This slideshow talks about the basics of marketing analytics, its meaning, advantages and disadvantages, concept of market sizing etc

1. Department of MBA
IMS Engineering College,
Ghaziabad
Marketing Analytics
UNIT 1
Introduction to Marketing Analytics
Marketing Analytics: Data Driven Techniques with Microsoft Excel
Wayne L Winston, Wiley India Pvt Ltd.

2. Marketing Analytics – Meaning
• Marketing analytics is the practice of measuring
and analyzing data and metrics (parameters) to
understand the impact of marketing activities,
maximize ROI (Return on Investment) and
identify areas of improvement.
• Peter Drucker has said “what gets measured gets
managed”
• An effective marketing analytics practice tracks
and collects data across multiple marketing
channels and consolidates it into a single view.

3. Marketing Analytics –
Characteristics
• Marketing analytics is data driven
• Marketing analytics portrays customer insights
and trends
• Marketing analytics facilitates marketing
decision making
• Marketing analytics provides a picture of
marketing efforts of a company
• Marketing analytics requires experts to be
done properly

4. Marketing Analytics –
Advantages
• Marketing analytics is important because:
Understand customer and market trend is really
important I today’s times, marketing analytics
gives big picture trend by following every single
detail
Marketing analytics allows to easily depict the
programs / campaigns that worked / failed along
with the reasons.
Marketing analytics allows monitoring of trends
over time

5. Marketing Analytics –
Advantages
• It helps a marketer to understand its target
audience better
• It helps a marketer to understand where the
competitors are investing their efforts
• It helps a marketer to understand how well the
marketing campaigns are performing
• It helps the marketers to monitor current trends
and assess future trends
• It helps the marketer to use the data to decide
future course of action

6. Marketing Analytics –
Disadvantages
• As such, marketing analytics offers very less
disadvantages, still some of the disadvantages that
it may offer are:
Misinterpretation of market data: Collecting a lot
of data from the market is one things, interpreting
the data correctly is another
Evaluating market growth without market share:
An analysis of the market size alone is not enough
to indicate your opportunities, market share must
also be evaluated correctly

7. Marketing Analytics –
Disadvantages
Market segmentation Vs Target markets: You
must identify the segments of the market that
have potential customers for your products or
services. Few businesses can afford to market to
every single potential customer. Identify a target
market that you choose from among the available
segments, and go after that target market in a
focused manner.
Misidentifying market needs: You may
overestimate how well your competition is
meeting the customers' needs and quit before you
even try to market. You also may misidentify the
need that is being met.

8. Sources of Market Data
Sources of Market Data
Internal Sources
(within the org.)
Accounting
Information
Sales Reports
Expenditure data of
various types
Statistics of various
kinds
Primary Sources
Salesmen
Dealers
Consumers
Secondary Sources
Periodicals and
Newspapers
Govt. Publications and
Reports
Published Market
Surveys
Data released by
International agencies
INTERNAL EXTERNAL

9. The new realities of Marketing
Decision Making
• Marketing decision making relates to areas like –
sales and distribution, advertising and promotion,
supply chain management, customer service and
support etc
• Marketing decision making has undergone a
drastic change in last one decade, due to
availability of new and improved tools of data
analysis
• Marketing decisions being made today are based
on data rather than intuition
• Experience is backed with factual insights in
today’s marketing decision making process.

10. The new realities of Marketing
Decision Making
• Marketing decision making in modern times has
not remained simple anymore, it has become
complex where multiple factors play a role at
once
• Modern marketing decision are made considering
the competitors and their actions
• Marketing decisions being made today more
consumer oriented, they aim to satisfy consumers
more and more
• Data has presumed utmost importance, analytics
and marketing research has become the
foundation for making sound decisions

11. Market Sizing
• The "market size" is made up of the total number of
potential buyers of a product or service within a given
market, and the total revenue that these sales may
generate. Market sizing is the measurement of market
potential in terms of customers and revenue it can
generate for a business
• It's important to calculate and understand market size
for several reasons – Market sizing can also help you to
estimate the number of people that you may need to
hire before you launch a new product or service, rather
than "feeling your way" as you test your new market. If
you know this from the start, you can optimize your
approach to recruitment, so that you have the right
people in place when you need them.

12. Market Sizing Methods
Top Down Approach
• There are two methods that are commonly used
for market sizing: top-down and bottom-up.
• Although the top-down method is simple, it's
often unreliable and overly optimistic. It looks at
the "relevant" market size for your product or
service, and then calculates how much your
organization might earn from it.
• For example, imagine that your organization
markets learning resources to schools. Your
research shows that there are 6,000 relevant
schools in your country.

13. Market Sizing Methods
Top Down Approach
• You know that the average sale per school is
around Rs 50,000, which means that your
market size is Rs 300 million.
• Of course, this is an incredibly optimistic and
unrealistic figure. Not every school needs your
products, and they're unlikely to purchase
• A top-down approach gives you inflated data,
and you often can't rely on it to make good
decisions.

14. Market Sizing Methods
Bottom Up Approach
• The approach can be summarized in the
following steps:
Define You Target Market
Use Market Research to assess interest in your product
Calculate Potential Sales

15. Market Sizing Methods
Bottom Up Approach – Example
• You've determined that 1,800 grocery stores
might invest in your software, which costs Rs
30,000. If 100 percent of these stores purchase the
software, this is a return of Rs 54 million.
• Your organization has already estimated that it
will have to invest at least Rs 7 million to
develop, test, and market the new software.
• This investment is only 13 percent of potential
annual revenues, so the risk is low, even if the
response isn't as positive as predicted. Your
organization therefore decides to move forward
with the development of new software.