Marketing Performance Evaluations

Performance evaluations are used to identify problems and obstacles which prevent the company from achieving its performance goals. There are two primary metrics that are used for marketing evaluation. The first is a financial metric and the second is a portfolio or market share metric.

Financial Metrics

Financial metrics are commonly used to assess revenue, sales, and net profit. Managers must understand how their actions affect multiple performance metrics.

For instance, high sales volume could increase a firm’s activity image, but a firm could increase sales by simply lowering prices. A firm assesses financial performance by evaluating net sales, net profit, and profit margin [net profit / net sales] over previous years or it can compare its performance against other companies.

Portfolio Analysis

A business’s portfolio (in the marketing field) refers to the products (or services) offered by a particular firm; and a portfolio analysis refers to the process in which firms use the bulk of their resources to promote products that will be the most profitable. One of the most popular portfolio analysis methods was developed by the Boston Consulting Group (BCG), which states that companies should classify their products or services in a two-by-two matrix. This matrix's two axis consist of: market share and market growth.

Market Share refers to the percentage of a specific market group a firm owns.

For example, in the fast food market, McDonalds owns the largest market share followed by companies like Wendy’s, Burger King, KFC, etc…

Market Growth or market growth rate measures the attractiveness and the rate of increasing profits that can be produced from a particular market.

1. Stars
"Stars" have a high growth rate and high market share. Stars use large amounts of financial capital and are the top selling product in the business (so they should also generate large amounts of cash.)

2. Cash Cows
"Cash Cows" have a low growth rate but high market share. Profits and cash inflows should be high, and because of the low growth, investments needed should be low.

3. Dogs
"Dogs" have a low growth rate and low market share. Avoid and minimize the number of "dogs" in your company.

4. Question Marks
"Question Marks" have a high growth rate and low market share. Question Marks have the worst cash characteristics of all, because high consumer demand and low returns due to a low market share. If nothing is done to change the market share, question marks will simply absorb a large amount of cash and later, as the growth stops, a dog. - either invest heavily or sell off or invest nothing and generate whatever cash it can. Increase market share or deliver cash.

Basic Price and Value Capture

Value Based Marketing refers to a business that charges a price on certain products that customers perceive as giving them a good value. Businesses generally practice three types of pricing strategies.

1) Cost Based Pricing is when a firm determines the cost of producing its product, then adds a preset amount above the total cost to arrive to a selling price

2) Competitor Based Pricing is when a firm prices products below, at, or above a competitor’s offering.

3) Value Based Pricing is when a firm determines the perceived value of the product from the customer’s point of view.

For example, a jewelry store may increase their prices on princess cut diamonds because princess cut diamonds are considered to be more attractive as a gift then most other cut diamonds.

Pricing is a strategy that influences revenue. If a price is set too high, sales volume is low; and if prices are set too low, profit margins are compromised. Therefore many marketers argue that price should be based on the value that the customer perceives.

Marketing Tip #4 -- Identify Your STP

Now as a marketer or business owner, its time for you to develop opportunities to increase sales and profit using an STP strategy. STP stands for:

Segmentation

Targeting

Positioning

Segmentation

A firm should realize that it cannot satisfy the wants and needs of every customer in the marketplace.

for example: many African American clothing shoppers can be divided by their choice of style. While some prefer a business casual outfit, others may prefer a more "urban" or punk rock look. No one clothing retailer can satisfy the preferred styles of all consumers in the clothing market so different retailers such as JcPennys, Forman Mills, Ross, Macys, and even Goodwill have their target market based on the products they sell, the cost of their products (price of their clothing), and who they want their brand to appeal to. Each of these retailers sell to a different clothing market segment.

The process of diving customers based on needs, wants, and characteristics is call, Market Segmentation.

Market segmentation gives a business the benefit of focusing their mission, and marketing strategy to a specific target market that will offer the most growth opportunity and sales volume.

Forman Mills, for example, has developed a target market of urban based consumers. Even though Forman Mills has a wide selection of merchandise, their product costs and advertisements target a mid - low income level consumer base.

Targeting

After a company has identified its target market and its market segment(s) it might pursue, the company must then decide which specific market segment seems most attractive and pursue it using what is known as "target marketing."

From the previous example, a clothing retailer like JcPennys might target their products towards customers with a mid-upper income level - $44,000 to $84,000 - who normally have convenient transportation.
This is evident by JcPenny's locations in major malls and midsized shopping centers. Their products (clothing) are more known name brand merchandise which has a price range of $15 - $75 dollar per item.

Positioning

Finally, once the company has segmented their markets and decided which market segment they wish to pursuit, the company must now position its brand and marketing strategy to attract the selected market group.

