Introduction to Marketing Analytics

This slideshow talks about the basics of marketing analytics, its meaning, advantages and disadvantages, concept of market sizing etc

1. Department of MBA IMS Engineering College, Ghaziabad Marketing Analytics UNIT 1 Introduction to Marketing Analytics Marketing Analytics: Data Driven Techniques with Microsoft Excel Wayne L Winston, Wiley India Pvt Ltd.

2. Marketing Analytics – Meaning Marketing analytics is the practice of measuring and analyzing data and metrics (parameters) to understand the impact of marketing activities, maximize ROI (Return on Investment) and identify areas of improvement. Peter Drucker has said “what gets measured gets managed” An effective marketing analytics practice tracks and collects data across multiple marketing channels and consolidates it into a single view.

3. Marketing Analytics – Characteristics Marketing analytics is data driven Marketing analytics portrays customer insights and trends Marketing analytics facilitates marketing decision making Marketing analytics provides a picture of marketing efforts of a company Marketing analytics requires experts to be done properly

4. Marketing Analytics – Advantages Marketing analytics is important because: Understand customer and market trend is really important I today’s times, marketing analytics gives big picture trend by following every single detail Marketing analytics allows to easily depict the programs / campaigns that worked / failed along with the reasons. Marketing analytics allows monitoring of trends over time

5. Marketing Analytics – Advantages It helps a marketer to understand its target audience better It helps a marketer to understand where the competitors are investing their efforts It helps a marketer to understand how well the marketing campaigns are performing It helps the marketers to monitor current trends and assess future trends It helps the marketer to use the data to decide future course of action

6. Marketing Analytics – Disadvantages As such, marketing analytics offers very less disadvantages, still some of the disadvantages that it may offer are: Misinterpretation of market data: Collecting a lot of data from the market is one things, interpreting the data correctly is another Evaluating market growth without market share: An analysis of the market size alone is not enough to indicate your opportunities, market share must also be evaluated correctly

7. Marketing Analytics – Disadvantages Market segmentation Vs Target markets: You must identify the segments of the market that have potential customers for your products or services. Few businesses can afford to market to every single potential customer. Identify a target market that you choose from among the available segments, and go after that target market in a focused manner. Misidentifying market needs: You may overestimate how well your competition is meeting the customers' needs and quit before you even try to market. You also may misidentify the need that is being met.

8. Sources of Market Data Sources of Market Data Internal Sources (within the org.) Accounting Information Sales Reports Expenditure data of various types Statistics of various kinds Primary Sources Salesmen Dealers Consumers Secondary Sources Periodicals and Newspapers Govt. Publications and Reports Published Market Surveys Data released by International agencies INTERNAL EXTERNAL

9. The new realities of Marketing Decision Making Marketing decision making relates to areas like – sales and distribution, advertising and promotion, supply chain management, customer service and support etc Marketing decision making has undergone a drastic change in last one decade, due to availability of new and improved tools of data analysis Marketing decisions being made today are based on data rather than intuition Experience is backed with factual insights in today’s marketing decision making process.

10. The new realities of Marketing Decision Making Marketing decision making in modern times has not remained simple anymore, it has become complex where multiple factors play a role at once Modern marketing decision are made considering the competitors and their actions Marketing decisions being made today more consumer oriented, they aim to satisfy consumers more and more Data has presumed utmost importance, analytics and marketing research has become the foundation for making sound decisions

11. Market Sizing The "market size" is made up of the total number of potential buyers of a product or service within a given market, and the total revenue that these sales may generate . Market sizing is the measurement of market potential in terms of customers and revenue it can generate for a business It's important to calculate and understand market size for several reasons – Market sizing can also help you to estimate the number of people that you may need to hire before you launch a new product or service, rather than "feeling your way" as you test your new market. If you know this from the start, you can optimize your approach to recruitment, so that you have the right people in place when you need them.

12. Market Sizing Methods Top Down Approach There are two methods that are commonly used for market sizing: top-down and bottom-up . Although the top-down method is simple, it's often unreliable and overly optimistic. It looks at the "relevant" market size for your product or service, and then calculates how much your organization might earn from it. For example, imagine that your organization markets learning resources to schools. Your research shows that there are 6,000 relevant schools in your country.

13. Market Sizing Methods Top Down Approach You know that the average sale per school is around Rs 50,000, which means that your market size is Rs 300 million. Of course, this is an incredibly optimistic and unrealistic figure. Not every school needs your products, and they're unlikely to purchase A top-down approach gives you inflated data, and you often can't rely on it to make good decisions.

14. Market Sizing Methods Bottom Up Approach The approach can be summarized in the following steps: Define You Target Market Use Market Research to assess interest in your product Calculate Potential Sales

15. Market Sizing Methods Bottom Up Approach – Example You've determined that 1,800 grocery stores might invest in your software, which costs Rs 30,000 . If 100 percent of these stores purchase the software, this is a return of Rs 54 million. Your organization has already estimated that it will have to invest at least Rs 7 million to develop, test, and market the new software. This investment is only 13 percent of potential annual revenues, so the risk is low, even if the response isn't as positive as predicted. Your organization therefore decides to move forward with the development of new software.