Lecture Marketing metrics: Chapter 4 - Trần Nhật Minh

Lecture Marketing metrics - Chapter 4: Non-financial metrics presentation of content: Product and portfolio management, pricing strategy, chanel and retail management, marketing communication metrics.

9/18/2015 Chapter 4: Non-financial metrics Contents • Product and portfolio management • Pricing strategy • Chanel and retail management • Marketing communication metrics Product & portfolio management 9/18/2015 Key metrics • Products ◦ Trial ◦ Repeat volume ◦ Penetration ◦ Volume projection • Customers ◦ Awareness, Attitude, and Usage (AAU) ◦ Customer satisfaction ◦ Recency, Retention rate ◦ Customer profit ◦ Customer Lifetime Value (CLV) ◦ Prospect Lifetime Value Trial, repeat, penetration and volume projection • Purpose: to understand volume projections • Trial rate (%): the percentage of a defined population that purchases or uses a product for the first time in a given period • First-time triers in period t (#): the number of customers who purchases or use a product or brand for the first time in a given period Trial, repeat, penetration and volume projection • 𝑻𝒓𝒊𝒂𝒍 𝒓𝒂𝒕𝒆 % = 𝐹𝑖𝑟𝑠𝑡 𝑡𝑖𝑚𝑒 𝑡𝑟𝑖𝑒𝑟𝑠 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 𝑡(#) 𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 (#) • 𝑷𝒆𝒏𝒆𝒕𝒓𝒂𝒕𝒊𝒐𝒏 𝒕 # = 𝑃𝑒𝑛𝑒𝑡𝑟𝑎𝑡𝑖𝑜𝑛 𝑖𝑛 𝑡 − # ∗ 9/18/2015 Volume projection • 𝑻𝒐𝒕𝒂𝒍 𝒗𝒐𝒍𝒖𝒎𝒆 # = 𝑇𝑟𝑖𝑎𝑙 𝑣𝑜𝑙𝑢𝑚𝑒 # + 𝑅𝑒𝑝𝑒𝑎𝑡 𝑣𝑜𝑙𝑢𝑚𝑒 # Volume projection • Trial volume: ◦ 𝑻𝒓𝒊𝒂𝒍 𝒗𝒐𝒍𝒖𝒎𝒆 # = 𝑇𝑟𝑖𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 # ∗ 𝑈𝑛𝑖𝑡𝑠 𝑝𝑒𝑟 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 # ◦ 𝑻𝒓𝒊𝒂𝒍 𝒑𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 # = 𝑇𝑎𝑟𝑔𝑒𝑡 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 # ∗ 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝑡𝑟𝑖𝑎𝑙 𝑟𝑎𝑡𝑒(%) ◦ 𝑨𝒅𝒋𝒖𝒔𝒕𝒆𝒅 𝒕𝒓𝒊𝒂𝒍 𝒓𝒂𝒕𝒆 % = 𝑇𝑟𝑖𝑎𝑙 𝑟𝑎𝑡𝑒 % ∗ 𝐴𝑤𝑎𝑟𝑒𝑛𝑒𝑠𝑠 % ∗ 𝐴𝐶𝑉(%) Volume projection • Repeat volume: ◦ 𝑹𝒆𝒑𝒆𝒂𝒕 𝒗𝒐𝒍𝒖𝒎𝒆 # = 𝑅𝑒𝑝𝑒𝑎𝑡 𝑏𝑢𝑦𝑒𝑟𝑠 # ∗ 𝑅𝑒𝑝𝑒𝑎𝑡 𝑢𝑛𝑖𝑡 𝑣𝑜𝑙𝑢𝑚𝑒 𝑝𝑒𝑟 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 # ∗ 𝑅𝑒𝑝𝑒𝑎𝑡 𝑜𝑐𝑐𝑎𝑠𝑖𝑜𝑛𝑠(#) ◦ 𝑹𝒆𝒑𝒆𝒂𝒕 𝒃𝒖𝒚𝒆𝒓𝒔 # = 𝑇𝑟𝑖𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 # ∗ 𝑅𝑒𝑝𝑒𝑎𝑡 𝑟𝑎𝑡𝑒(%) 9/18/2015 Awareness, Attitudes, and Usage (AAU) • Awareness & Knowledge: ◦ Awareness: the percentage of potential customers or consumers who recognize a given brand ◦ Knowledge: the percentage of surveyed customers who demonstrate specific knowledge or beliefs about a brand or products Awareness, Attitudes, and Usage (AAU) • Attitude: A combination of what consumer believe and how strongly they feel about it ◦ Attitude/Liking/Image ◦ Perceived value for money ◦ Perceived quality/esteem ◦ Intentions ◦ Purchase intentions Awareness, Attitudes, and Usage (AAU) • Usage: A measure of customers’ self-reported behaviors ◦ Identifying customers’ usage behaviors 9/18/2015 Awareness, Attitudes, and Usage (AAU) • Cautions: ◦ Periodic changes ◦ Customer and non-customer responses ◦ Triangulate customer survey data with sales revenue or other data related to business performance ◦ Separate leading from lagging indicators Customer