Tag: Marketing Blog

The Risks of Poor Strategy for Marketers in a New

Posted on by The University Marketing Blog

To put it simply, these risks occur when the promise of a strategy does not deliver as it is planned prior to implementation. McDonald (et al. 2014) categorises the major concern into five areas.

Target Market Risk

This can be caused as a result of poor research or poor segmentation and increases in the likelihood of occurring if the target market is not homogenous or doesn’t have a key common characteristic.

The risk is that the target market is wrongly identified and understood and the offering wither doesn’t reach this segment or is not offered the product/service correctly.

Proposition Risk

This is the risk of your offering not being purchased due to being poorly communicated or being a service/product with little to no demand.

This risk can be reduced by offering a differentiated product to different segments as opposed to one mass offering that may come across as too generic for a consumer to proceed to purchase.

SWOT Risk

This is an analysis tool that identifies the companies Strengths and Weaknesses as well as the external Opportunities and Threats. If this is done poorly, the risk is that the company may offer a product that doesn’t utilise a strength or it may miss an opportunity.

A thorough analysis can reduce the risk of a strategy by correctly seeing the best area to enter a market by utilising organisational strengths.

Uniqueness Risk

Similar to proposition risk, but if the strategy is similar to a direct competitor, there is an increase risk of failure or reduced profit margin. This applies to the product as well, there must be some differentiating factor to make the product stand out from the rest to minimise the risk of strategy not being as successful.

Future Risk

The risk that your strategy fails to take into account the trends in the market. While it can be impossible to predict the future trends to 100% accuracy, research can allow a strategy to identify potential risks and opportunities that may arise and allow room to adapt to these. This can be the key to gaining and sustainable competitive advantage.

References:

McDonald, Malcolm, Peter Mouncey & Stan Maklan (2014) Marketing Value Metrics: A new metrics model to measure marketing effectiveness. Kogan Page: London.

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Profit Risks Marketers Must Consider in a New Market

Posted on by The University Marketing Blog

When entering a new market or segment there is always the calculations for expected return on investment. These risks are centred around that ROI being as high as anticipated and the causes for it.

Profit Pool Risk

This risk occurs when the potential profit pool in a market is reduced as a result of a reaction to the strategy you implement. If stronger competitors react and match your strategy with their own, they can severely limit your ability to profit in the segment. There may be multiple competitors all fighting for market share that can all react to the new market conditions and effectively shut you out.

Competitor Impact Risk

While similar to profit pool risk, this risk is focused towards a single competitor. If you enter a market with a strategy that targets a very similar market to one competitor and they react effectively, they alone can prevent your success. A good example of avoiding this would be Fitbit entering the wearable technology market but not directly competing with a powerhouse like Apple.

Internal Gross Margin Risk

This occurs when a company underestimates the costs of production and distribution which results in their end profit margin being very slim and having no room to drop to match a competitor’s price.

Profit Source Risk

Due to a competitors reaction, your profit margin may be reduced when you have to price match. Entering a market with the intention on taking market share purely from the market leader who will in turn be able to beat you on pricing the majority of the time.

Other Cost Risks

Costs that may not be immediately obvious might add up to more than expected and reduce you ability to make any significant returns on investment. This can be prevented by careful calculations of all extra costs and being realistic with these numbers to avoid optimistic disappointments.

References:

McDonald, Malcolm, Peter Mouncey & Stan Maklan (2014) Marketing Value Metrics: A new metrics model to measure marketing effectiveness. Kogan Page: London.

The Main Risks When Entering a Market

Posted on by The University Marketing Blog

When entering a market, there are several factors that contribute to the success of a product or brand. McDonald (et al. 2014) identifies five significant risk factors to take into account when entering a market with a particular increase in risk when less is known about the market

Product Category Risk

This risk is essentially the entire product strategy may be smaller than what your calculations allowed for. This would not be as big of a risk with a product diversification as the history of the product will give you the insights to understand the category.

For this reason, this risk becomes significantly greater when implementing or releasing a new product when there is an element of unknown about the category’s size.

