Session 6 MG 220 MBA - 2 Sep 10
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Transcript of Session 6 MG 220 MBA - 2 Sep 10
MG 220 Marketing ManagementMBA 10
Fall 2010
Muhammad Talha Salam, Asst. [email protected]
Access it online: www.slideshare.net/talhasalam
Part 2: Capturing Market Insights
> Measuring Marketing Productivity> Forecasting and Demand Measurement
Class Presentation | Session 6 | 2 Sep 2010
MG 220 Marketing Management 2Access it online: www.slideshare.net/talhasalam
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 3Access it online: www.slideshare.net/talhasalam
Measuring Marketing ProductivityApproaches
• 2 Key Approaches:
–Marketing Metrics–Marketing-Mix Modeling
MG 220 Marketing Management 4Access it online: www.slideshare.net/talhasalam
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 5Access it online: www.slideshare.net/talhasalam
Measuring Marketing ProductivityMeasuring Marketing Plan Performance
• Four key tools used:1.Sales Analysis2.Market Share Analysis3.Marketing Expense-to-sales Analysis4.Financial Analysis
MG 220 Marketing Management 6Access it online: www.slideshare.net/talhasalam
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 7Access it online: www.slideshare.net/talhasalam
Measuring Marketing ProductivityMeasuring Marketing Plan Performance
2. MARKET SHARE ANALYSIS– How well company is performing compared to
competitors– Overall Market Share is the company’s sales
expressed as a percentage of total market sales
– Served Market Share is 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 8Access it online: www.slideshare.net/talhasalam
Measuring Marketing ProductivityMeasuring Marketing Plan Performance
2. MARKET SHARE ANALYSIS (…contd)– Relative Market Share is 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 9Access it online: www.slideshare.net/talhasalam
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 10Access it online: www.slideshare.net/talhasalam
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 11Access it online: www.slideshare.net/talhasalam
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 12Access it online: www.slideshare.net/talhasalam
Forecasting and Demand Measurement
• One of the major objectives of Marketing research
• Marketing’s tasks to identify opportunities and also give measured forecasts
MG 220 Marketing Management 13Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementThe Measures of Market Demand• 90 types of Demand
MG 220 Marketing Management 14Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementThe Measures of Market Demand• Different ways of looking at “market”
• Potential MarketSet of consumers who profess a sufficient level of interest in a market offer (able to buy?)
• Available MarketSet of consumers who have interest, income and access to a particular offer. (Qualified Available Market => Eligible or allowed)
• Target MarketPart of Qualified Available market, the company decides to pursue (most attractive segment)
• Penetrated MarketSet of consumers who are buying the company’s products
MG 220 Marketing Management 15Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Market Demand:
For a product is the total volume that would be bought:- by a defined customer group- in a defined geographical area- in a defined time period- in a defined marketing environment- under a defined marketing program
• It is not a number but a function (correlation) of stated conditions
MG 220 Marketing Management 16Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Market Demand:
MG 220 Marketing Management 17Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Market Demand:
MG 220 Marketing Management 18Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Market Demand:– Market Minimum– Market Potential– Marketing Sensitivity of Demand (Demand’s
reaction to marketing effort)• Expansible market (demand reacts highly to marketing)
• Non-expansible market (demand reacts less to marketing)
– Market Penetration Index (current level of market demand to potential demand)
– Share Penetration Index (current level of market to its potential market share)
MG 220 Marketing Management 19Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Market Forecast:– Only one level of expenditure is possible
(or practically done)
–Market demand corresponding to that level is Market Forecast
MG 220 Marketing Management 20Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Market Potential:–Market forecast shows demand at a
limited level only
–Market Potential is the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.
– Market Demand with maximum possible marketing expenditure
MG 220 Marketing Management 21Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Company Demand:– Company’s estimated share of market
demand at alternative levels of company marketing effort in a given time period
– Relating demand to competitors, company’s image etc.
MG 220 Marketing Management 22Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Company Sales Forecast:
– After understanding company demand,– Choose a level of marketing effort
– Company sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.
– Based on this:– Sales Quota is the sales goal set for a product line, company
division. Assigned to: stimulate sales effortsGenerally higher than Sales Forecast
– 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
MG 220 Marketing Management 23Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementVocabulary for Demand Measurement• Company Sales Potential:– Company sales potential is the sales
limit approached by company demand as company marketing effort increases relative to that of competitors
MG 220 Marketing Management 24Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementEstimating Current Demand• Total Market Potential– Estimate: Potential number of buyers X average
quantity purchase by a buyer X price
• Area Market Potential– Problem of selecting best territories and
allocating marketing budgets
• Industry Sales and Market Shares– Identifying industry and competitors’ sales
figures
MG 220 Marketing Management 25Access it online: www.slideshare.net/talhasalam
Forecasting and Demand MeasurementEstimating Future Demand• Three-stage procedure
1. Macroeconomic forecast2. Industry forecast (based on Sr. 1)3. Company sales forecast (based on Sr. 2)
• How to? And information Bases– What People Say
• Survey Consumers• Salesforce opinions• Experts’ (distributors, retailers, consultants) opinions
– What People Have Done• Past-Sales Analysis
– What People Do• Test-Marketing
MG 220 Marketing Management 26Access it online: www.slideshare.net/talhasalam
QUIZ # 1 | 30 Aug 2010
• RESULTS
MG 220 Marketing ManagementMBA 10
Fall 2010
Muhammad Talha Salam, Asst. [email protected]
Access it online: www.slideshare.net/talhasalamClass Presentation | Session 7 | 6 Sep 2010
Part 3: Connecting with Customers
> Intro to Part 3
MG 220 Marketing Management 28Access it online: www.slideshare.net/talhasalam
Part 3: Connecting with CustomersAn intro and overview
Chap 5: Creating Customer Value, Satisfaction, and Loyalty
Chap 6: Analyzing Consumer Markets
Chap 7: Analyzing Business Markets
Chap 8: Identifying Market Segments and Targets
MG 220 Marketing ManagementMBA 10
Fall 2010
Muhammad Talha Salam, Asst. [email protected]
Access it online: www.slideshare.net/talhasalamClass Presentation | Session 7 | 6 Sep 2010
Part 3: Connecting with Customers
> Building Customer Value, Satisfaction and Loyalty
> Maximizing Customer Lifetime Value> Cultivating Customer Relationships> Customer Databases and Database
Marketing