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CIM Level 6 Diploma In Professional Marketing Mastering Metrics Introduction to Unit.

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Presentation on theme: "CIM Level 6 Diploma In Professional Marketing Mastering Metrics Introduction to Unit."— Presentation transcript:

1 CIM Level 6 Diploma In Professional Marketing Mastering Metrics Introduction to Unit

2 Overarching Outcomes Metrics and Analytics (25%) 1.Understand the role of Marketing Metrics 2.Understand the significance of different measurement techniques across a range of market contexts Measuring Effectiveness (35%) 3.Know the relevant measures of marketing performance 4.Apply Marketing Metrics to establish the effectiveness of marketing activities Analytics for decision making (40%) 5.Understand appropriate sources of data for marketing analysis 6.Utilise various analytics tools and techniques for marketing insight and strategic decision making Analyse marketing data for insight and to undertake effective decision-making in relation to the use of resources 2

3 Individual Session Content 1.Principles of Measurement 2.What to Measure 3.Measurement Techniques – Statistical numerical and financial 4.Sources of Data (includes external research and internal secondary data) 5.Using and Presenting information 6.Using Data 7.Challenges and Trends 8.Building an Information and Data Function 3

4 Sample Assignment Topics Three parts to it (16 pages) based around a scenario such as mergers and partnerships or future growth challenges. There is a linear sequence of Why? Assess. Recommend. Task 1 (20 marks) requires an explanation of why organisations need data and metrics – Why? Task 2 (35 marks) analyse and identify the data and metrics which would be useful in the scenario. This part also requires a dashboard of the metrics used in evaluating an opportunity – Assess and Evaluate Task 3 (35 marks) recommend a data-focused course of action and the measurements needed, together with how it could be implemented - Recommend 4

5 CIM Level 6 Diploma In Professional Marketing Mastering Metrics Session 1 – Principles of Measurement

6 Learning Outcomes This session contributes to the following elements of the assessment criteria: –1.1 - Identify the context and requirements for an organisation to be able to set effective marketing metrics. –1.3 - Understand the risk of poorly implemented metrics and communicate examples of this in practice

7 7 A Basic Control System Process Input Output Measure Compare Corrective action Target/ budget

8 8 Principles of Measurement IN PROCESS OUT Measure Compare Action Objectives Targets Benchmarks Trends Reporting

9 9 Making Comparisons Snapshot Trend Comparison

10 Variance Analysis 10 Performance Variables used to judge operations Example Standards Marketing objectives Marketing plan Profits 15% ROI Sales per unit of analysis £5,000 average sales per unit (e.g. customer) Consumer service Complaints and warranty service per 100 units sold Costs per unit of analysis Sales costs £1,000 Distribution costs £1,250 Product costs £2,000 Source: Adapted from Luck and Ferrell (1979)

11 11 Marketing Variances - Examples ItemTargetActualVariance Percentage Volume100 units110 units+10% Standard price£2 per unit£1.90 per unit-5% Standard cost£1 per unit£0.80 per unit-20% Budgeted profit£1 per unit£1.10 per unit+10% Total Profit£100£121+21%

12 12 Gap Analysis New strategies gap Operations gap (£60M) Corporate objective (£45M) Current Sales forecast (£30M) Operations forecast The planning gap Time (years) Sales (£m) A plan details the actions needed to fill the gaps – but measurement is needed to assess the size of the gaps and to track progress towards closing the gap.

13 13 The APIC Planning Framework Audit & Analysis Planning Implementation Control Major event, e.g. recession, new competitor, technology change Periodic review, e.g. annually Source; Beamish & Ashford, 2008

14 14 Step 1 - Where are we now? Marketing audit Financial /ratio analysis Competitor analysis Customer analysis Step 2 - Where do we want to be? Mission (vision, values and purpose) Objectives Step 3 - How might we get there? Direction of growth Which markets to compete in Which customers to target How to position the offering Nature of growth Step 4 - Which methods should we use? Marketing Mix Promotional activities Media mix Activity plans, budgets, schedules Step 5 - How can we ensure arrival? Monitoring and management controls Measurements Evaluation The Planning Process

15 15 Measurement in the Planning Process Marketing Plan Implementation Operational Control Measure Efficiency Measure Effectiveness Marketing Audit Reasons for cost differences Reasons for volume differences Marketing Planning Process Source; Adapted from Verhage Marketing 2014

16 16 Measurement Levels in Organisations Strategic Operational Tactical Product and service delivery Campaign Delivery Team Performance Communications PR Advertising DM Customer Service Management of: Marketing Product Brand Sales Finance

17 17 A comprehensive suite of measurements will cover all of these areas; 1.Strategic – related to overall performance of an organisation, e.g. shareholder value, ROI, branding, reputation 2.Tactical – short term measures to assess and improve areas such as customer satisfaction, loyalty rates or promotional effects 3.Campaign – related to individual marketing activities undertaken by the organisation, such as pay-per-click or direct mail campaigns. Performance Measures

18 18 Types of Control Strategic controls Effectiveness (doing the right thing) Efficiency (how well it’s done) Adaptability Annual planning controls Profit controls Brand equity controls Tactical performance measurement Annual budgeting procedures Auditing mechanisms Benchmarking procedures

19 19 Strategic Control Systems Type of analysisUsed to control Financial analysis Ratio analysis Variance analysis Cash budgeting Capital budgeting and expenditure Elements of profitability Costs or revenue Cash flow Investment Market/sales analysis - overall consideration of size and growth of market segments and corporate market share Demand analysis Market share or penetration Sales targets Sales budget Competitive standing Sales effectiveness Efficiency in use of resources for selling Physical resource analysis Capacity fill Yield Product inspection Plant utilisation Materials utilisation Quality Human resources analysis Work measurement Output measurement Labour turnover Productivity Workforce stability

20 20 Financial Measurement Principles Financial measurement covers two areas; costs and returns. Costing can be on an absorption basis (split between departments or functions) or marginal costing (allocated to the cost of producing each product). Returns should consider the Key Performance Indicators, i.e. the most important things to the organisation. The overall effect of these costs and returns on the organisation is shown via the Company Accounts. A range of ratios is available to analyse the accounts to give a fuller picture of the health of the organisation. Financial measurement principles are also used in decision-making, i.e. to assess the costs and returns of different options.