Segment Existence Risk

While someone self explanatory, the risk of this category is that the target segment you have chosen is smaller than you initially thought or doesn’t really exist at all. With a smaller segment comes less profit, especially if your production is built around catering for a large segment.

Sales Volume Risk

Similar to the above risk, if the segment is smaller than anticipated, sales will be fewer. For some products to be profitable they must sell in large quantities, these products are what will be impacted my by this risk. More comprehensive research can provide a risk reduction to manage with this.

Forecast Risk

This risk focuses on market growth. If you plan for the market to experience significant growth and it reaches maturity early, this can be the demise of a product or brand. While research can help in reducing this risk, history may not paint the most accurate picture for future predictions.

Pricing Risk

This risk occurs when the pricing levels in the market are lower than initially calculated. As a result you will have to reduce price to remain competitive but most likely reducing profit margin as well, it becomes lear how this can be detrimental to a company.

References

McDonald, Malcolm, Peter Mouncey & Stan Maklan (2014) Marketing Value Metrics: A new metrics model to measure marketing effectiveness. Kogan Page: London.

The Best Marketing Metrics

Posted on by The University Marketing Blog

It is a big ask to know and understand the infinite metrics that can exist. So, what are the key areas to focus on?

Every market and business within that market are unique and require different metrics to deliver the information they need for their goals. Instead of narrowing it down to a top 5 list of metrics, I will instead narrow it down to major areas to focus on as recommended by Bendle (et al. 2016).

Share of Hearts, Minds and Markets

This are can provide value in understanding how you stack up against your competition and could consist of market share as the base. Beyond this, it could incorporate customer loyalty, brand awareness and customer satisfaction.

Product and Portfolio Management

This area shifts focus away from the market and towards your organisation itself. Here, you want to be measuring annual growth, market penetration of products and how each segment compares and makes up the whole of your business.

Margins and Profits

It seems mostly self-explanatory but this area can consist of metrics such are profit margin, price per unit, business spendings, revenue and volume targets. The core of most business will involve these metrics and be an accounting heavy area.

Customer Profitability

Here the focus clearly goes onto your customer or target market with metrics aiming to measure things like customer life time value, number of customers, customer retention and how much it costs to acquire customers.

Promotion

Metrics are aiming to measure areas such as baseline sales, coupon sales, cost of coupons/rebates and percentage of sales with a deal or discount.

Advertising

Metrics aim to measure number of impressions, cost per thousand impressions (CPM), frequency, effective reach and share of voice just as a starting base of this area.

Sales Force and Channel Measurement

This are has a bigger picture focus on measurements such as workload, sales goals, total distribution and inventory information.

Pricing Strategy

Metrics should be measuring price elasticity, optimal pricing, price premium and reservation price when used in this area.

Conclusion

While there is no ‘golden metric’ there are plenty of useful ones. They must be used when relevant to your business and business goals but as a starting point, the above 8 areas of metrics are a starting point that can help paint a clearer picture of business operations.

References:

Bendle, NT, PW Farris, PE Pfeifer & DJ Reibstein (2016) Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance, 3rd edition. Pearson: New Jersey.

How to Choose a Valuable Marketing Metric

Posted on by The University Marketing Blog

For a metric to serve a positive purpose to a campaign it must be worth the time to analyse what it measures. There is not point having 50 metrics that measure the same data as ONE effective metric.

The Value of a Metric

Given the fact that there is literally a limitless number of potential metrics there comes a point where they are no longer adding value to the measurement or overall goal. A common identification is using the process of data –> information –> knowledge. If we ask “will this create knowledge” and the answer is no, we can safely say that the data that the metric is measuring is of no value to the bigger picture.

To make a metric valuable, the information that has been gathered from the data can often be transformed into visual forms that enable a better understanding of the information and therefore increasing the likelihood of converting that information into knowledge.

Metrics are of more value and use in markets of stability. Measuring sales as a means of predicting future sales is useful for an item like milk or other FMCGs. This metric has less value in terms of predicting when it comes to something like fashion that is very subjective and may experience high or low sales depending on the opinions of the audience that year.

Metrics can also have a complimentary relationship and increase their value when used in conjunction. This becomes more of the case when it is a complicated measurement being sought. Various metrics are more likely to give the valuable, big picture rather than a distorted single metric leading you in the wrong direction.

