marketing metrics & audits
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Marketing Metrics & Audits. Hifni Alifahmi Email: [email protected] & [email protected]. The Marketing Control Process. Performance Measurement. Performance Diagnosis. Corrective Action. Goal Setting. What do we want to achieve?. What is happening?. Why is it happening?. - PowerPoint PPT PresentationTRANSCRIPT
Marketing Metrics & Audits
Hifni AlifahmiEmail: [email protected] & [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
Source: Philip Kotler, Siew Meng Leong, Swee Hoon Ang, Chin Tiong Tan, Marketing Management: An Asian Perspective, 1996: 942.
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
Source: Philip Kotler, Siew Meng Leong, Swee Hoon Ang, Chin Tiong Tan, Marketing Management: An Asian Perspective, 1996: 948.
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
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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
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
Success Trajectories
Success & Disaster Trajectory
1x .1x10x
10%
20%
4%
8%
16%
Success & Disaster Trajectory
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
Disaster Trajectories
1x .1x10x
10%
20%
4%
8%
16%