Evaluating Apple’s marketing performance

What is marketing metrics?

The set of measures that are used by marketers to quantify, compare, and interpret marketing performance is known as marketing metrics. The evaluation of performance against organizational goal analyzed from numeric data is known as marketing metrics. The efficiency of marketing exercise of an organization are estimated using statistical data.

metrics

Why do organizations need metrics?

Organizations spend a lot of their financial plans on marketing endeavors since they comprehend that a business must be compelling if individuals know about the items and services offered by them. Since so much time and cash is spent on these advertising effort, wastefulness in these endeavors can injure to an organization’s fortunes. Subsequently, organizations by and large need to make principles to judge the viability of marketing. The effectiveness of the marketing strategy could be measured by marketing metrics.

 

How to evaluate marketing performance?

The marketing performance could be assessed by the following marketing metrics types. Memory metrics, Behavioral metrics, Financial metrics, Customer profile metrics and physical availability metrics.

Apple’s Marketing Metrics 

apple_logo_2015_03Financial metrics: In any business campaign, there is a definitive point to produce beneficial deals. Shareholders, advertisers anticipate that organization will amplify benefits to have most elevated profit for their speculations. For this organization use financial metrics to quantify deals incomes, minimize overhead costs, expanding gross edges and overseeing ventures to suitable hazard and expected returns (Lenskold, 2003).

ROI: The amount of profit generated by an organization for each dollar invested in the organization is known as Return on invested capital (ROIC).It links the corporate’s performance to valuation. The organization’s return on capital could be truly measured by ROIC. The Market bothers over the   values assigned to the organization that produce the most return over capital invested.

t1

It is obvious that Apple tops the market for return of investment share for capital according to the third quarter for the year 2016. Apple has exceptionally produced high profit for every dollar invested compared to other companies.

 

Behavioral metrics consist of sale, market share, market penetration, purchase frequency, share of category requirements, solely loyal customers, defection rate, and customer complaints and recommendations. In the other word, it have to consider how many unit did company sell? How much market share does company hold? How often do clients purchase? (Sharp, 2013).

t3t2

From financial results of apple inc. for the business year 2016 it can be seen that the company is doing good in terms of sales and market share. The quarterly net income is $7.8 billion and the revenue is $42.4 billion. The diluted earnings per share is $1.42. The gross margin is 38 % and international sales accounted for 63 % of quarter’s revenue. However, all of the figures when compared to the previous year has reduced slightly. Despite the slight decrease it can be inferred that the demand for the company’s products remain strong. The investors were returned $13 billion as dividends and share purchases.

Memory metrics: Memory metrics portray data that buyers have in their recollections in connection to a product or a brand. In addition, this measurement include brand awareness, brand image associations, mental availability, attitude, customer satisfaction and service quality, and Intention to buy a brand in the future (Sharp, 2013).

One doesn’t purchase smartphone, one buys ipod. One doesn’t purchase pc, one buys MacBook. Apple just doesn’t want to dominate the sales, but they want to inherit their own market. Hence customers have a strong mental connection with apple products which would make them compare other products to iPad, iPhone. Among the top selling smartphone brands in the US, iPhone has been rated 85 on a 0-100 scale according to the American Customer Satisfaction Index by US consumers. Apple has proved to be exceptional in building a reputation among the people that they innovative in designing and making unique products and gaining loyal customers.  With Apple’s service business growth 19 percent every year it ranks second highest in customer service satisfaction which is an all-time record.

 

215232279 / Gayathri Subramanian  

References

Investor.apple.com. (2016). Apple – Annual Report. [online] Available at: http://investor.apple.com/secfiling.cfm

Apple Newsroom. (2016). Apple Reports Third Quarter Results. [online] Available at: http://www.apple.com/newsroom/2016/07/apple-reports-third-quarter-results.html

Anon, (2016). [online] Available at: http://images.apple.com/newsroom/pdfs/q3fy16datasum.pdf

Theacsi.org. (2016). The American Customer Satisfaction Index Smartphone Brand Satisfaction Benchmarks. [online] Available at: https://www.theacsi.org/customer-satisfaction-benchmarks/benchmarks-by-brand/benchmarks-for-smartphones

Sharp, B. (2013), Marketing: Theory, Evidence, and Practice. Oxford University Press, Melbourne, Australia.

 

 

Advertisements

Key Marketing Metrics to Facilitate Marketing Strategy.

The Strengths and Weaknesses of any existing business is through the eyes of the Customers. To find out what the Competitors are doing can all be realized when Businesses are able to monitor marketing metrics. If something is important to a Company, people are going to want to know how the Company does it and therefore it needs to be measured (Iacobucci, 2013)

In the conduction of these measures, it is very crucial for a Business to conduct an assessment phase and the strategic planning phase. Below are some of the measures that a Company may conduct over the Company goals.

