultural

env0.000.000.000.000.000.000.000.000000.000.000.000.000.000.857

Techn.

env0.000.000.000.000.000.000.000.000000.000.000.000.000.000.142

Pricing

Str.0.000.000.000.000.000.000.000.000000.000.000.000.000.000.00

Range of products0.000.000.000.000.000.000.000.000000.000.000.000.000.000.00

Source: SuperDecisions Model

The cluster matrix shows the impact of clusters over other clusters depending on the connections which were created. The results can be analyzed in the table below. The connection between two clusters is created when the node in a source cluster influences one or more nodes in another cluster. As an example, the External environment influences the Products in the same measure with the Consumer groups and the Alternatives (0.333).The cluster matrix

Cluster Node LabelsAdvertisingAlternativesConsumer groupsExternal env.Products

Advertising0.000.000.000.3330.00

Alternatives0.50.001.000.3330.333

Consumer groups0.000.000.000.3330.333

External env.0.000.000.000.000.333

Products0.50.000.000.3330.00

Source: Output of SuperDecisions ModelThe next table shows the synthesized results of the SuperDecisions Model. They indicate the market share of alternatives obtained after performing the pairwise comparisons in the program. The relative market share is represented by the column Normalized Values:In the first raw, are presented the idealized values, which result from dividing the normalized values by the largest one.Synthesized results

Ideal ValuesNormalized ValuesRaw

Danone1.000.5191070.44888

Albalact0.4967940.2578890.223

FrieslandCampina0.4295920.2230040.19283

Source: Output of SuperDecisions Model

The values obtained in the synthesized results, will be compared with the actual values of market share, which were retrieved from the website of Ziarul Fianciar. These values are for 2013, and a print screen of the page can be verified in Annex.Real Market share (2013)Dairy products ProducersPercentage

Danone20.24%

Albalact16.7%

FrieslandCampina16.58%

Source: www.zf.ro

Final ComparisonThis study was performed with the purpose to obtain some estimatios of the market share for several Romanian producers of dairy products. The order of these companies, as found on the website of Ziarul Financiar is the following: Danone 20.24%, Albalact 16.7%, FrieslandCampina 16.58.

According to the results obtained in SuperDecisions, the order is the following: Danone 51.9%, Albalact 25.7%, FrieslandCampina 22.3% (see the table below).As it can be noticed, the order of the alternatives is the same, but the percentages of market share differ.Comparison of Results with Actual Data

CompetitorANP ResultsReal Market Share

Danone51.9%37,8%

Albalact25.7%31,2%

FrieslandCampina22.3%30,9%

Compatibility Index1.079

The compatibility index was obtained with the help of the Compatibility Index Template and a print screen of the sheet is attached in the annex part. The compatibility index is 1.079, meaning that the ANP results are close to the real market share. In order for the results obtained in the program to be close to the actual market share, the compatibility index should have been 1.01.Conclusion

The conclusion which can be formulated at the end of this analysis is the fact that the results

obtained in the SuperDecisions Software are similar to the actual values of market share. One explanation for this solution is the fact that the pairwise comparisons were based on the real data which means that it helped us to get closer to the real results.

In our opinion, the SuperDecision software was very helpful in developing our analysis, and the process came out to deliver outputs similar to the real values.AnnexesProducts of the Companies

CompanyName and type of product

DanoneMilk

Sour cream

SanaYoghurt: Activia, Actimel, Danonino, NutriDay, NutriDay Delicios, Casa Buna, Danette, Frutmania, Danfruit, Savia.

AlbalactMilk: Zuzu, Fulga, Raraul, Poiana Florilor, DZL.Sana: Zuzu.

Sour cream: De Albalact, Poiana Florilor.Yoghurt: Zuzu Bifidus snack, Zuzu max Fruit Yoghurt, Poiana Florilor,

FrieslandCampinaMilk: Napolact, Milli, Completa, Oke

Yoghurt: Chocomel,

Compatibility Index Computation

1