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Part 2: Capturing Market Insights<br />> Measuring Marketing Productivity<br />> Forecasting and Demand Measurement<br />C...
Measuring Marketing ProductivityConcept<br />Accountability of Marketing programs & Marketing Management<br />Marketers sh...
Measuring Marketing ProductivityApproaches<br />2 Key Approaches:<br />Marketing Metrics<br />Marketing-Mix Modeling<br />...
Measuring Marketing ProductivityMarketing Metrics<br />Marketing Metrics is the set of measures that helps firms to quanti...
Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />Four key tools used:<br />Sales Analysis<br />Ma...
Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />1. SALES ANALYSIS<br />Consists of measuring and...
Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />2. MARKET SHARE ANALYSIS<br />How well company i...
Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />2. MARKET SHARE ANALYSIS (…contd)<br />Relative ...
Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />3. MARKETING EXPENSE-TO-SALES ANALYSIS<br />Key ...
Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />4. Financial Analysis<br />Financial ratios shou...
Measuring Marketing ProductivityMarketing-Mix Modeling<br />See the 4Ps Financially<br />Review all data related to 4Ps an...
Forecasting and Demand Measurement<br />One of the major objectives of Marketing research<br />Marketing’s tasks to identi...
Forecasting and Demand MeasurementThe Measures of Market Demand<br />90 types of Demand<br />MG 220 Marketing Management<b...
Forecasting and Demand MeasurementThe Measures of Market Demand<br />Different ways of looking at “market”<br />Potential ...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />For a product is the total vo...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />MG 220 Marketing Management<b...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />MG 220 Marketing Management<b...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />Market Minimum<br />Market Po...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Forecast:<br />Only one level of expenditu...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Potential:<br />Market forecast shows dema...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Demand:<br />Company’s estimated share of...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Sales Forecast:<br />After understanding ...
Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Sales Potential:<br />Company sales poten...
Forecasting and Demand MeasurementEstimating Current Demand<br />Total Market Potential<br />Estimate: Potential number of...
Forecasting and Demand MeasurementEstimating Future Demand<br />Three-stage procedure<br />Macroeconomic forecast<br />Ind...
QUIZ # 1 | 30 Aug 2010<br />RESULTS<br />MG 220 Marketing Management<br />26<br />
Part 3: Connecting with Customers<br />> Intro to Part 3<br />Class Presentation | Session 7 | 6 Sep 2010<br />
Part 3: Connecting with CustomersAn intro and overview<br />Chap 5: Creating Customer Value, Satisfaction, and Loyalty<br ...
Part 3: Connecting with Customers<br />> Building Customer Value, Satisfaction and Loyalty<br />> Maximizing Customer Life...
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Session 6 MG 220 MBA - 2 Sep 10

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Session 6
MG 220 Marketing Management
MBA 10

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  1. 1. Part 2: Capturing Market Insights<br />> Measuring Marketing Productivity<br />> Forecasting and Demand Measurement<br />Class Presentation | Session 6 | 2 Sep 2010<br />
  2. 2. Measuring Marketing ProductivityConcept<br />Accountability of Marketing programs & Marketing Management<br />Marketers should:<br />Be able to justify the marketing expenditures<br />understand and analyze “financials” of their activities<br />Review and analyze all kind of financial data particularly related to their activities<br />MG 220 Marketing Management<br />2<br />
  3. 3. Measuring Marketing ProductivityApproaches<br />2 Key Approaches:<br />Marketing Metrics<br />Marketing-Mix Modeling<br />MG 220 Marketing Management<br />3<br />
  4. 4. Measuring Marketing ProductivityMarketing Metrics<br />Marketing Metrics is the set of measures that helps firms to quantify, compare and interpret their marketing performance<br />Used by marketers to design programs<br />Used by top management to decide on allocations<br />MG 220 Marketing Management<br />4<br />
  5. 5. Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />Four key tools used:<br />Sales Analysis<br />Market Share Analysis<br />Marketing Expense-to-sales Analysis<br />Financial Analysis<br />MG 220 Marketing Management<br />5<br />
  6. 6. Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />1. SALES ANALYSIS<br />Consists of measuring and evaluating actual sales in relation to goals<br />Sales Variance Analysis measures relative contribution of different factors to a gap in sales performance<br />Microsales Analysis looks at specific products, territories that failed to produce results <br />MG 220 Marketing Management<br />6<br />
  7. 7. Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />2. MARKET SHARE ANALYSIS<br />How well company is performing compared to competitors<br />Overall Market Share is the company’s sales expressed as a percentage of total market sales<br />Served Market Share is the company’s sales expressed as a percentage of total sales in served market<br />Served Market: All buyers and who are able and willing to buy its product (generally a part of total market, because this is only for company’s product)<br />Served Market Share is always greater than Overall<br />MG 220 Marketing Management<br />7<br />
  8. 8. Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />2. MARKET SHARE ANALYSIS (…contd)<br />Relative Market Share is the company’s market share compared to its largest competitor<br />If <100: company is follower<br />If 100: tie as market leader<br />If >100: company is market leader<br />Limitations in Market Share Analysis<br />Outside factors affect everyone equally?<br />Company’s performance against overall average of its competitors<br />New firm entering => dec. in market share (its not bad performance)<br />If market share is engineered to focus away from unprofitable segments<br />anomalies<br />MG 220 Marketing Management<br />8<br />
