Principles of Marketing - Essay Example

Principles of Marketing Introduction In the modern times, the business arena has been swept by data-based marketing. From a critical perspective the measurement of performance and accountability are the keys to marketing success. Hence, it is inevitably vital that an evaluation of pros and cons of the range of metrics to which marketing strategies and dynamics are assessed (Ogden, J, & Rarick, S 2010). A metric is a system of measurement that quantifies dynamics, characteristics and trends. In almost all disciplines, practitioners employ metrics to expound phenomena, share findings, diagnose causes, and project the outcomes of future events. Throughout the worlds of business, science and government, metrics ensures objectivity and rigor. Metrics make it probable to compare observations through various regions and times. In fact metrics facilitate collaboration and understanding and from different disciplines. From the perspective view of marketing, metrics offers a platform in which marketers evaluate the performance of the business through analysis and informed decision making to ensure efficacy for the progress of the venture. The viability of a project is calculated on the metrics basis from the most applicable metrics system to a particular initiative on the vital aspects of its advantages and limitations in actual results derivation. Marketing metrics further are statistical measurement on which businesses justify the effectiveness their respective individual efforts. The metrics are governed in the line of the objective of the business and the kind of the marketing campaign to be executed. A business develops satisfactory knowledge in being in the position to measure it undertakings and express them in the form of numbers. This makes metrics an absolute essential components of the organization by forming the basis through which effective decision making are laid from the deduced behavior influence and future strategies evaluation. Measuring brand awareness The metrics of brand brand awareness involves five levels: Brand rejection/negative associations.  When your brand is associated with something negative, people will purposely avoid the product. This happens easily nowadays with just one negative review or social media post, among many other factors that impacts on the performance in the market like accidents, product defects that can turn public attitude against your product. Brand visibility becomes the pivot of business progress and therefore it’s vital to fess up and make a move on strategy immediately to resolve the situation. Brand non-recognition.  The strategy of avoiding non-recognition would mean making sure your name and brand is differentiated sufficiently not to be generic, hence it stands out among other brands (Sterne, 2010). This is achieved through identification of the differences in value exhibited between your product and the products of your competitors and concentrate on that difference mercilessly (p. 89). Brand recognition. At this third level of the marketing metrics of measuring brand awareness, your brand has entered the customers’ mind. Once they can recognize your name, they are more likely to pick on your brand over that one they haven’t heard of.  Once your brand is at this stage, the next move is to create a value for the brand. Brand preference.  This stage entails that when a customer is given a choice between two brands he will pick on yours over someone else’s. It usually arises from the result of a sense of differentiation to mean that their needs are uniquely served by the product or service you provide at the market (Farris, 2006). Brand loyalty. Customers will now pick on your brand consistently, even if the customer occasionally experiences poor service or in a case where another product/service comes along that seems to suit their needs. To attain brand loyalty, one need to provide a brand that is highly differentiated, with sufficient value added. Further, the customers need to be offered remarkable service to an extent they will not get anywhere else, by engaging them in customized services that suit their specific profile, and ensure continuous growth in adapting to their changing needs. Measuring brand awareness is technically considered to be qualitative than quantitative. Achieving higher sales is ultimate goal, but to attain a measure of brand awareness, you have to ask the consumers their opinion about the product. Why use measuring brand awareness metrics This metric is highly applicable and widely used by the marketing management since it holds the concept that no one buys a product he/she does not know that exists. Keeping in mind the competitiveness of the market brand loyalty is critical and this is achieved in this metric through luring of customers by providing the products that best suit their preferences. Let the product be recognized and seek it market niche by knowing what the customer wants at what time (Debruyne & Hubbard, 2000: 177). TEST DRIVE The “try before you buy” model strikes a chord with a number of consumers, and raises the probability of purchase compared to when they had not had such opportunity to try. There is capability of converting the number of test drives into purchases. Test drive is a vital metric since it facilitates evaluation of purchasing cycle. Through measurement of the number of the test-drives vis a vis the number of customers who consequently purchase, it results to calculation of the average probability of purchase. The business should define the test drive for its services or products and then design evaluative marketing strategy to incent the test drive; the resulting outcome of this metric assesses efficacy of evaluative marketing campaigns that the business use as a leading sign of future sales. Why use Test Drive Metrics In accordance with the view of Jeffery (2010) the Test Drive Metrics is limited in application. In food, processing industry the Test Drive metrics is not applicable as consumers only pay for the item and be given it. While in businesses dealing with electronic and auto-mobiles there is opportunity to test how a machine functions and the customer can thereafter decide whether to buy the product or not. Further, the test drive metrics helps in evaluation of the “probability factor” of a customer making a purchase (p. 97). Churn Churn is the proportion of existing customers who decide not to do business with you on specific timely basis, for example week, month and year. For instance, a customer churn rate of 20 in a month and you started out with 200 customers, leaves you with 180 at the end of the month. Of course, the business game is all about loyalty.  Businesses with pronounced customer loyalty programs and exceptional customer service (alongside great products and high rating of usability) will experience lower churn rates.  Though as the scale grows greater and greater, companies will have a harder time measuring what their actual churn is.  Net-net, churn is to be used as a benchmark for appraising how well a business’ customers loyalty efforts are being accomplished.  In marketing, it’s a tall order to get the new customer – so it’s essential to retain the ones who’ve purchased. Churn assists to evaluate this aspect of retaining your customers by banking on their loyalty. Why use the Churn Metrics In the business arena, it becomes challenging to acquire new customers therefore, evaluation of customer loyalty is essential. The customer base is never a debatable for the progress of the business, therefore the loyalty of a particular category of customer in doing business is watched with cautiousness. Customer Satisfaction Focusing on the levels of consumer utility is an important aspect of marketing metrics. The degree of satisfaction a customer derives from a service or product provided by a business entity is an ingredient in evaluating how much loyalty a customer can portray towards that particular product or service. The method to evaluate the customer satisfaction is by asking most appropriate questions to users of a product or service during and after interacting with them. It is of note that customer satisfaction metric creates brand loyalty and thus increased sales. It’s not rocket science that when your customers are satisfied by the service/products you provide, your business will eventually flourish. It is an apparent fact (Tardugno et al., 2000). Customer Satisfaction data is valued to be a vital metric and tool managed by the organization since it allows one to learn more about what makes his/her customers happy. The results collected may not necessarily be roses, but it is of noted that it is the qualitative feature of Customer Satisfaction data, which facilitate smarter marketing decisions. Why use customer satisfaction metrics Inquiring information whether customer is satisfied with the brand is an important facet of the metrics as what a customer expects and want is given priority since the business progresses based on the customers’ base and their loyalty in resonance. Net-Present Value NPV is not merely a standard financial metric for appraising projects of long-term nature, but also a key metric in defining Return on Marketing Investment (ROMI) (Mintz, O, & Currim, I 2013).  It is imperative for marketers to possess an understanding of NPV and be in a position to calculate it so that he can justify a new campaign to business executives and advice the finance department appropriately. Calculating NPV is a good standard practice to the marketing departments to appraise whether or not every campaign is a good venture. Net present value is the present value of a project or a campaign less the costs. Net Present Value present value – costs The present value of money is the sum of the future cash benefits wen discounted to today. However, the net present value subtracts the fixed and variable costs associated with the project. The net present value is useful in evaluating whether the campaign is beneficial and viable to the company. A common rule of thumb that if NPV>zero the initiative is worth investment since the average benefits surpasses the costs. However, when NPV Read More