Summary

Like most things, the larger the test means more data and usually more accurate knowledge at the end of the process. To conclude, a clear definition must be decided on then data must be communicated effectively and can be more useful at predicting stable markets and enhanced further through the addition of complimentary metrics.

References:

Bendle, NT, PW Farris, PE Pfeifer & DJ Reibstein (2016) Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance, 3rd edition. Pearson: New Jersey.

An Introduction to Marketing Metrics

Posted on by The University Marketing Blog

Any successful marketing campaign is now marked with the data to prove and confirm its success. Metrics are the measurements that express the success, in this case, of marketing efforts.

What is a Metric and Why Use Them?

In its simplest form, a metric is a measurement. As a marketer, it can be used to identify trends or segments in a market and even predict future performance. This can enhance the understanding of populations to improve the accuracy of certain aspects of marketing efforts.

Why have them? Today, we live in a time of numbers. No high level or significant decision can ever really be made without so proof it might work. Quantitative data is the proof that marketers need to justify their decisions. It allows goals to be set, measured and then evaluated. Marketers can now prove their worth.

Which Metric to Use

When it comes to using one single metric, it paints only half (actually much less than half) a picture. Using multiple metrics allows different perspectives and increased accuracy. When multiple factors are in play, it is important to then understand how they impact each other and exactly what their relationship is.

Effective metrics allow strategy to be measured from various angles with failure and success both being identified in a quantifiable form.

When attempting to measure anything, the first step has to be knowing what you are measuring and identifying a definition of the term. As definitions of vague concepts can change from organisation to organisation, the definition set at the beginning of the campaign must be stuck with to ensure the relevance and accuracy of the metric.

References:

Bendle, NT, PW Farris, PE Pfeifer & DJ Reibstein (2016) Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance, 3rd edition. Pearson: New Jersey.

Using Content Marketing as a Tool to Establish Expertise

Posted on by The University Marketing Blog

When operating a business in a certain market it is expected or at least common for that business to have the know-how or expertise regarding the market or industry in general.

An example of this would be a garden centre being somewhat of an expert on plants that thrive in the local climate. This knowledge can create great content for the nearby market that places its brand ahead of other local competitors. There are four main methods used to establish this sense of expertise.

Text-Based Medium

This can come in the form of blogs, articles, reports or analysing a case study. This can provide great depth in a certain topic that has the primary goal of informing the audience of your expertise or leading them to a place where they can access more information.

Books and E-Books

Essentially, this is an expansion from the article or blog post. This can provide another source of revenue for your business or can be used to simply build brand awareness and given out for free or at a low price point.

If your brand has a great depth of knowledge on a topic, there is no other major barrier preventing a book than the time it takes to get pen to paper. This can have widespread traction for your business depending on the appeal of the book to the market.

Guest Posting

Most common in the form of blogging or collaboration on YouTube/social media. If you can find a mutually beneficial reason for an influential figure in your market to post your content, this can cement your position as an expert in your field or market.

An example is in the world of fitness. If a nutritionist wants to cement their expertise, they can reach out to a fitness influence and get them to share the content. It is mutually beneficial as it is relevant to the influencer’s audience and allows awareness to be spread for the nutritionist.

Video

Video has various applications from interviews (including collaborations), demonstrations of a product through to informative lessons for your audience. This adds an extra dimension of connection and can be particularly useful for visual learners in your audience.

References:

Zimmerman, J. and Ng, D. (2017) Social Media Marketing for Dummies: All-in-one. 4th Edition, Wiley, Hoboken, New Jersey.

How Lifestyle Marketing Will Reach You

Posted on by The University Marketing Blog

Have you ever been to a large event such as a football game, festival or market and been given a free sample?

You’ve been targeted.

This form of marketing is used as an alternative approach to the marketing mix and traditional methods.

It is very common for free samples to be given out as it almost removes all sense of risk when trying a new product. Red Bull have done this frequently in the past at sporting events, busy areas such as Bondi Beach and shopping malls. It is even more common and Red Bull sponsored events such as their diverse range of extreme sports. This is a concentrated population of their target market all in one place. A marketers dream.

If you walk through a shopping mall there will quite often be free samples. A great case of this would be a makeup artist giving out a free application in the hope you will buy the product. This is another example of lifestyle marketing where a brand has reached its target market in large numbers through anyone who is in that shopping mall.

While it may seem simple, this approach can be very effective in having a very specific target and not just handing out a waste of free samples.

It has numerous benefits such as brand awareness and word-of-mouth which have a great flow-on effect that can boost sales immensely.

While it may not be something to avoid and watch out for, it is something, from a consumers point of view, that has a deeper purpose than merely a free sample.

References

K.E. Clow and D. Baack, (2018) Integrated Advertising, promotion, and Marketing Communications:, 8th edition, Pearson.

How Content Marketing Can Make You More Sales

Posted on by The University Marketing Blog

Genuine content doesn’t want to come across as a sales pitch but for the majority of organisations, sales are the end objective.

However, there are some subtle methods to incorporate the suggestion to purchase or lead to future sales through content marketing.

Call to Action

This can be particularly useful for how-tos. In this case, you could provide a full directional guide to assist the consumer where you avoid a sales pitch so you do not detract from the material.

The closing pitch can be a link to the best place to purchase the items or ingredients needed to follow the instructions in the how-to. This is where you can link your business to provide customers with an immediate and convenient point of purchase for the items you now know they need.

Newsletters

This can be an effective means of gaining loyal customers who can receive their regular discount as part of their subscription. This may also provide another means of value-adding to the mix with some top tips or reads for the week.

In the case of this blog, a newsletter serves the purpose of information providing. While it isn’t a means of improving sales, there are no sales objectives of this blog that has no offerings. Usually, the sales goal can incorporate the newsletter very effectively.

Answer Customer’s Needs

Content can provide a large scale means of answering common questions regarding your business. This may not directly lead to immediate sales but the helpful advice can build a brand image that allows you to enter the customers evoked set.

Customers will often scream out for what they want. Listen and respond. They essentially provide the topic of your content for you. Relevant content will always be more immediately helpful and can leave the customer feeling even more satisfied with your business.

Keep the Sales Pitch Minimal

Direct mention of sales is irritating to read in the middle of helpful content. The brand can attract sales through being in their mind when the customer needs a certain product rather than them being annoyed by 10 irrelevant sales pitches beforehand.

References:

Zimmerman, J. and Ng, D. (2017) Social Media Marketing for Dummies: All-in-one. 4th Edition, Wiley, Hoboken, New Jersey.

The Rise of Buzz Marketing

Posted on by The University Marketing Blog

Buzz marketing is best described as the modern evolution of word-of-mouth.

The effectiveness of this form of marketing can be diverse as it travels through various mediums and given the nature of word-of-mouth, consumers tend to trust it a lot more.

Buzz marketing is most commonly found on the internet but in many different forms. It can be in chat rooms, blogs, reviews, emails and social media.

Stages of Buzz Marketing

Inoculation starts off the process with the creation or release of a product to the market.

Incubation, as it sounds, is a brewing phase that consists of the innovators and early adopters using and talking about the product.

Infection is the final stage where the product has gained good traction is now existing in the majority of the market and growing somewhat exponentially due to the nature of word-of-mouth.

Who Creates the Buzz?

Ideally, every employee of a company would positively endorse their organisation’s products and inform their friends and family of the product if it aligns with their values.

Ambassadors are another great means of individuals who can spread the word. Today, in the world of social media, micro-influencers can be particularly effective. The key to success here is a mutually beneficial ambassadorship that appeals to the influencer’s audience as well as the brand’s. Sponsorship can be less effective with an influencer’s audience being less trusting of paid advertisements.

Anyone. The beauty of buzz marketing is that word-of-mouth can be spread by anyone and everyone. If there is an encouragement to spread the word of positive experiences regarding the product or service, it may help but the nature of the concept is that a good product will naturally get people talking.

References

K.E. Clow and D. Baack, (2018) Integrated Advertising, promotion, and Marketing Communications:, 8th edition, Pearson