Multiple metrics matter

Marketers use a "dashboard" of financial, behavioral and mental metrics to evaluate the success of their marketing strategy.

Marketers use a “dashboard” of financial, behavioral and mental metrics to evaluate the success of their marketing strategy.

Marketers use metrics to measure the effects of their activities. Marketing metrics can be defined as a “system that quantifies a trend, dynamic or characteristic. It can diagnose causes and help to project future events (Farris 2010:1).

Marketers need to be able to quantify what they do for a number of reasons. Firstly, marketing budgets account for approximately 10.2% of all spending by firms (Gartner research 2015). It is therefore a reasonable expectation of firms to expect marketers to be accountable for this expenditure. Secondly, measuring marketing activities allows marketers to have knowledge to make informed strategic decisions and decipher how well they are using current resources. In other words, “if you can’t measure it, you can’t manage it” (Farris 2010:3).

Data vs information vs knowledge

Marketing evaluation begins with the collection of data. The collection of data alone, however does not mean anything unless it is converted into information which can be interpreted by a human. Therefore, “one-way of thinking about the value of information is whether it creates knowledge or not” (Bendle 2016:6). Marketing evaluation needs to be able to convert information into knowledge, otherwise it is of no practical use in decision making.

Evaluating marketing

In a very simple view, the goal of marketing is to increase profitability by increasing sales (Iacobucci 2013:211). Measurement of marketing through financial metrics alone, however does not account for the broad scope of marketing activities. It does not take into account assets such as brand equity or customer behaviours such as loyalty, intention to purchase and satisfaction (Ambler and Roberts 2008:743). It also does not include what is going on in the mind of consumers such as mental associations they may have with brands. Marketers need to look beyond a finance only approach to a “multiple metric approach…which bring together the multiple measures seen by senior management into a clear, integrated and concise package” (Ambler Roberts 2008:743). This dashboard approach can vary between organisations, but what is important is that marketers are looking at multiple metrics (Iacobucci 2013:219).

The case of Woolworths

A great example of the multiple metric approach is evaluating the data in the case of Woolworths.

Woolworths dashboard

Woolworths continues to lead Australia's supermarket sector in market share, but Aldi has been stealing some of it away.

Woolworths continues to lead Australia’s supermarket sector in market share despite a recent decline.

Market share – comparative strength of a business relative to competitors (Farris 2010:28).

 

Woolworths 37.5%

Coles 32.5%

Aldi 12.1%

IGA 9.7%

(Roy Morgan 2016)

 

Brand equity – brands are assets and should be able to carry a financial value (Iacobucci 2013:87).

 

Woolworths is the second most valuable brand in Australia worth $10.5 million

Coles is the eighth most valuable brand in Australia worth $6.5 million

(businessinsider.com.au 2016)

Share of voice – quantifies the advertising presence of a brand (Bendle 2010:312). Woolworths – 50.82%

Coles – 24.27%

Aldi – 11.95%

IGA – 6.45%

(Adnews 2016)

 

Customer loyalty – whether shoppers visit the same supermarket each time (Roy Morgan 2015)

 

77% of grocery shoppers visit at least two different supermarkets in a four week average

Only 25% of regular Woolworths shoppers shop at Woolworths each time. Coles customers are a little less loyal at 24%

(Roy Morgan 2015)

 

Profits – = sales revenue – costs (Iacobucci 2013:87).

 

Loss of $972.7 million in latest half year results

(ABC News 2016)

Reviewing this data, we can see Woolworths have suffered a sizable decline in profitability in the last half-year result. However, if we were to focus on this one financial measure alone we would be misled. Most analysts would suggest the loss was due to its failing home improvement stores Masters, not its supermarket (ABC News 2016). It still has the largest market share in the industry, loudest share of voice in advertising and most valuable brand. On the down side, its customers are not as loyal as they could be.

When it comes to supermarket advertising, Woolworths dominates all comers.

When it comes to supermarket advertising, Woolworths dominates all comers.

In assessing a business, metrics, especially financial metrics are essential. But a multiple metrics approach shows that marketing decisions should be made based on all the relevant information.

References

Farris, P 2010, Marketing metrics : the definitive guide to measuring marketing performance, Upper Saddle River, N.J. : FT Press, c2010.

