Session 6 MG 220 Marketing Management BBA

1. Part 2: Capturing Market Insights > Measuring Marketing Productivity > Forecasting and Demand Measurement Class Presentation | Session 6 | 25 Aug 2010

2. Measuring Marketing ProductivityConcept Accountability of Marketing programs & Marketing Management Marketers should: Be able to justify the marketing expenditures understand and analyze “financials” of their activities Review and analyze all kind of financial data particularly related to their activities MG 220 Marketing Management 2

3. Measuring Marketing ProductivityApproaches 2 Key Approaches: Marketing Metrics Marketing-Mix Modeling MG 220 Marketing Management 3

4. Measuring Marketing ProductivityMarketing Metrics Marketing Metrics is the set of measures that helps firms to quantify, compare and interpret their marketing performance Used by marketers to design programs Used by top management to decide on allocations MG 220 Marketing Management 4

5. Measuring Marketing ProductivityMeasuring Marketing Plan Performance Four key tools used: Sales Analysis Market Share Analysis Marketing Expense-to-sales Analysis Financial Analysis MG 220 Marketing Management 5

6. Measuring Marketing ProductivityMeasuring Marketing Plan Performance 1. SALES ANALYSIS Consists of measuring and evaluating actual sales in relation to goals Sales Variance Analysis measures relative contribution of different factors to a gap in sales performance Microsales Analysis looks at specific products, territories that failed to produce results MG 220 Marketing Management 6

7. Measuring Marketing ProductivityMeasuring Marketing Plan Performance 2. MARKET SHARE ANALYSIS How well company is performing compared to competitors Overall Market Shareis the company’s sales expressed as a percentage of total market sales Served Market Shareis the company’s sales expressed as a percentage of total sales in served market 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) Served Market Share is always greater than Overall MG 220 Marketing Management 7

8. Measuring Marketing ProductivityMeasuring Marketing Plan Performance 2. MARKET SHARE ANALYSIS (…contd) Relative Market Shareis the company’s market share compared to its largest competitor If <100: company is follower If 100: tie as market leader If >100: company is market leader Limitations in Market Share Analysis Outside factors affect everyone equally? Company’s performance against overall average of its competitors New firm entering => dec. in market share (its not bad performance) If market share is engineered to focus away from unprofitable segments anomalies MG 220 Marketing Management 8

9. Measuring Marketing ProductivityMeasuring Marketing Plan Performance 3. MARKETING EXPENSE-TO-SALES ANALYSIS Key ratio to be analyzed Very important to see its variance, cause and effect etc. MG 220 Marketing Management 9

10. Measuring Marketing ProductivityMeasuring Marketing Plan Performance 4. Financial Analysis Financial ratios should be reviewed to understand where the performance is coming from MG 220 Marketing Management 10

11. Measuring Marketing ProductivityMarketing-Mix Modeling See the 4Ps Financially Review all data related to 4Ps and understand effects of different marketing activities Non-financial activity to be done primarily by marketing team MG 220 Marketing Management 11

12. Forecast and Demand MeasurementConcept Review concepts related to demand in more depth Focus on analysis and forecasting MG 220 Marketing Management 12

13. QUIZ # 1 | 23 Aug 2010 RESULTS MG 220 Marketing Management 13

14. Part 2: Capturing Market Insights > Forecasting and Demand Measurement > Review of Part 2 Class Presentation | Session 7 | 25 Aug 2010