Formally, Market Positioning involves a process of using the marketing mix so that target customers have a clear and desirable understanding of what the product does compared to competing products.

Marketing Tip #3 -- Conducting a SWOT Analysis

After a company develops their business mission, it must perform a SWOT analysis which defines a company's

Strengths

Weaknesses

Opportunities

Threats

Let’s assume a new beauty salon has just been established in a new shopping center. Lets develop a SWOT analysis for this new business

S (trengths)	W (eaknesses)
New designers can relate to our target market Comfortable environment - interior design located in busy shopping center near our target market	New store - low customer awareness

O (pportunities)	T (hreats)
Expansion into a new market demographic Exclusive retailer of selective hair products	Existing salons can already have loyal customers Customers afraid of trying new salon

Marketing Tip #2 -- Building a Sustainable Competitve Advantage

A Marketing Strategy is a concept that identifies: a firm's target market, the marketing mix, the firm's mission for which it plans to build a Sustainable Competitive Advantage.

What is a Sustainable Competitive Advantage?

A sustainable competitive advantage (SCA) is a firm’s ability to maintain an advantage over the competition that cannot be easily copied.

For example, the Apple iPod, with its sleek design, internet ready capability, multiple applications, quality graphics, and amazing sound features give it a sustainable competitive advantage over other mp3 playing devices and has totally removed other media devices (such as a CD player) from the market.

By building a SCA around a firm’s target market group, a business is able to secure their position in the market. This enables a company to minimize competitive pressures and sustain profit margins in the long run.

Combining Marketing Mix with Sustainable Competitive Advantage

Below are a list of ways firms can combine the principles of the marketing mix with strategies for building a sustainable competitive advantage. (Please feel free to read each example given below.)

1. Customer Service Excellence - focuses on customer retention and excellent customer service.
   
   
   
2. Operational Excellence - can be achieved through efficient operations, well regulated supply chain, and human resource management.
   
   
   
3. Product Execellence - can be achieved by having products with high perceived value and effective branding.
   
   
   
4. Location Excellence - Good physical location and internet present.

Marketing Tip #1 -- Understanding the Marketing Mix (aka the 4 Ps)

The Marketing Mix also known as the “Four Ps of Marketing” refers to the four fundamental principles and mindset a good marketer has.

Four Ps / Marketing Mix:

1. Product
   
2. Price
   
3. Place
   
4. Promotion

The marketing mix, also known as the “Four Ps of Marketing,” refers to the four fundamental principles and mindset a good marketer has.

1. Product refers to a good (item) or service that is offered to a specific market group. Ideas or intellectual property (IP) can also be considered a product in today’s business environment.
   
   
2. Price generally refers to the cost to acquire a specific good or service. Price can be measured monetarily (purchasing a good/service using money) or service deeds (an exchange of service between two or more parties.)
   
   
3. Place refers to the ability to deliver a desired good or service to a customer. Place encompasses the total delivery process from supply chain management to retail location.
   
   
4. Promotion is about being able to communication value to customers.

Website Design Tip #7 --Adding Background Music to Your Website

Background Music

Before you start, you should be aware that background music that automatically starts playing when a web page is loaded may not be appreciated by a large number of your visitors. Some of them, when greeted with the sudden blaring of music from their speakers, may immediately hit the "BACK" button on their browser. This may occur even if you're playing a piece of music that you think is well loved by everyone. Keep in mind, that there are people who are online in public libraries, at work, or at night when others are asleep.

Step 1
Find a music or sound file that you'd like to use. Midi (.mid) is usually good sound format to use because midi files are generally and load quickly. The downside is that midi filds are not common and will usually require a audio-conversion. You can convert audio files at: Media Convert

You can also use .mp3 or .wav (wave) music file, but keep in mind that if you do, it will take the music longer to load because the file size will be larger. As a result, the music file's playback will be choppy and could slow the visitor's computer (especially if your website visitor has a dial-up connection).


Step 2
Next, upload the music file to your web server either using an FTP program or your web host's file management control panel. click for more information about website hosting. If the music file has a long name like: "dancehallcityjam.mp3" shorten the file name. Shortening the file name will decrease the probabily of upload and playback problems for your website. In this example, try shortening the file name to "dancehall.mp3"


Step 3
Now open the web page you want the song to load with using either a website editor or notepad. You will have to insert the following HTML code into your site, but first you'll need to edit it.



You will need to change the code above to match your audio file. In our example above, if you shortened the audio file to "dancehall.mp3" you would input that in place of "musicfile.wav"

Thus: for our embeded example: