SLICE^©

History

H K Ball and Associates for many years has made forecasts for clients by first predicting the sales of its competitors within a market in a mathematical model. If the sales forecasts of the client were too ambitious, it could quickly be seen in the reduction in future sales of competitors, which usually doesn't happen in the real world. The competitors will react in some way to either prevent it, or to cause your client to lose a lot of profit margin in return for his increased market share. This device tended to produce more realistic forecasts but it also raised unanswerable questions about what actually caused changes in market share.
In 1974 HKB devised a mechanism for inserting weighted market share factors into the computerized equation . With this device, the factors (Figure 1) of each competitor could be graded and based on those grades, now and future, market share could be calculated. By adjusting the client dollar investments to be made in each factor, market shares could be predicted for each market strategy. On paper this looked great, but it raised many many more questions. What is the relative importance of each market factor? How does it differ between product, geographic, and outlet segments? How good is our competition relative to ourselves in each factor in each segment? What are the interrelationships between market segments?

During the ensuing ten years we performed many market analyses of this kind and developed a good experience and intuitive base. However the data was ponderous. While a market segment including five year projections for all competitors could be shown on one page, there might be 10,000 segments, some adjacent, some overlapping, some partially exclusive. It was difficult for management to integrate all this data into a single plan. There needed to be some way to see 50 or 100 pages of data represented on a single page, so that a manager could see the impact of them all at once. To meet this problem we have developed slice^©.

What It Is

Slice^© is a computer driven system that projects market shares of all competitors into bar charts placed on maps. If the US is used, this essentially places 50 pages of numbers on one page in graphic form. Figure 2 shows a map of market shares for XYZ Company for all products, all users and all outlets. The overall size of the pies depict the size of markets for each geographic area. The radius of each slice^© reflects the rate at which each competitor is expected to grow during the forecast period (in this case 5 years).

The typical situation would be to look at multiple maps on the screen at the same time (Figure 3). The maps quickly gives a feel for the relative strengths of competitors in each market. Actuals for each competitor are shown at the bottom of the map as the mouse is dragged over the bar charts. Projections for 5 years down the road are shown by pressing the control key.

Clicking the right button on any bar chart group gives the Marketing Strategy Tool for that particular market, as shown in Figure 4. These charts essentially replace a 1000 page market strategy document, doing it our old way.

The Marketing Strategy Tool is used to literally develop market strategies for each market and instantly calculate the resultant market shares for each competitor. And since the market strength factors are common to each market, it is possible to jump from market to market from moment to moment. It has been our experience that this is the way marketing managers think. The process enables them to relate the strategy in one market to its impact on other markets, which he could never do before flipping through the hundreds of pages.

The bottom left chart is a projection, based on a lot of assumptions as to what the market shares of each competior will be over the next 5 years. The bottom right is the relative strength

The upper left chart is the place for entering the various market strategies (Figure 5). All of the historic share data appears for each competitor, along with the comparable market factor data. By
trying different strategies, representing allocations of money and manapower, different projections appear for each competitor Figure 6. As the adjustments are made, the map indicates the overall pattern.

Probe

As marketing strategies begin to evolve it is vital to have exchanges with other management and with key salesmen in the field. This is done with one click for each key man on Probe (Figure 6). This sends exactly what is on the screen to any and all personnel clicked, and hardcopy if needed. All can remotely, at the same time, look at and manipulate what is on the screen, including the salesman in the field with his laptop.

How It Makes Money

Marketing planning involves a tremendous number of variables, many of which are guesses. This system enables management to see the approximate magnitude of the consequences of its guesses quickly, in order to make other better guesses. It also makes obvious the nature of added competitor data to be collected to better measure the effects of these guesses. As the plans are carried out and competitor reaction becomes more clear, the maps can be regenerated and new guesses made. The differences in profits in being able to select from more options, make adjustments earlier, and minimize losses in marginal segments can be very large.