Bendle, NT 2016, Marketing metrics : the manager’s guide to measuring marketing performance, Upper Saddle River, New Jersey : Pearson Education, [2016].

https://www.gartner.com/doc/2984821/cmo-spend-survey–eye

Iacobucci, D 2013, MM4, Mason, Ohio : South-Western ; Andover : Cengage Learning [distributor], [2013].

Ambler, T, & Roberts, JH 2008, ‘Assessing marketing performance: don’t settle for a silver metric’, Journal of Marketing Management, vol. 24, no. 7/8, pp. 733-750

http://www.roymorgan.com/findings/6762-supermarket-sweep-aldis-share-of-aussie-market-still-rising-201604142258

http://www.adnews.com.au/news/coles-focuses-ad-spend-on-financial-services

http://www.roymorgan.com/findings/6442-supermarket-loyalty-whats-that-201509072312

http://www.businessinsider.com.au/telstra-has-deposed-woolworths-as-australias-most-valuable-brand-2016-4

http://www.abc.net.au/news/2016-02-26/woolworths-reports-almost-$1-billion-loss/7202004

 

Written by amarg81

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One voice. The value of Integrated Marketing Communications

Brands that develop Integrated Marketing Communications (IMC) capabilities are improving brand attitudes and the financial bottom line. We explore the concept of IMC and show how it is done.

The media challenge

IMC is the discipline of presenting a brand identity as one voice, irrespective of the medium used to communicate the message. IMC is crucial due to the fragmentation of the media market[1]. Previously, consumers received advertising from brands through mass media outlets such as TV, print or radio. The communication model was called push and the messages were “one to many”, with the company retaining control of the messaging[2].

In the current digital landscape, audiences are spread out thinly across more media channels. This has changed the dynamic to one where communication is interactive, and consumers are more active multi-taskers and are increasingly interconnected and ‘ubiquitous[3]. As a result, consumers are engaging with brands at new touch points and have a co-creating role in brand identity. Brands that do IMC poorly present a divided and fractured voice.

So what is IMC?

IMC has three elements. Firstly, it includes the concept of “one voice” or a consistent brand image. Secondly, it includes integration of advertising to strengthen brand image and influence consumer behaviour. Thirdly, it involves coordination of the various communications tools to execute a holistic campaign[4].

Big brands see the benefit of IMC

Nike’s 2012 “Find your greatness” campaign is a successful case study of IMC. The concept was that greatness was not just for elite athletes but something we can all aspire to. Advertising goals differ based on the product life cycle[5]. Being one of the world’s most recognisable brands in a mature market, Nike’s advertising objective appears to be to remind consumers they remain the pre-eminent brand preference for quality sporting goods.

Nike chose a multi-channel approach that included television, online video, outdoor, print, social media and a customised app. The scheduling was timed to coincide with the 2012 London Olympics, when sport would be at the forefront of consumer’s minds[6]. It chose an “emotional appeal” advertising format, using image ads and endorsements. Emotional ads seek to create emotional attachments between the consumer and the brand[7]. The Nike advertising sought to evoke feelings of pride in the everyday users of their products. Adverts used compelling images of ordinary athletes as endorsements of the brand.

A key feature of successful IMC is effective integration of messaging across all touch points. Nike successfully applied all the elements of the campaign to the various touch points. The creative “look and feel”, colours, typography and tone of voice are consistent across all its communications.

Nike's campaign integrated the same consistent look and messaging across all the different touch points from Facebook (social), Youtube, print and outdoor.

Nike’s campaign integrated the same consistent look and messaging across all the different touch points from Facebook (social), Youtube, print and outdoor.

Nike also used public relations to lead the “most active day in the history of Nike”, leveraging its 8 million users of exercise tracking technology to take part in the campaign[8].

IMC helps the bottom line

Measuring the effectiveness of advertising campaigns is difficult due to its effects being subsumed by the broader impact of the marketing mix. But recent research suggests there is a strong link between effective IMC as well as brand reputation and financial performance. This research indicates “a IMC capability contributes to brand performance by facilitating the development…of more effective IMC campaigns resulting in positive brand-related performance outcomes”[9].

In other words, the more brands harness their IMC capabilities, the more benefits for their reputation and bottom line.

 

 

References

[1] Vernuccio, M, & Ceccotti, F 2015, ‘Strategic and organisational challenges in the integrated marketing communication paradigm shift: A holistic vision’, European Management Journal, no. 6, p. 438.

