Marketing Metrics & Audits

Marketing Metrics & Audits

Hifni AlifahmiEmail: [email protected] & [email protected]

mailto:[email protected]

mailto:[email protected]

The Marketing Control Process

What do we want to achieve?

What is happening?

Why is it happening?

What should we

do about it?

Source: Philip Kotler, Siew Meng Leong, Swee Hoon Ang, Chin Tiong Tan, Marketing Management: An Asian Perspective, 1996: 941.

Goal Setting Performance Measurement

Performance Diagnosis

Corrective Action

Marketing AuditMarketing Metrics

Marketing Research

Types of Marketing Control


Type of Control

Prime Responsibility Purpose of Control Approaches

Annual Plan Control

Top ManagementMiddle Management

To examine whether the planned results are being achieved

Sales analysisMarket-share analysisSales-to-expense ratioFinancial analysis

Profitability Control

Marketing Controller To examine where the company is making & losing money

Profitability by: product, territory, customer, segment, trade channel, order size

Efficiency Control

Line & Staff ManagementMarketing Controller

To evaluate & improve the spending efficiency and impact of marketing expenditures

Efficiency of: salesforce, advertising, sales promotion, distribution

Strategic Control

Top ManagementMarketing Auditor

To examine whether the company is pursuing its best opportunities with respect to markets, products, and channels

Marketing-effectiveness rating instrumentMarketing auditMarketing excellence reviewCompany ethical and social responsibility review

Financial Model of RONW

12.5%

Return on assets

Financial leverage

Return on net worth (RONW)

2.64.8%= =x

Net profits------------------Total assets

Total assets------------------

Net worth

Profits------------------

Net worth3.2%

1.5%Net profits

------------------Net sales

Net sales------------------Total assets

Profit margin


Mertics is a measuring system that quantifies a trend, dynamic, or characteristic. In virtually all disciplines, practitioners use metrics to explain phenomena, diagnose causes, share findings, and project the results of the events.Illustrations: Share of Hearts, Minds, and Markets- Market Share- Relative Market Share- Awareness- Top of Mind

Marketing Metrics

Source: Paul W. Farris, et.al. Marketing Metrics, 2006:1, 8.

Marketing Metrics: Marketing at the Core of the Organization

Share of Hearts, Minds, and Markets

Product and Portfolio

Management

Customer Profitability

Margin and Profits

Marketing and Finance

Advertising Media and Web

Metrics

Channel Management and

Sales Force

Pricing Strategy

Promotions

The Trade

Sales Force

LogisticsOperations

Finance

Advertising Agency

Source: Marketing Metrics, 2006: 5.

A Marketing Audit is a comprehensive, systematic, independent, and periodic examination of a company’s –or business unit’s– marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance.

Four characteristic of marketing audit:Comprehensive, Systematic, Independent, Periodic.

The Marketing Audit

Source: Philip Kotler, Siew Meng Leong, Swee Hoon Ang, Chin Tiong Tan, Marketing Management: An Asian Perspective, 1996: 960-961.

Components of a Marketing Audit

Source: Philip Kotler, Siew Meng Leong, Swee Hoon Ang, Chin Tiong Tan, Marketing Management: An Asian Perspective, 1996: 962-964.

Components AspectsMarketing Environment Audit

Macro Environment: Demographic, Economic, Ecological, Technological, Political, CulturalTask Environment: Markets, Customers, Competitors, Distribution and Dealers, Suppliers, Facilitators & Marketing Firms, Publics

Marketing Strategy Audit

Business Mission, Marketing Objectives and Goals, Marketing Strategy (clear, convincing, appropriate)

Marketing Organization Audit

Formal Structure, Functional Efficiency, Interface Efficiency (Marketing & Manufacturing, R&D, Finance, Purchasing, Accounting, Legal, etc.)