satisfaction • Purpose: provides a leading indicator for consumer purchase intentions and loyalty • Customer satisfaction: The number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals Customer satisfaction • Cautions: ◦ Response bias from disappointed or angry customer ◦ Sample selection: satisfaction is calculated based on surveyed customers ◦ Change in customers’ expect���𝑜𝑠𝑡 $ • 𝑫𝒊𝒓𝒆𝒄𝒕 𝒑𝒓𝒐𝒅𝒖𝒄𝒕 𝒄𝒐𝒔𝒕 $ = 𝑊𝑎𝑟𝑒ℎ𝑜𝑢𝑠𝑒 𝑑𝑖𝑟𝑒𝑐𝑡 𝑐𝑜𝑠𝑡 $ + 𝑇𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡𝑎𝑡𝑖𝑜𝑛 𝑑𝑖𝑟𝑒𝑠𝑡 𝑐𝑜𝑠𝑡 $ + 𝑆𝑡𝑜𝑟𝑒 𝑑𝑖𝑟𝑒𝑐𝑡 𝑐𝑜𝑠𝑡($) Marketing communication metrics Key metrics • Promotion ◦ Baseline sales ◦ Promotion lift • Advertising media metrics ◦ Opportunities to see (OTS) ◦ Gross Rating Points (GRPs) ◦ Share of Voice • Web metrics ◦ Impressions ◦ Clickthrough rate ◦ Cost per impression, click, order 15 9/18/2015 Promotion: Baseline sales, incremental sales, promotional lift • Purpose: To select a baseline of sales against which the incremental sales and profit generated by marketing activity can be assessed Promotion: Baseline sales, incremental sales, promotional lift • 𝑻𝒐𝒕𝒂𝒍 𝒔𝒂𝒍𝒆𝒔 $, # = 𝐵𝑎𝑠𝑒𝑙𝑖𝑛𝑒 𝑠𝑎𝑙𝑒𝑠 $, # + 𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑠𝑎𝑙𝑠𝑒 𝑓𝑟𝑜𝑚 𝑚𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 $, # • 𝑳𝒊𝒇𝒕 % = 𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 $,# 𝐵𝑎𝑠𝑒𝑙𝑖𝑛𝑒 𝑠𝑎𝑙𝑒𝑠 ($,#) • 𝑪𝒐𝒔𝒕 𝒐𝒇 𝒊𝒏𝒄𝒓𝒆𝒎𝒆𝒏𝒕𝒂𝒍 𝒔𝒂𝒍𝒆𝒔 $ = 𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 𝑠𝑝𝑒𝑛𝑑𝑖𝑛𝑔 ($) 𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 ($) Promotion: Baseline sales, incremental sales, promotional lift • Baseline sales: ◦ Expected sales results, excluding the marketing programs under evaluation 16 9/18/2015 Promotion: Profitability of a promotion • 𝑷𝒓𝒐𝒇𝒊𝒕𝒂𝒃𝒊𝒍𝒊𝒕𝒚 𝒐𝒇 𝒂 𝒑𝒓𝒐𝒎𝒐𝒕𝒊𝒐𝒏 $ = 𝑃𝑟𝑜𝑓𝑖𝑡𝑠 𝑎𝑐ℎ𝑖𝑣𝑒𝑑 𝑤𝑖𝑡ℎ 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛 $ − 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑝𝑟𝑜𝑓𝑖𝑡𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛 $ • Estimated profits without promotion: profits calculated on baseline sales Advertising Media Impressions, Gross rating Points (GRPs), Target Rating Points (TRPs) Impressions • Purpose: To measure the audience for an advertisement • Impressions = Exposures = Opportunities To See (OTS) • Impressions: the number of times a specific advertisement is delivered to a potential customer • An estimate of the audience for a media “insertion” or a campaign 17 9/18/2015 Impressions • 𝑰𝒎𝒑𝒓𝒆𝒔𝒔𝒊𝒐𝒏𝒔 # = 𝑅𝑒𝑎𝑐ℎ # ∗ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 # • 𝑹𝒆𝒂𝒄𝒉 # = 𝐼𝑚𝑝𝑒𝑟𝑠𝑠𝑖𝑜𝑛(#) 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦(#) Gross Rating Points (GRPs) • Reach [Rating points – (%)]: calculated as individuals reached by that vehicle, divided by the total number of individuals in a defined population • Gross Rating Points (GRPs): the sum of all rating points delivered by the media vehicle carrying an advertisement or campaign Gross Rating Points (GRPs) • 𝑮𝑹𝑷𝒔 = 𝑅𝑒𝑎𝑐ℎ % ∗ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 # ∗ 100% 𝐼𝑚𝑝𝑒𝑟𝑠𝑠𝑖𝑜𝑛(#) • 𝑮𝑹𝑷𝒔 = 𝐷𝑒𝑓𝑖𝑛𝑒𝑑 