[2] Ibid., p439

[3] Ibid., p439

[4] Kliatchko, J 2005, ‘Towards a new definition of Integrated Marketing Communications (IMC)’, International Journal of Advertising, vol. 24, no. 1, p3

[5] Iacobucci, D. (2014) Marketing Management (MM), 4th Edition, South-Western, Cenage Learning, Mason, Chapter 11, Advertising Messages and Marketing Communication, p 147

[6] http://news.nike.com/news/nike-launches-find-your-greatness-campaign-celebrating-inspiration-for-the-everyday-athlete

[7] Iacobucci, D. (2014), Marketing Management (MM), 151

[8] http://news.nike.com/news/nike-launches-find-your-greatness-campaign-celebrating-inspiration-for-the-everyday-athlete

[9] Luxton, S, Reid, M, & Mavondo, F 2015, ‘Integrated Marketing Communication Capability and Brand Performance’, Journal of Advertising, vol. 44, no. 1, p 7

By amarg81

How market research is winning elections

DALLAS, TX - SEPTEMBER 14: Republican presidential candidate Donald Trump speaks during a campaign rally at the American Airlines Center on September 14, 2015 in Dallas, Texas. More than 20,000 tickets have been distributed for the event. (Photo by Tom Pennington/Getty Images)

As the US elections heat up, we take a look at how parties are using market research to find out more about voters.

As the United States enters the business end of its Presidential elections, we turn the spotlight on how the major parties plan on using market research to deliver them the edge at the ballot box.

Who actually matters

For political parties, the marketing problem to be solved in very simple terms is this: who are the voters who will decide the election, where can you find them, what do they care about and how will you reach them.

A good political campaign often uses a mix of quantitative and qualitative market research to achieve this.

Perceptual maps are used extensively in campaigns to see how candidates rate on character issues or how they are positioned differently on the issues.

Perceptual maps are used extensively in campaigns to see how candidates rate on character issues or how they are positioned differently on policy issues.

However, in recent years the political market research game has changed substantially.

The rise of digital tools and the explosion of unstructured big data that can be bought and sold privately have changed the nature of research.

The voter file

Parties have historically had access to a voter file (US, UK, NZ and Australia). A voter file is a list of all voters for the electorate a candidate is standing in.

The voter file has been standard in politics for decades. It gives parties access to the basic demographics of their voters such as their name, age, address and household composition.

At a basic level, the voter files allow parties to analyse and target clusters of people that share similar characteristics on a simple demographic level.

Historically, political parties have used insights gleaned from polling and focus group research to target people through the voter file.

However, over the course of the past few years, access to new data sets has enabled political parties to gain even better insights.

More insights into attitudes

One big change has been to source data from external data providers and attempt to correlate it to information on voter files.

In some instances, this has added 30 or more new datasets from which parties can predict future voter behaviour.

Parties can now combine demographic data with a better psychographic understanding of key segments of voters. They can delve deeper into the attitudes that motivate behaviour.

Access to more data means political parties can get better insights into their own supporters and those uncommitted voters it needs to help them win.

Access to more data means political parties can get better insights into their own supporters and those uncommitted voters it needs to help them win.

Pin point accuracy

New data has also given better insights on how to reach key segments. For example, during the US elections in 2012, data received on TV set top boxes was correlated against the voter file, revealing to the Democratic Party the viewing habits of their target audiences.

This improved their targeting by knowing precisely which TV shows their segments were watching, allowing them to deliver content directly to these people with minimum wastage on advertising costs.

Digital platforms such as Nation Builder are also being used to gain better integration with a party’s activists. Organisations can upload their voter file and the software can trawl social media to relate a person’s social site with their individual record.

Digital tools such as NationBuilder allow organisations to find their supporters and develop them into activists for the cause

Digital tools such as NationBuilder allow organisations to find their supporters and develop them into activists for the cause.

Digital tools have also allowed parties to better measure the best email (EDM) fundraising techniques through A/B testing. By testing different messages on smaller audience sizes (through analysis of open and conversion rates), the parties can estimate the content that will deliver the most ROI.

Room for improvement

Why do people vote a particular way? Political research has suffered from the vagueness of which attribute decisions contribute to the final outcomes at the ballot box.

