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Analytics, Strategy, and Orange Juice

How "strategic analytics" might take shape

In the early days of analytics, the techniques now so familiar to us tended to be used in operational applications — logistics, supply chain, operational optimization. Eventually, analytic approaches began to make their way to the marketing supply chain — targeting models, marketing mix optimizations, and the like. Compared to the 6-sigma-like environment of process optimization, moving analytics to marketing was a surprising and helpful feat of abstract thinking. At the time, marketing was the realm of the creative advertising executives. 

Now that analytics is deeply embedded into the fabric of marketing, what would the next step look like? May I suggest the application of analytics to strategy, especially brand strategy? Let’s consider what the beginning steps of strategic analytics could look like by considering, say, orange juice.

Right now the majority of the fresh-squeezed market is being occupied by an oligopoly whose names we all know: Tropicana, Florida’s Natural, Simply Orange, and Minute Maid. Ironically, Minute Maid’s toughest competitor is Simply Orange, which was created by Minute Maid in 2001. Let’s begin with the following question for Minute Maid’s sake: Why is Minute Maid struggling in this space against the others?

[subheadline]The Business Problem[/subheadline]

To determine the best strategic approach for Minute Maid resulting in the highest success, we need to first understand consumer mindset associated with purchasing ‘premium’ Orange Juice.

The business problem for Minute Maid orange juice

We began this exploration by performing a number of “laddering” interviews on some fellow employees here at Merkle about their choices in fresh-squeezed orange juice. In a laddering interview, you explore what features are different between brands, and then probe those differences to ultimately discover what benefits and end states (values) drive those preferences. This effort gave us the concepts that exist at the four layers of the orange juice brand choice map — the map that lays out attributes, benefits, personal consequences, and values that drive choice behavior (for example, see Reynolds & Gutman, 1988). 

We next needed to understand how these concepts connect in the consumer mind. To do this, we executed a standard importance level survey to 222 Merkle employees laying out the concepts gleaned in the laddering interviews. Using those scores, we can use factoring to roll responses into unifying concepts and then look at the partial correlations of the resulting factor summates (a very effective technique from Dr. David Whitlark of the Marriott School of Mgmt.), or apply a Bayes Net to the raw importance scores. What we get is a map that lays out the mental structure of the consumer brand choice in the fresh-squeezed orange juice space.

[subheadline]The Weighted Consumer Decision Map[/subheadline]

The Weighted Consumer Decision Map for premium orange juice

According to Means-End theory, to succeed in this marketplace, a brand needs to be linked to and activate one of these “chains” that connect brand attributes to underlying desired consumer end states. How is Minute Maid doing in linking their brand into the map above? Let’s consider brand performance scores from the survey relative to the ladders above:

[graphic_chart img_preview="https://www.merkleinc.com/sites/default/files/Brand-Performance-OJ-460x229.png" text="+ Expand Chart" title="Brand Performance" img="https://www.merkleinc.com/sites/default/files/Brand-Performance-OJ-700x348.png" width="100%"][/graphic_chart]

Minute Maid seems to be struggling in the brand strategy battle because of its inability to be superior in linking its brand into any of the key motivational consumer choice chains. 

Is there a chink in the armor of its competitors? Well, Minute Maid does seem in striking distance should it take a “Good Value” positioning and seek to own that spot. This isn’t surprising, given the free brand associations of the term “Minute Maid”:

[subheadline]The Brand Mindset[/subheadline]

What is the first word that comes to mind when you think of Minute Maid?

Words associated with the brand Minute Maid and its orange juice

Should Minute Maid go for this positioning, the above consumer choice map can also provide analytically derived guidance to the creative team, including:

  • What makes up “good value” in the minds of consumers, and
  • As the concept “good value” is portrayed, it needs to be provided in a context of “good decision” and “good steward/family security” to be maximally effective. 

Other positions are of course possible, but they would take time and treasure to get there, as there is much more of an uphill battle for the other chains. You could also try to create new chains, but those connections would need to be created from scratch in the consumer mind — once again, time and treasure. For the time being, though, it seems that Minute Maid is taking the head-on assault.

Although orange juice is a fascinating industry to review, this is merely an example of a great new trend — the use of analytics to support and inform pure strategy. Should we call it “strategic analytics”? Look forward to seeing you on this new journey.

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