  9. 9. Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />3. MARKETING EXPENSE-TO-SALES ANALYSIS<br />Key ratio to be analyzed<br />Very important to see its variance, cause and effect etc.<br />MG 220 Marketing Management<br />9<br />
  10. 10. Measuring Marketing ProductivityMeasuring Marketing Plan Performance<br />4. Financial Analysis<br />Financial ratios should be reviewed to understand where the performance is coming from<br />MG 220 Marketing Management<br />10<br />
  11. 11. Measuring Marketing ProductivityMarketing-Mix Modeling<br />See the 4Ps Financially<br />Review all data related to 4Ps and understand effects of different marketing activities<br />Non-financial activity to be done primarily by marketing team<br />MG 220 Marketing Management<br />11<br />
  12. 12. Forecasting and Demand Measurement<br />One of the major objectives of Marketing research<br />Marketing’s tasks to identify opportunities and also give measured forecasts<br />MG 220 Marketing Management<br />12<br />
  13. 13. Forecasting and Demand MeasurementThe Measures of Market Demand<br />90 types of Demand<br />MG 220 Marketing Management<br />13<br />
  14. 14. Forecasting and Demand MeasurementThe Measures of Market Demand<br />Different ways of looking at “market”<br />Potential Market<br />Set of consumers who profess a sufficient level of interest in a market offer (able to buy?)<br />Available Market<br />Set of consumers who have interest, income and access to a particular offer. (Qualified Available Market => Eligible or allowed)<br />Target Market<br />Part of Qualified Available market, the company decides to pursue (most attractive segment)<br />Penetrated Market<br />Set of consumers who are buying the company’s products<br />MG 220 Marketing Management<br />14<br />
  15. 15. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />For a product is the total volume that would be bought:<br /> - by a defined customer group<br /> - in a defined geographical area<br /> - in a defined time period<br /> - in a defined marketing environment<br /> - under a defined marketing program<br />It is not a number but a function (correlation) of stated conditions<br />MG 220 Marketing Management<br />15<br />
  16. 16. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />MG 220 Marketing Management<br />16<br />
  17. 17. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />MG 220 Marketing Management<br />17<br />
  18. 18. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />Market Minimum<br />Market Potential<br />Marketing Sensitivity of Demand (Demand’s reaction to marketing effort)<br />Expansible market (demand reacts highly to marketing)<br />Non-expansible market (demand reacts less to marketing)<br />Market Penetration Index (current level of market demand to potential demand)<br />Share Penetration Index (current level of market to its potential market share)<br />MG 220 Marketing Management<br />18<br />
  19. 19. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Forecast:<br />Only one level of expenditure is possible (or practically done)<br />Market demand corresponding to that level is Market Forecast<br />MG 220 Marketing Management<br />19<br />
  20. 20. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Potential:<br />Market forecast shows demand at a limited level only<br />Market Potential is the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.<br />Market Demand with maximum possible marketing expenditure<br />MG 220 Marketing Management<br />20<br />
  21. 21. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Demand:<br />Company’s estimated share of market demand at alternative levels of company marketing effort in a given time period<br />Relating demand to competitors, company’s image etc.<br />MG 220 Marketing Management<br />21<br />
  22. 22. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Sales Forecast:<br />After understanding company demand,<br />Choose a level of marketing effort<br />Company sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.<br />Based on this:<br />Sales Quota is the sales goal set for a product line, company division. Assigned to: stimulate sales effortsGenerally higher than Sales Forecast<br />Sales Budget is conservative estimate of expected volume of sales and is used for internal decisions like purchasing, cash flow etc.Generally lower than Sales Forecast<br />MG 220 Marketing Management<br />22<br />
  23. 23. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Sales Potential:<br />Company sales potential is the sales limit approached by company demand as company marketing effort increases relative to that of competitors<br />MG 220 Marketing Management<br />23<br />
  24. 24. Forecasting and Demand MeasurementEstimating Current Demand<br />Total Market Potential<br />Estimate: Potential number of buyers X average quantity purchase by a buyer X price<br />Area Market Potential<br />Problem of selecting best territories and allocating marketing budgets<br />Industry Sales and Market Shares<br />Identifying industry and competitors’ sales figures<br />MG 220 Marketing Management<br />24<br />
  25. 25. Forecasting and Demand MeasurementEstimating Future Demand<br />Three-stage procedure<br />Macroeconomic forecast<br />Industry forecast (based on Sr. 1)<br />Company sales forecast (based on Sr. 2)<br />How to? And information Bases<br />What People Say<br />Survey Consumers<br />Salesforce opinions<br />Experts’ (distributors, retailers, consultants) opinions<br />What People Have Done<br />Past-Sales Analysis<br />What People Do<br />Test-Marketing<br />MG 220 Marketing Management<br />25<br />
  26. 26. QUIZ # 1 | 30 Aug 2010<br />RESULTS<br />MG 220 Marketing Management<br />26<br />
  27. 27. Part 3: Connecting with Customers<br />> Intro to Part 3<br />Class Presentation | Session 7 | 6 Sep 2010<br />
  28. 28. Part 3: Connecting with CustomersAn intro and overview<br />Chap 5: Creating Customer Value, Satisfaction, and Loyalty<br />Chap 6: Analyzing Consumer Markets<br />Chap 7: Analyzing Business Markets<br />Chap 8: Identifying Market Segments and Targets<br />MG 220 Marketing Management<br />28<br />
  29. 29. Part 3: Connecting with Customers<br />> Building Customer Value, Satisfaction and Loyalty<br />> Maximizing Customer Lifetime Value<br />> Cultivating Customer Relationships<br />> Customer Databases and Database Marketing<br />Class Presentation | Session 7 | 6 Sep 2010<br />
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