  1. The Company needs to keep a close watch on the company’s profitability and must be able to measure this.
  2. The Company must also measure indicators of customer and employee satisfaction
  3. There has also been measures made on the Company’s dashboard. This may include other operating costs such as spending made on fuel and many other multiple dimensions in which can be measured.

Such measures can confirm whether a Company is performing and whether it has advantages over its competitors whilst other measure may confirm existing problems that the Company may strive to improve.

A single dashboard below gives a Company an indication of whether it is performing or otherwise.

http://key marketing Metrics to Facilitate Marketing Strategy.docx

The dashboard gives that a Company’s sales, market share are good. Profit margins is at a 50/50 position, not good nor bad, whilst Employee Satisfaction and Customer Satisfaction are in a very bad position for the Company. Moreover, the dashboard measures gives that the particular brand operates in a Monopoly like conditions, Sales and shares are very strong as the Customers does not have many alternatives, this however creates employee and customer in satisfaction. The Company’s low profit margins indicates that the Company is not managing its cost very efficiently. (Iacobucci et al)

Ambler (2008) discusses what marketing metrics can do for any organization:

  • Brands’ activities in the market; for example, new product launches, price increases, changes in pack size, and so on
    • How the market is reacting to these changes; for example, how buyers are buying, at what prices, and so on
    • How brands’ market-based assets are holding up

Marketing metrics gives a baseline, which checks and balances and that Marketing performance, should be assessed using a combination of short-term cash flow, or profit, compared with a valid benchmark, e.g., a plan, and a proxy for the change in future cash expectations due to the marketing activities for a given period.

The Financial Measurement of Marketing Performance

Managers would like a single number, representing profit in some way, for each alternative ways of meeting customer needs. The plan selected would be the one with the highest number would be selected. They would like to assess performance by comparing the actual resulting number with the one predicted in the plan.  We call this single number a “silver metric”, and it is the common goal of a number of methodologies such as ROI or DCF.

ROI

Return on investment (ROI) is used to compare capital projects where investments are made once and the returns flow during the following years. ROI is the net return divided by the investment or, more correctly, the incremental profit as a ratio of the incremental expenditure.

  • ROI has become a fashionable term for marketing productivity and used to describe any type of profit arising from marketing activities.
  • ROI gives Incremental sales revenue
  • Ratio of cost to revenue
  • Cost per sale generated Changes of financial value of sales generated
  • Cost of new customer (sic)
  • Cost of old customer retention

DCF

Discounted Cash Flow is the basic methodology for a number of apparently different techniques: net present value (NPV), brand valuation (Perrier 1997 cited in Amber 2002), customer lifetime value (CLV, Venkatesan and Kumar 2004; Gupta and Lehmann 2005), customer equity (Rust, Lemon, and Zeithaml 2004) and, usually, brand valuation (Ambler et al.2002).

This techniques can be used to compare alternative investments and also for regulating utility prices. There are few issues with the  usage of DCF techniques for performance evaluation due to time, planning and comparison of alternative future scenarios; however, whatever the tools deployed, the performance of any organisation depends largely on its intended usage and positive outcome received.

Baker, (2016) in AdNews states that, Facebook admits to over – inflating key video view metrics. There was an error being reported in the video view metrics where it concluded that the average time watching video has been inflated by 80%. The Wall Street Journal has pointed out that publishers are impacted by this error as they were given incorrect information on how much time users are spending with their video content. Facebook confirmed that they had discovered an error on how they calculate their video metrics.

There may be flaws in measuring Metrics for any Businesses, hence this is something businesses must carefully and thoroughly conduct so that customers are not affected. Mintz (2013) finally states for managers to employ both marketing and financial metrics to assess the performance of the marketing mix activity. There may be financial uncertainty encountered, however it is expected that the greater the number of marketing versus metrics employed, better decisions are perceived for better performances.

By Jacinta Tupuola-Maua

212369336

Reference List:

Ambler, T, Roberts, JH (2008). Assessing marketing performance: Don’t settle for a silver metric

Griniute, Ilona, (2012) Measurement of Marketing Communications Performance:

Iacobucci, D. (2013) Marketing Management, MM4, Student Edition.

Mintz, O, Currim, IS (2013). What drives managerial use of marketing and financial metrics and does metric use affect performance of marketing mix activities?

Measurement%20of%20Marketing%20Communications%20Performance.docx#ROI

A system of marketing metrics

http://www.adnews.com.au/news/facebook-admits-to-over-inflating