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛(#) ∗ 100% 18 9/18/2015 Target Rating Points (TRPs) • Target Rating Points (TRPs): the gross rating points delivered by a media vehicle to a specific target audience • 𝑻𝑹𝑷𝒔 = 𝑅𝑒𝑎𝑐ℎ % ∗ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 # ∗ 100% • 𝑻𝑹𝑷𝒔 = 𝐼𝑚𝑝𝑒𝑟𝑠𝑠𝑖𝑜𝑛(#) 𝑇𝑎𝑟𝑔𝑒𝑡(#) ∗ 100% Cost per Thousand Impressions (CPM) Rate • Purpose: to compare the costs of advertising campaigns within and across different media • CPM: The cost of a media campaign, relative to its success in generating impressions or opportunities to see Cost per Thousand Impressions (CPM) Rate 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) • 𝐶𝑃𝑀 $ = 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑(# 𝑖𝑛 𝑡ℎ𝑜𝑢𝑠𝑎𝑛𝑑) 19 9/18/2015 Share of voice • Purpose: to evaluate the comparative level of advertising committed to a specific product or brand • Share of voice: the percentage of advertising in a given market that a specific product or brand enjoys Share of voice • 𝑺𝒉𝒂𝒓𝒆 𝒐𝒇 𝒗𝒐𝒊𝒄𝒆 % = 𝐵𝑟𝑎𝑛𝑑 𝑎𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 ($,#) 𝑇𝑜𝑡𝑎𝑙 𝑀𝑎𝑟𝑘𝑒𝑡 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔($,#) Web metrics • Impressions, Pageviews, Hits: ◦ Purpose: to assess website traffic and activity ◦ Pageviews: the number of times a specific page has been displayed to users (equal to OTS) ◦ Hits: A count of the number of files served to visitors on the web 20 9/18/2015 Web metrics: rich media • Rich media display time: ◦ Purpose: to determine how long an advertisement is viewed ◦ 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒊𝒄𝒉 𝒎𝒆𝒅𝒊𝒂 𝒅𝒊𝒔𝒑𝒍𝒂𝒚 𝒕𝒊𝒎𝒆 # = 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑑𝑖𝑠𝑝𝑙𝑎𝑦 𝑡𝑖𝑚𝑒(#) 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) Web metrics: rich media • Rich media Interaction rate: ◦ Purpose: to measure and monitor active involvement with an advertisement ◦ 𝑹𝒊𝒄𝒉 𝒎𝒆𝒅𝒊𝒂 𝒊𝒏𝒕𝒆𝒓𝒂𝒄𝒕𝒊𝒐𝒏 𝒓𝒂𝒕𝒆 % = 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 𝑤𝑖𝑡ℎ 𝑖𝑛𝑡𝑒𝑟𝑎𝑐𝑡𝑖𝑜𝑛𝑠(#) 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) Web metrics: clickthrough rates • Clickthrough rate: ◦ Purpose: to capture customer’s initial response to websites ◦ 𝑪𝒍𝒊𝒄𝒌𝒕𝒉𝒓𝒐𝒖𝒈𝒉 𝒓𝒂𝒕𝒆 % = 𝐶𝑙𝑖𝑐𝑘𝑡ℎ𝑟𝑜𝑢𝑔ℎ(#) 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) ◦ Clickthrough: The number of times a click is made on the advertisement 21 9/18/2015 Web metrics: Costs • Purpose: to capture customer’s initial response to websites ◦ Cost per impression ◦ Cost per click ◦ Cost per order Web metrics: Costs • 𝑪𝒐𝒔𝒕 𝒑𝒆𝒓 𝒊𝒎𝒑𝒓𝒆𝒔𝒔𝒊𝒐𝒏($) = • 𝑪𝒐𝒔𝒕 𝒑𝒆𝒓 𝒄𝒍𝒊𝒄𝒌($) = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑙𝑖𝑐𝑘𝑠(#) • 𝑪𝒐𝒔𝒕 𝒑𝒆𝒓 𝒐𝒓𝒅𝒆𝒓($) = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠(#) 22 ... of customers’ self-reported behaviors ◦ Identifying customers’ usage behaviors 9/18/2015 Awareness, Attitudes, and Usage (AAU) • Cautions: ◦ Periodic changes ◦ Customer and non-customer responses...the advertisement 21 9/18/2015 Web metrics: Costs • Purpose: to capture customer’s initial response to websites ◦ Cost per impression ◦ Cost per click ◦ Cost per order Web metrics: Costs •