Most published opinion polls (and private research) ask respondents to rate the issues in the order of importance and which candidate they feel is better at managing them.

However, they don’t demonstrate the trade off voters will make to arrive at their final decisions. Ultimately, voters are weighing up a set of different attributes when arriving at a decision.

With the election hotting up, the market research battle will be one to watch closely.

 

Written by amarg81

 

References

http://www.smh.com.au/comment/political-parties-know-a-lot-about-you-and-theyll-use-facebook-to-win-your-vote-20160328-gns66f.html

http://www.afr.com/news/world/how-the-pollsters-got-it-wrong-and-lynton-crosby-james-messina-and-mark-textor-got-it-right-20150510-ggy7qk

https://www.sciencedaily.com/releases/2014/02/140227115516.htm

http://www.theatlantic.com/technology/archive/2012/11/when-the-nerds-go-marching-in/265325/

India is ripe for the taking

Apple is ramping up its efforts to conquer the emerging Indian market

Apple is ramping up its efforts to conquer the emerging Indian market

The launch of Apple’s new iPhone SE has come with talk about expanding in the emerging market of India.

Middle class rising

India’s population changes will make it an attractive market segment for Apple over the next decade due to the rise of a new middle class.

Between 2015-2030, median household income is predicted to increase by 89.8% in real terms.

By 2030, middle class households will exceed 90 million, making it the second largest middle class market in the world.

India's middle class is rising and so will their appetites

India’s middle class is rising and so will their appetite for high end products

New money, new values

The growth of India’s middle class will lead to rises in the discretionary spending power of households. This will change the psyche of this market segment.

Demand for quality consumer products will rise as more customers seek to fulfil product needs further up the hierarchy.

The smartphone market now is dominated by cheaper mobile devices. As this market segment grows, they will likely seek out more aspirational products such as the iPhone.

It’s the right place and right time

India’s smartphone market is set to grow substantially in the next few years.

Analysts are predicting there will be another 117 million smartphone units sold in 2017.

It is also estimated by the end of next year, India will surpass the US as the second largest market for smartphones globally.

Another significant piece of data pointing to opportunity is that only 40% of mobile devices in India are smartphones.

Apple has only around 1.8% of market share in India. However, the market is growing and is nowhere near being mature or saturated.

Battling elitist perceptions

Apple has repositioned its offering in the marketplace. It has made changes to its pricing, distribution and promotional activities in India.

Apple iPhones are positioned at the higher end of both quality and price in the market place. This is sensible in developed markets. However, if Apple wants to make progress in emerging markets such as India it will have to follow a different strategy.

Cheaper, but not cheap

The Apple iPhone SE is positioned on price at around the $450 range. It is the first time Apple has priced a phone in that segment.

The SE is positioned above the entry-level smartphones on sale in India. It is not, however too premium priced to be beyond the range of aspiring households.

Apple has not compromised on the quality of the product. The SE continues to carry most of the high end specs of the iPhone 6.

This approach has repositioned Apple in India: iPhones are not simply for well off Indians, but are an option for middle income households.

Apple has wisely chosen not to compete at a congested cheaper range with its main competitors. It has maintained its point of difference as a high end but now affordable device.

iPhones for the masses

Apple is widening its distribution networks across India.

It has applied to Government to open its own stores and sell online.

It is also increasing distribution outside of India’s main cities to rural areas where approximately 70% of people live. It will do this through smaller distributors to bring the product direct to rural customers.

Apple has also been working with banks to help Indians get finance to buy phones.

Battling for the hearts and minds

Apple has increased it’s advertising spend to convince customers its iPhone is within reach.

It has chosen a multi-channel strategy, investing heavily in outdoor (billboards) and full page press ads across India.

The data doesn’t lie: India is great opportunity for Apple.

References

http://blog.euromonitor.com/2015/09/top-5-emerging-markets-with-the-best-middle-class-potential.html

http://www.theaustralian.com.au/business/wall-street-journal/apple-pushes-to-bolster-market-share-in-india/news-story/4ec286692b2ae9ce1490c4ff39430088

http://www.wsj.com/articles/apple-makes-a-play-to-open-retail-stores-in-india-1453277570

http://timesofindia.indiatimes.com/tech/tech-news/iPhone-SE-at-Rs-39000-is-a-clever-move-from-Apple-Analysts/articleshow/51523908.cms?

By amarg81