Chapter 5 - Marketing Strategy Flashcards
What are marketing metrics?
Metrics used to measure, control and evaluate performance.
What is the difference between metrics, KPIs and objectives?
- Metrics - measurement used to measure specific outcomes and results
- KPIs - Key Performance Indicators. Defined based on what role you have. Measures and evaluates success in their key areas. Different for different positions in the company.
- Objectives - Strategic objectives/goals decided by the board and top management to set the direction for the next year.
What are 10 common marketing metrics?
- Profit/profitability
- Sales
- Operating margin
- Awareness
- Market share
- Number of new products
- Relative price
- Customer satisfaction
- Customer advocacy
- Distribution/availability
What does the profitability metric show?
How much cash is left when expenses are subtracted from revenue. The link between marketing activities and profitability is however not always clear
What does the sales metric show?
Can be both value and volume, and can easily be measures for individual offerings. Easy to see if efforts made in a decreasing are giving results. Problem when products are sold at low profit or even loss
What does the operating margin show?
Operating income/net sales. Also known as returns on sales. Does however not always provide indication of how much the customer is actually willing to pay.
What does the Awareness metric show?
Important, but does not necessarily build sales. Can be aware but not intend to buy brand. Is useful in determining if marketing activities have required impact on customer recognition.
What does the Market share metric show?
Determines performance within the marketplace, relative to the entire market or the market leader. Large market share does not necessarily mean we are profitable.
What does the metric for Number of new products show?
Level of innovation, vital for some industries. But need to consider new products’ impact on existing sales and customer confusion.
What does the Relative price metric show?
Our price / market leader or nearest competitor’s price. Can normally charge premium if we have competitive advantage, but high price can reduce market share if customers to not see the value.
What does the customer satisfaction metric show?
How satisfied our customers are. Past view = seeing if service quality corresponds to customers’ expectations. Low satisfaction can still keep customers if switching costs are high.
What does the Customer Advocacy metric show?
Net Promotor Score = how likely a customer would recommend firm to friend/colleague.
–> Promoters, Passively satisfied or Detractors.
What does the distribution/availability metric show?
To which extent an offering is distributed within the marketplace. May sell at exclusive stores first but use retailers further into the campaign.
