Modern Marketing Information & Analysis (Week 22)
The old style measurement structure of marketing
communications must be designed to match the specific needs of the organisation
at hand, but in one simple format. This splits the material into three groups
otherwise known as the “3 Stage Process”;
- Review of the marketing environment – A study of the organisation's markets, customers, competitors and the overall economic, political, cultural and technical environment; covering developing trends, as well as the current situation.
- Review of the detailed marketing activity – A study of the company's marketing mix; in terms of the 7 Ps (see below)
- Review of the marketing system – A study of the marketing organization, marketing research systems and the current marketing objectives and strategies. The last of these is too frequently ignored. The marketing system itself needs to be regularly questioned, because the validity of the whole marketing plan is reliant upon the accuracy of the input from this system, and `garbage in, garbage out' applies with a vengeance.
- Portfolio Planning: In addition, the coordinated planning of the individual products and services can contribute towards the balanced portfolio.
- 80:20 Rule: To achieve the maximum impact, the marketing plan must be clear, concise and simple. It needs to concentrate on the 20 percent of products or services, and on the 20 percent of customers, that will account for 80 percent of the volume and 80 percent of the profit.
- 7 Ps: Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 Ps can sometimes divert attention from the customer, but the framework they offer can be very useful in building the action plans.
Goals (or objectives) state what is
to be achieved and when results
are to be accomplished, but they do not state "how" the results are
to be achieved.
"They typically relate to what products (or services) will
be where in what markets (and must be realistically based on customer behavior
in those markets). They are essentially about the match between those
"products" and "markets." Objectives for pricing,
distribution, advertising and so on are at a lower level, and should not be
confused with marketing objectives. They are part of the marketing strategy
needed to achieve marketing objectives. To be most effective, objectives should
be capable of measurement and therefore "quantifiable." This
measurement may be in terms of sales volume, money value, market share, percentage
penetration of distribution outlets and so on".
"The marketing objectives must usually be based, above all, on the
organization's financial objectives; converting these financial measurements
into the related marketing measurements. In principle, these strategies describe how the
objectives will be achieved. The 7 Ps are a useful framework for deciding how
the company's resources will be manipulated (strategically) to achieve the
objectives. However, they are not the only framework, and may divert attention
from the real issues. The focus of the strategies must be the objectives to be
achieved — not the process of planning itself. Only if it fits the needs
of these objectives should you choose, as we have done, to use the framework of
the 7 Ps."
"The strategy statement can take the form of a purely verbal description of the
strategic options which have been chosen. Alternatively, and perhaps more
positively, it might include a structured list of the major options chosen. One aspect of strategy which is often overlooked is that of
"timing." Exactly when it is the best time for each element of the
strategy to be implemented is often critical. Taking the right action at the
wrong time can sometimes be almost as bad as taking the wrong action at the
right time. Timing is, therefore, an essential part of any plan; and should
normally appear as a schedule of planned activities. Having completed this
crucial stage of the planning process, you will need to re-check the
feasibility of your objectives and strategies in terms of the market share,
sales, costs, profits and so on which these demand in practice. As in the rest
of the marketing discipline, you will need to employ judgment, experience,
market research or anything else which helps you to look at your conclusions
from all possible angles."
Econometrics
Activity that doesn’t add
to the bottom line is increasingly difficult to justify. In this climate,
spending on communications can seem like a luxury. So wouldn’t it be easier if
there were a way to measure the payback from your marketing communications? There is – it’s called econometrics. With the
right data, econometrics can measure the impact your communications have on sales
and profit. It can even forecast the effects of future campaigns. Econometrics is not new. UK marketers have been
using it for over 25 years, and the methodology behind it goes back much
further. Yet even after all this time, econometrics is not as widely used as it
could and perhaps should be.
To find out more about econometrics
please visit http://www.ipaeffectivenessawards.co.uk/write/Documents/Econometrics.pdf
for an extensive review. (Source:
http://www.ipaeffectivenessawards.co.uk/Econometrics)
Tracking Studies
Each brand faces different issues, which often required
customized tracking studies. Survey Gizmo recommends the following aspects
require specific measurement;
- Awareness: This is often tracked through measures of brand recall and recognition. A brand that it is easily recalled in certain situations is more likely to be considered for purchase than one that is only recognized when it is prompted to the consumer.
- Usage: This can be measured through recency, frequency of usage, and total spending in the brand, and product category. These brand tracking measures, tell us about consumer shopping behavior and preferences. They are also indicators of market share and share of wallet.
- Brand Attitudes and Perceptions: This is usually captured through questions related to brand image and associations that consumers develop based on their experience with the brand and exposure to its message through PR, advertising and promotional programs. Brand associations include beliefs about product- and non-product related attributes and benefits, as well as perceptions related to price and value. Some brand associations are stronger than others, are more easily recalled and are appealing enough that they become a driver in a consumer’s decision to buy a brand. Many times, attitudes towards a brand go beyond the product to include attitudes toward the company. We are all aware how Toyota’s image has been damaged, not only by the car recall due to defective accelerator pedals in several car models, but more so by how the company failed to promptly notify car owners. A before-and-after-the-recall study conducted by Lightspeed and Ad Age, showed how the number of Toyota owners that consider the brand reliable has decreased significantly, indicating how fast a brand image can weaken when a company doesn’t react quickly enough.
- Purchase Intent: Measures of likelihood to buy a brand or switch to a competitor are also indicators of brand health and should be part of brand tracking studies. These questions should be put in context regarding specific product or brand, reason for the purchase, time, channel, price and other relevant factors to the purchase decision, so they can be predictive of actual purchase behaviour.
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