21 21 Financial and Non-financial Metrics

22 22 Measuring the Marketing Mix Product Market share Sales Sales by segment No of new products Warranty claims Repeat purchases Place Channel costs Channel volume Channel growth Delivery time Stock levels Price Profit margin Discount levels Price by segment Price comparisons Promotion Cost per contact Media coverage Sales per call Awareness levels Enquiries generated Control Effectiveness control Efficiency control Strategic control Profitability

23 23 Choosing Metrics Should be clearly linked to corporate, business or marketing objectives Focused on measuring the key indicators in a clear way so they are easily understood Encompass broad and balanced factors and incorporate a range of marketing measures Be capable of tracking performance reliably over time Cost-effective

24 24 Knowledge Hierarchy INFORMATION - data processed to provide specific information DATA – raw facts (need processing to be meaningful) ANALYSIS SYNTHESIS INTELLIGENCE - piecing together related information to provide a bigger picture

25 25 Seeing the Big Picture - Example If reducing A&E waiting times was a target, you would need to measure more than just the waiting times. For example: –Were there are any groups who waited shorter or longer, e.g. Elderly or younger, ambulance or made their own way? –Were there patterns of injuries at certain times, e.g. Alcohol- related on Friday nights, traffic accidents on foggy mornings? –How have linked areas performed, e.g. Did GP surgery waiting times decrease at the same time? How did the NHS helplines perform? They all impact on each other but only the ‘big picture’ will reveal this. Map out the end-to-end journey for stakeholder interactions with the organisation when creating the measurement system.

26 26 Creating a Measurement Process 1.Have SMART objectives so that there is something specific to measure. 2.Establish what to measure from these objectives – these are the specific targets. 3.Identify how to obtain measurements. If ‘awareness’ was your target, there would need to be a means of measuring awareness, e.g. research. 4.Create the measurement system, e.g. implement the research programme. 5.Conduct measurements and compare against target – look for the variances. 6.Disseminate results and take action.

27 27 Benchmarking “A systematic and ongoing process of measuring and comparing an organisation’s business processes and achievements against acknowledged process leaders or key competitors to facilitate improved performance” Drummond & Ensor

28 28 Benchmarking Process 1.Identify key performance measures for each business function 2.Measure own performance as well as that of competitors 3.Identify areas of competitive advantage by comparing performance levels 4.Design and implement plans to improve own performance on key issues

29 29 Disadvantages of Benchmarking Implies there is only one best way of doing something Could be yesterday’s solution A catching up exercise, i.e. comparing the organisation to what has already been done, as opposed to identifying what could be done Assumes the information you’re getting is accurate

30 30 Importance to customerElement s Actual Performance LowMediumHighPoorSatisfactoryGood Order cycle time Delivery reliability Frequency of delivery Documentation quality Order completeness Technical support Company Benchmark competitor Benchmarking Example - Service Comparison Service support

31 Measuring Campaign Effectiveness Track both general indicators of the success of tactical activities and campaign specific results – both are needed. Consider using: –A database for recording contacts, sales, enquiries, etc. ensure that one unique record per customer is used, even if there are multiple databases. –Source codes to track where the business came from. Ensure a system is in place for all channels. –Testing disciplines to monitor results and track improvements in performance. –Both analysis and research based on the relevant performance indicator (KPI). 31

32 32 Evaluation Tools & Methods Potential tools which can be used for measurement include; –Database analysis –Sales information –Retail audits –Feedback from reps –Voucher/coupon returns –Campaign-specific measures, e.g. website visits or calls –Response Rates –Conversion Rates

33 33 Additional Skills Required Having a set of measurements is not enough. The organisation also needs to be able to analyse and use the information. This creates the need for marketers and organisations to have additional skills: –Advanced numeracy in the form of statistical and accounting techniques –Data management as the information for the analysis will need to be held and retrieved somewhere –Research as the right data needs to be sourced and captured –IT and programming skills for the technical data storage requirements and use of software.

34 Next Learning Steps There are chapter references from a textbook available via MyiLibrary for you to read plus some videos to watch. There are also podcasts available for you to listen to. Then look at the Additional Resources section to deepen your knowledge. There may be other sources you can use to enhance your knowledge such as those in the General Information section of the course or from CIM's Click and Learn facility. When you feel you understand the topics, attempt the Activities. You will know you are ready to move on when you can confidently answer the questions given. 34

35 References List Luck, D. J., Ferrell, O. C., (1979) Marketing Strategy and Plans. London. Prentice-Hall. Drummond, G., Ensor, J., Ashford, R., (2008) Strategic Marketing: Planning and Control. 3rd edition. Oxford. Butterworth-Heinemann. Verhage, B., (2014) Marketing: a Global Perspective. 3rd edition. Andover. Cengage. 35

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