How metrics of a leader looks like!

In any field, measurement of results is paramount. Without establishing a cause and effect relationship, it would be impossible to tell what is working and what isn’t. Every new effort needs to establish a set of metrics appropriate to the kind of effort undertaken in order to measure and control its effects. When it comes to marketing, Marketing Metrics takes over this responsibility. A host of marketing metrics are available at the disposal of companies to find out how much their marketing efforts are faring.

For an example of these metrics, let’s take a look at Apple, the largest company in the world by market value (Statista). The story of how Steve Jobs transformed the company is now the stuff of legends. Its marketing and brand positioning strategy has obviously been a big success, so much so that the term “Applesque” is being used for anything resembling an Apple product. We will look at three different marketing metrics of Apple to understand their meaning and have an idea of how the metrics of a leader look like!

Starting off with Financial Metrics, they include a host of things like revenues, profiles, return on investment (ROI), etc. Reporting financial metrics is considered to be a best-practice in measuring marketing performance, without which the business cannot be viewed as being market oriented (Ambler 2000). Being the most valued company in the world, Apple can be guaranteed to have a huge revenue generation. But how much of that is due to the marketing efforts? That’s the question that needs to be answered:

Net marketing contribution is defined as the contribution to the company profits after the marketing and sales expenses have been deducted (marketsaurus.com). The formula can be written as:

Net Marketing     =     Sales           X      Percent         –     Marketing & Sales

Contribution               Revenues            Gross Margin               Expenses

In case of Apple, the figures look like this:

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Figure 1: Apple Marketing Profitability Metrics

Apple’s net marketing contribution also shows high collinearity with its operating income, although causality is not proved:

http://www.marketingmetricssolutions.com/pdf/MMH%20-%20WP%20Final%20RB.pdf

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Figure 2: Collinearity between Apple Net Marketing Contribution and operating income

Next, we will move on to a Memory Metric like Brand image association. These are the qualities and attribute that people associate with a brand. Brand image associations can show how consumers perceive a particular brand and is a result of how the marketing efforts have positioned the brand in the minds of the consumers. Apple has always sold itself as a premium brand that makes products with slick design elements. Due to this, Apple’s products are also sold at a price premium over its competitors. A brand association survey showed the following words that people generally associate with the Apple brand:

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                  Figure 3: Brand Image associations of Apple

In comparison, people associated the following words with Microsoft:

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Figure 4: Brand image associations of Microsoft

Some similarities can be seen. As for example both brands have a good association with their product lines (e.g. iPod, mac, windows, and software).

But the big difference is obvious. People generally associate Apple products with favourable and positive sounding words, while those of Microsoft are negative, showing that it has fallen out of favour. This shows that Apple’s marketing efforts have paid-off and consumers are tying the brand with words like cool, creative, expensive, quality, etc. which the marketers were striving for.

Lastly, we will see another important Memory Metric, i.e. Customer Satisfaction. Customer satisfaction has become a very important topic for the electronics industry as a big part of its touchpoint with customers occurs at service centres. A look at the latest figures from the American Customer Satisfaction Index (ASCI) show Apple leading in both the “Personal Computers” and “Cellular Telephones” industries categories, followed closely by Samsung in both.

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Figure 5: Apple consumer satisfaction index in personal computers

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Figure 6: Apple consumer satisfaction index in cellular telephones

These metrics show that Apple has really hit it home with its marketing strategy. Most probably Apple will also score high in any other marketing metric we can think of.

BY:

HEMANTH KUNDALA,

214470099.

References:

Journals:

Ambler, T 2000, ‘Marketing Metrics’, Business Strategy Review, Vol 11, Issue 2, pp. 59-66

Webpages:

Statista, The 100 largest companies in the world by market value in 2015 (in million U.S. dollars), Statista Inc., retrieved 22 May 2016, < http://www.statista.com/statistics/263264/top-companies-in-the-world-by-market-value/>

Marketsaurus, Net Marketing Contribution, Marketsaurus, retrieved 22 May 2016, < http://www.marketsaurus.com/net-marketing-contribution>

Illustrations:

Figure 1: Apple Marketing Profitability Metrics, retrieved 22 May 2016, < http://www.marketingmetricssolutions.com/pdf/MMH%20-%20WP%20Final%20RB.pdf >

Figure 2: Collinearity between Apple Net Marketing Contribution and operating income, retrieved 22 May 2016, < http://www.marketingmetricssolutions.com/pdf/MMH%20-%20WP%20Final%20RB.pdf >

Figure 3: Brand Image associations of Apple, retrieved 22 May 2016, < http://www.trulydeeply.com.au/brand-identity/graphic-design-melbourne-apple-microsoft-brand-association/ >

Figure 4: Brand Image association of Microsoft, retrieved 22 May 2016, < http://www.trulydeeply.com.au/brand-identity/graphic-design-melbourne-apple-microsoft-brand-association/ >

Figure 5: Apple consumer satisfaction index in personal computers, retrieved 22 May 2016, < http://www.theacsi.org/index.php?option=com_content&view=article&id=147&catid=&Itemid=212&i=Personal+Computers>

Figure 6: Apple consumer satisfaction index in cellular telephones, retrieved 22 May 2016, < http://www.theacsi.org/index.php?option=com_content&view=article&id=147&catid=&Itemid=212&i=Cellular+Telephones>

Videos:

What makes apple’s marketing unique? 2012, YouTube, IntraGlobalSolns, 9 March, retrieved 22 May 2016, < https://www.youtube.com/watch?v=TtE6J0TXPNE>

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