Planning Metrics & Implementation Control

1. Planning Metrics & Implementation Control MKT 460 (Strategic Marketing) TaufiqueHossain

2. Tools for measuring marketing progress • Metrics: Used to establish measures for specific performance-related outcomes and • activities and then track results against measures • Forecasts: Used to predict future sales and costs as checkpoints for measuring progress • Budgets: Used to allocate funding across programs in specified periods and then track expenditures during implementation • Schedules: Used to plan and coordinate the timing of tasks and programs

3. Planning metrics Sales force The trade Advertising agency Logistics Customers and market research Finance Operations

4. Planning metrics • Marketing dashboard: A computerized, graphical or digital presentation that helps management track important metrics overtime and spot deviation from the plan.

5. Identifying metrics • Marketing: • To acquire new customers: Measure number or percentage of new customers acquired by month, quarter, and year. • To retain current customers: Measure number or percentage of customers who continue purchasing during a set period. • To increase market share: Measure dollar or unit sales divided by total industry sales during a set period. • Financial: • To improve profitability: Measure gross or net margin for a set period by product, line, channel, marketing program, or customer. • To reach breakeven: Measure the number of weeks or months until a product’s revenue equals and begins to exceed costs. • Societal: • To make products more environmentally friendly: Measure the proportion of each products parts that are recyclable or have been recycled during a set period. • To build awareness of a social issue: Research awareness among the target audience after the program or a set period.

6. Identifying metrics • Customer becomes aware of an offering: Measure customer awareness of offering and competing offers by segment. • Customer learns more about an offering: Measure number of information packets or catalogs requested, number of hits on Web site or YouTube video, number of people who visit store or showroom • Customer has a positive attitude toward the offering: Measure customer attitudes towards the offer and competing offers, by segment; feedback from hotlines, blogs, letters, e-mails, channel, etc. • Customer tries the offering: Measure number of people who receive free samples or redeem coupons for trials. • Customer buys the offering: Measure sales by transaction. segment. channel, payment method; conversion from trials and information requests. • Customer is satisfied: Measure customer satisfaction by offering and by segment; satisfaction feedback from hotlines, blogs. letters. meets. e-mails, channel, etc. • Customer becomes loyal: Measure customer retention and churn; size and frequency of repeat purchases; utilization of frequent buyer program

7. Using metrics • Expected outcomes • Historical results • Competitive or industry outcomes • Environmental influences Return on investment in marketing (ROMI) = Net profit attributed to marketing activity/Marketing investment

8. Forecasting sales & costs • Forecast Types of forecasts: • Forecast of market and segment sales • Forecasts of company product sales • Forecast of cost of sales • Forecast of sales and costs by channel

9. Sources and tools for forecasting data • Regression analysis • Econometrics model • Time series method • Smoothing and decomposition • Judgmental method • Sales force estimates • Executive opinion • Delphi method • Online prediction markets

10. Sources and tools for forecasting data • Sales force estimates: Composite projection based on estimates made by sales personnel convenient but accuracy depends on instincts, experience, and objectivity of salespeople. • Executive opinion: Composite projection based on estimates made by managers; convenient but accuracy depends on instincts, experience, and objectivity of managers • Delphi method: Composite projection based on successive rounds of input from outside experts, who ultimately come to consensus on estimates; time consuming but sometimes helpful when forecasting new-product or new-market sales. • Online prediction market: Composite projection based on combined judgment of employees or stakeholders who indicate their confidence in certain marketing predictions through online “trading” in a mock stock market; efficient but may involve bias toward longer-term predictions.

11. Budgeting • Affordable budgeting • Percentage of sales budgeting • Competitive parity budgeting • Objective and task budgeting method

12. Budgets within marketing budget • Budgeting for each marketing-mix program • Budget for each brand, segment or market • Budgets for each region of geographic division • Budgets for each division or product manager • Budget summarizing overall marketing

13. Controlling marketing plan implementation • Annual plan control • Profitability control • Productivity control • Strategic control

14. Planning metrics and implementing control • Scheduling marketing Plan Programs • Applying Control • Preparing contingency plans