Name- Sriram.

S 16PGM47

For years there has been a noted weakness for marketers that they have been criticized for better at
finding ways to spend their budget than measuring the spending. The improvement in the use of
marketing metrics has been listed by marketing science institute for more than decade. Trends in
ecommerce has increased on business analytics and strong partnership in marketing and finance
disciplines which has great emphasis on marketing performance. The goal setting in most important
for marketing professionals and then several practical metrics for overall success of marketing
initiatives. It is followed by discussion of supporting metrics used to evaluate each area of marketing
mix. A critical view will be taken to all these metrics. The managers must be aware of several
drawbacks in metrics. The first step in the process of marketing performance is establishing targets
and it is the main function for every manager. The strategic objective for business unit include
comprehensive end result metrics, the goals should be relevant for individual tactics. The overall
revenue growth is supported by the retailers. Also the overall strategic objective are only meaningful
when supported by individual tactics. It can be challenging when establishing a target using a specific
metric. It is very difficult to realistically set targets for marketing tactics without examining past
results. The managers are set with new guidelines for setting a performance target with new metric,
first is assess other tactics by examining metric on previous promotions. Second is setting achievable
target without benefit of experience. Use of multiple level of target is one of the best practice in goal
setting. Td Ameritrade established three levels of targets for marketing performance that are
external (most conservative), internal and stretch target (most ambitious). Hundreds of research
studies has supported that goal setting directs employee behaviour and boost performance. Small
group of researchers has identified side effects of overlying on too many aggressive goals. It is very
important in organisation for setting and communicating marketing goals. Many new managers rely
on primary or end result metrics. Intermediate metrics is helpful in pinpointing where exactly an
unsuccessful tactics needs improvement. Internal metrics draw only on data pertaining to firm in
question or channel members, whereas external metrics include data from market or combine both
internal and external data. Average items carried, CPC, cost per impression, payback period all
comes under internal. Brand awareness, brand preference, CTC, purchase intentions all comes under
external. There should be consistent setting of goals for each tactic and it should be mutually
exclusive which can lead to marketing employees choosing one goal over another arbitrarily. The
success of a tactics should be informative with level of success of underlying tactic. Profit is one of
the main objective of most business which is a starting point in setting overall goal. Beyond profit
and ROI there are several other metrics commonly used to measure overall marketing performance
like overarching targets for all areas of marketing mix and supported by metrics. Metrics are
included due to: common usage, potential value to marketers. ROI and return on marketing
investment (ROMI) focuses only on incremental profit and cost that can be attributed to a specific
actions. Payback period is closely associated with ROI. The payback period is projected length of time
until the marketing initiatives pays for itself. Payback period also ignores any profit achieved after
breakeven point and does not take into account time value of money. Another commonly used
overall metric is market share. It is a particular company’s percentage of sales of the entire market
as the company sees it. It is calculated either as percentage of total market revenue or as percentage
of total market units. It is easy to gain market share by giving away product. The most profitable
company in a market is not market share leader for more than 70 percent of time. Most of the firms
track competitive customer conversions from specific competing brands. A view of the market when
assessing market share may lead to failure to recognize future threats coming from outside the
narrow scope. The value of future profits flows associated with an individual customer over the
length of time can be predict using CLV. It is closely monitored in retention focussed business like
mobile phones and credit cards. Net promoter score is more recently developed metric designed to
quickly measure customer loyalty by asking only one question on a scale of 0 to 100 to the
customers. Customer satisfaction (CUSAT) is closely related to NPS which is often used and
increasingly criticized metric. ACSI approach involves asking customers to rate three aspects of their
experience like: level of overall satisfaction, company’s performance when compared to customer’s
expectations and performance compared to customers ideal product or service in category. Overall
relationship between CUSAT and company’s financial performance is surprisingly weak. Promotional
tactics like advertising, public relations and sponsorship are intended to increase brand awareness
and positive associations and ultimately to increases sales. Brand awareness, brand preference and
purchase intentions sequentially influence likelihood of a consumer’s purchase. Brand preference
shows the likelihood of potential customers favouring a given product. Statistical tools like conjoint
analysis can be used to measure preference. The preference is measured within the group of target
customers when looking for brand preference. Brand equity is a set of assets and liabilities
associated with a brand which adds value to the product or service. Share of voice is the portion of
total advertising activity within a product category conducted by a given brand. It is been associated
with market share particularly during economic downturns when it is easier to increase share of
voice due to competitors. The cost efficiency of promotional tactics at exposing potential customers
to brand messages is indicated through cost per impression. Customer acquisition cost measures
cost to acquire one additional customer through a given promotional tactic. Several pricing metrics
are used to evaluate a company’s success at selling products. The average unit retail price (AUR) is
the average amount spent for a particular type of item which is calculated by dividing the total sales
by the number of items sold. The retailers use this metric to compare sales across different
departments or categories. The initial mark-up factor is used by retailers to multiply by their product
cost to arrive at their initial retail price. The breadth of distribution of a particular product in an area
is shown by commodity volume. It also indicates whether customers are shopping at retailers that
currently carry the brand. Inventory is the largest asset for many retailers in their balance sheet.
Inventory turns is a key inventory productivity metric which measures how many times a company
or unit sells its inventory over a year. The percentage of revenue that stores achieve relative to their
prior year is common in retail metric which is known as same store sales. In order to compare across
retailers and shopping centres sales per square foot is used. Cannibalization is the extent of new
products sales that comes at expense of sales of existing products from same company.

To conclude the marketers can only manage what they can be measure. The goal setting is
tremendous in future. There should be specific goals for each campaign and tactic which will guide
efforts and which can ultimately improve the performance for a marketer. The individual marketing
tactics are very important to overall strategy.