Marketing System Audit

Marketing Information System, Marketing Planning System, Marketing Control, New Product Development System

Marketing Productivity Audit

Profitability Analysis (competitor’s products, markets, channels; should the company enter, expand, contract, or withdraw from any business segments?)Cost-Effectiveness Analysis (excessive/reducing cost)

Marketing Function Audit

Products, Price, Distribution, Advertising, Sales Promotion, Public Relations, and Sales Force

Marketing Strategy and

analysis

Target marketing process

Marketing Planning program development

UltimateConsumer

-Consumer-Business

Promotions to final buyer

Target market

Resellers

Purchase

Belch & Belch, 2007:39

Marketing & Promotion Process Model

Promotions to trade

Internet/ Interactive

PromotionalDecisions

- Advertising

- Direct marketing

- Interactive Marketing

- Sales Promotions

- Publicity and Public

Relations

- Personal Selling

Opportunity analysis

Competitive analysis

Target Marketing

Market Segmentation

Product Decisions

Pricing decisions

Channel of Distributions

Decisions

IdentifyingMarkets

Positioningthrough

MarketingStrategic

Selectinga Target Market

Menjual tema Cinta Menjual tema Cinta (Cindera Mata),(Cindera Mata), berupa hadiah berupa hadiah langsung bagi para penabung. langsung bagi para penabung.

Iklan hingga kompilasi lagu untuk Iklan hingga kompilasi lagu untuk album kaset bertema cintaalbum kaset bertema cinta

Tema Cinta Bank Niaga

Product-Life Cycle: Characteristics & Objectives

Source: Philip Kotler & Kevin Lane Keller, Marketing Management, 12e, 2006: 310.

Introduction Growth Maturity Decline

Sales Low sales Rapidly rising sales Peak sales Declining sales

Costs High cost per customer

Average cost per customer

Low cost per customer

Low cost per customer

Profits Negative Rising profits High profits Declining profits

Customers innovators Early adopters Middle majority Laggards

Competitors Few Growing number Stable number beginning to decline

Declining number

Marketing Objectives

Create product awareness & trial

Maximize market share

Stable number beginning to decline

Declining number

Product-Life Cycle Strategies

Source: Philip Kotler & Kevin Lane Keller, Marketing Management, 12e, 2006: 310.

Introduction Growth Maturity Decline

Product Offer a basic product

Offer product extensions, service, warranty

Diversity brands and items models

Phase out weak

Price Charge cost-plus Price to penetrate market

Price to match or best competitors’

Cut price

Distribution Build selective distribution

Build intensive distribution

Build more intensive distribution

Get selective: phase out unprofitable outlets

Advertising Build product awareness among early adopters and dealers

Build awareness and interest in the mass market

Stress brand differences and benefits

Reduce to level needed to retain hard-core loyals

Sales promotion

Use heavy sales promotion to entice trial

Reduce to take advantage of heavy consumer demand

Increase to encourage brand switching

Reduce to minimal level

Product Portfolio Trajectory Analysis

Source: Roger P. Kerin, Vijay Mahajan, P. Rajan Varadarajan, Contemporary Perspectives on Strategic Market Planning, 1990: 55.

Stars Question Marks

Cash Cows Dogs

Relative Market ShareHigh Low

High

LowMar

ket G

row

th R

ate

New Product Introduction

F

G

B

E

A

C

D

1x .1x10x

Divestment

Divestment

Present Position

Forecast Position of SBU

10%

20%

4%

8%

16%

MomentumMomentum Emas BCAEmas BCA

SWA, No 02/2007 SWA, No 05/2007

Sales Promo Corporate Ad



Cash Cows Dogs


High

LowMar

ket G

row

th R

ate

Success Trajectories

Success & Disaster Trajectory

1x .1x10x

10%

20%

4%

8%

16%

Success & Disaster Trajectory



Cash Cows Dogs


High

LowMar

ket G

row

th R

ate

Disaster Trajectories

1x .1x10x

10%

20%

4%

8%

16%

Documents

Marketing Metrics & Audits