Marketing Metrics

Lecture 4aChapter 3 (Sharp, 2013)

BHO1171 – Session 4 Slide 2

Why marketers need metrics

Are metrics meaningful?Marketing managers need measurement to

assess and guide their marketing actions. Marketing metrics let managers know how the

brand and business is performing; and marketing metrics can provide diagnostic information on how to improve things.

BHO1171 – Session 4 Slide 3

Why marketers need metrics

BHO1171 – Session 4 Slide 4

A system of marketing metrics

Why measure market-based assets? To understand and correctly evaluate the longer-

term effects of marketing activity. They are also needed to evaluate brand

performance• Because some marketing activity may potentially erode

these assets, and so erode future sales, while still generating acceptable sales and/or profits today.

BHO1171 – Session 4 Slide 5

A system of marketing metrics

Marketing metrics describe:• Brands’ activities in the market; for example new

product launches, price increases, changes in pack size, and so on

• How the market is reacting to these changes; for example how buyers are buying, at what prices, and so on

• How brand’s market-based assets are holding up

Marketing Metrics give you a baseline Which can be used to make checks and balances

BHO1171 – Session 4 Slide 6

Marketing Metrics

Marketing Metrics

FinancialMetrics

Memory Metrics

BehaviouralMetrics

CustomerProfileMetrics

BHO1171 – Session 4 Slide 7

Marketing Metrics

Marketing Metrics

FinancialMetrics

Memory Metrics

BehaviouralMetrics

CustomerProfileMetrics

BHO1171 – Session 4 Slide 8

Financial metrics

Profit and profit contributionProfit marginReturn on investment (ROI)

E.g. Eloqua 10 – Marketing Metrics DashboardsCustomer value and customer lifetime value

BHO1171 – Session 4 Slide 9

Marketing Metrics

Marketing Metrics

FinancialMetrics

Memory Metrics

BehaviouralMetrics

CustomerProfileMetrics

BHO1171 – Session 4 Slide 10

Behavioural metrics Sales

How many units did you sell? Market share

Proportion of market using your brand Market penetration

Proportion of products sold in category Purchase frequency

How often do consumers buy your brand? Share of category requirements (SCR)

Of an average consumer’s purchases in a time period, what proportion were for your brand?

BHO1171 – Session 4 Slide 11

Behavioural metrics

BHO1171 – Session 4 Slide 12

Behavioural metrics

Solely (100%) loyal customersDefection rateCustomer complaints and recommendations

Some of this data can be gathered using loyalty programmes such as Flybuys/Airmiles/Nectar

BHO1171 – Session 4 Slide 13

Marketing Metrics

Marketing Metrics

FinancialMetrics

Memory Metrics

BehaviouralMetrics

CustomerProfileMetrics

BHO1171 – Session 4 Slide 14

Memory metrics

Brand awarenessBrand image associationsMental availabilityAttitudeCustomer satisfaction and service qualityIntention to buy

BHO1171 – Session 4 Slide 15

Marketing Metrics

Marketing Metrics

FinancialMetrics

Memory Metrics

BehaviouralMetrics

CustomerProfileMetrics

BHO1171 – Session 4 Slide 16

Customer profile metrics

Customer profile metrics describe customers Used to help marketers identify and reach all the

different buyers in a brand’s categoryThey include metrics such as a customer’s gender,

age or income.Marketers need to understand

Who their different buyers are Where they live What media they consume How, when and where they shop.

BHO1171 – Session 4 Slide 17

Marketing activity metrics

It’s important to measure what marketing activities the company is actually doing.

Necessary for the firm to keep track of its marketing investment.

BHO1171 – Session 4 Slide 18

Physical availability metrics

Making a brand as easy to notice and buy as possible

Physical availability allows a consumer to buy and consume a product or service, so physical availability metrics include:

• Number of distribution points• House of opening• Geographical coverage of distribution points• Geographical coverage of delivery points• Number of display points in store• Number of shelves devoted to the brand.

BHO1171 – Session 4 Slide 19

Marketing benchmarks

Need to use other brands as a benchmark for your brand’s performance on marketing metrics

But don’t forget to account for: The Duplication of Purchase (DoP) Law The Double Jeopardy Law

Marketing Research

Lecture 4bChapter 4 (Sharp, 2013)

BHO1171 – Session 4 Slide 21

The central role of market research

Market research is used to understand What consumers know and think, How they behave How a company’s efforts are being received Opportunities for growth

Market research allows us to: Identify marketing opportunities and problems Evaluate marketing actions Monitor marketing activities Monitor market performance

BHO1171 – Session 4 Slide 22

The central role of market research

BHO1171 – Session 4 Slide 23

Commissioning research—the brief

Research objectives describe what the research will achieve in broad terms.

Examples could include:• Determine the market potential for a new car-sharing service in

Kuwait.• Benchmark the level of customer satisfaction among our

Malaysian customers.• Identify how our brands are perceived in relation to our

competitors. A study has one overarching research objective and two or

three smaller objectives or questions. Good research objectives are linked to marketing objectives

BHO1171 – Session 4 Slide 24

Commissioning research—the brief

BHO1171 – Session 4 Slide 25

Commissioning research—the brief

Research providers develop a research proposal in response to the brief How they would conduct the research the methods they would employ the costs involved

A typical proposal discusses what sort of raw data is required and provides a few different options for conducting the research.

