Planning Metrics & Implementation Control MKT 460 (Strategic Marketing) Taufique Hossain

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

Planning metrics Share of hearts, minds and markets Product & portfolio management Customer profitability Channel management & sales force Pricing strategy Promotions Advertising media and web metrics Marketing & finance Margins & profits Sales force The trade Advertising agency Logistics Customers and market research Finance Operations

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

Identifying metrics Marketing: Financial: Societal: 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.

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

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

Forecasting sales & costs 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

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

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.

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

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

Controlling marketing plan implementation Annual plan control Profitability control Productivity control Strategic control

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