BHO1171 – Session 4 Slide 26

Some Indicative Costs (February 2013)

Dependent on sample size, analytical methods, etc. Focus Groups: $3,000 - 10,000 + Individual Interviews (depth ethnographic): $1,000 - 5,000 + Observational: $5,000 + Data mining: $7,000 + Questionnaire

Design = $7,000 + Analysis = $10,000 + Delivery

• Online: $3,000 - 30,000 +• Post: $4,000 - 40,000 +• Telephone: $8,000 - 40,000+• Interview: $10,000 - 50,000 +

BHO1171 – Session 4 Slide 27

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 28

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 29

Identifying the Research Objectives

Most important but difficult If you define it wrong, you get the answer wrong!

Define problems, not symptoms Eg. How do we stop customers defecting vs why

do customers defect vs how many customers are defecting

BHO1171 – Session 4 Slide 30

Develop a plan

How will you answer the question? I.e., what methodology is appropriate?

Who will do the work? Internal versus external consultants Should you use a global Agency?

• TNS, ACNeilsen etc

BHO1171 – Session 4 Slide 31

Secondary data

Data collected for some purpose other than the current research problem at hand. It may be past research projects, company records, industry reports or any other information that can be used to assist with the current research problem.

It comes from two key sources—internal and external data.

• Internal—past research projects, sales figures, marketing intelligence information.

• External—statistics, academic and industry publications

BHO1171 – Session 4 Slide 32

Knowledge of buyer behaviour

It’s important to have knowledge of patterns that can be seen in different types of data And understand the marketing science laws that

apply to them. This knowledge provides a framework

To both analyse and interpret your data Will provide potential explanations for the

patterns you may see.

BHO1171 – Session 4 Slide 33

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 34

Ways to get information

Exploratory Informs real nature of the problem, suggests possible

solutions / new ideasDescriptive

Seeks to quantify demandCausal

Tests a cause-and-effect relationship

A tongue in cheek look at how marketing research might help new products - Shreddies

BHO1171 – Session 4 Slide 35

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 36

Golden Paradigms

Quantitative research deals with numbers and answers how many, how much or how often

Qualitative research deals with feelings, attitudes and behaviours

BHO1171 – Session 4 Slide 37

Qualitative and quantitative Methods

Qualitative Data Provides in-depth, rich-in-

detail information about the motives of respondents and their thoughts and feelings.

It tends to be focused on identifying what issues exist, rather than estimating how much of a behaviour exists.

Quantitative Data Provides specific numerical

information from a representative, usually large, sample of respondents.

It is structured, usually as a pre-written questionnaire with checklists or response scales, so it can be analysed using statistical techniques.

BHO1171 – Session 4 Slide 38

Qualitative methods

Focus groupsDepth interviewsObservational researchOther approaches:

• storytelling• projective techniques• ethnographic research• reflective journals• picture collages

BHO1171 – Session 4 Slide 39

e.g. Qualitative - Focus Groups

Graeme Norton – focus group revenge

Copyright © 2012 Pearson Education

4-39

BHO1171 – Session 4 Slide 40

e.g. Qualitative - Observation

Observation is as you would expect A market research literally observes behavior E.g., Lund University observation study of

supermarket shopping behavior

BHO1171 – Session 4 Slide 41

Quantitative methods

Telephone surveysInternet surveysMail surveysIn-person surveys

BHO1171 – Session 4 Slide 42

e.g. Quantitative - Surveys

Most commonly done: Online Computer Assisted Telephone Interviewing (CATI) Face to face

• E.g. Roy Morgan Research

BHO1171 – Session 4 Slide 43

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 44

Populations and samples

A population is the group of people to be studied. Eg. Consumers planning to buy a new car in next 3 months

A sample is the group of respondents you research from the population.

PopulationSample

BHO1171 – Session 4 Slide 45

Sampling

Customer samplesSampling considerationsHow you sampleSample sizeRepresentativeness

BHO1171 – Session 4 Slide 46

CATI Fieldwork in action

BHO1171 – Session 4 Slide 47

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 48

What Affects the Quality of Research?

ReliabilityExtent to which research techniques are free from

error

Validity

Representativeness

Extent to which researchmeasures what it wasintended to measure

Extent to which researchparticipants are similar to

the larger group

BHO1171 – Session 4 Slide 49

Data Analysis & Interpretation

Great care requiredDon’t over interpret

Managers will often pressure for a “yes” or “no” answer

Can use quantitative and qualitative packages SPSS vs QSR

BHO1171 – Session 4 Slide 50

Analysis methods

Multivariate analysis Complex Not always necessary Limitations of statistical significance tests

Alternative is to do descriptive analysis Identify patterns in the data Significant sameness and many sets of data

BHO1171 – Session 4 Slide 51

Six stages of the research process

1• Identifying the research objectives

2• Determining information required

3• Research design

4• Fieldwork

5• Data preparation and analysis

6• Report and communicate results

BHO1171 – Session 4 Slide 52

Report structure

Executive summaryProject backgroundResearch objectivesMethodologyFindingsConclusionAppendices

BHO1171 – Session 4 Slide 53

Presenting Data

Round to whole numbers no decimal places.

Sort tables by meaningful numbers In order of magnitude rather than alphabetical order.

Use averages or medians to highlight trends Indicate totals where appropriate

Especially where numbers add up to 100 per cent.Use a story line

One sentence that summaries what the reader should take away from the table or graph.

BHO1171 – Session 4 Slide 54