Tag Archives: marketing mix

IBM Survey Identifies Key Attributes of Leading Marketers

 

IBM recently published the findings from its 2013 Global Survey of Marketers. You can view a presentation of the findings here. The 2013 survey included more than 500 marketing professionals worldwide from more than 15 industries.

As you might expect, the top marketing challenges identified by survey respondents were:

  • Acquiring new customers (42%)
    • Retaining existing customers and improving loyalty and satisfaction (35%)
    • Creating consistent, relevant and positive customer experiences across channels (34%)
    • Understanding social media and using social channels effectively (34%)

In analyzing the survey results, IBM identified a group of “Leading Marketers” based on their ownership of the customer experience across channels and their use of marketing technologies. As a group, the Leading Marketers delivered superior financial performance than “all other marketers” on three financial measures.

  • 3-yr Gross Profit Growth – Leading Marketers 1.8x higher
  • 3-yr Net Income Growth – Leading Marketers 3.4x higher
  • 3-yr Stock Price Growth – Leading Marketers 2.4x higher

IBM identified numerous differences between Leading Marketers and all other marketers, and the table below shows just some of the major differences revealed by the survey responses.

BLog Post 78 - Table 1

I would suggest that one of the most important differences between Leading Marketers and other firms is that Leading Marketers take a broader view of marketing responsibilities. For example, the IBM survey asked participants to rate the effectiveness of their marketing organization in performing across all 4P’s of the marketing mix. The table below shows the percentages of Leading Marketers and all other marketers who rated themselves as highly effective across the 4P’s. Notice that the least difference between Leading Marketers and all other marketers is in the area of promotion.

Blog Post 78 - Table 2

In an earlier post, I argued that marketers must focus on all components of the marketing mix if they want to reclaim their strategic role in the C-suite. The results of the IBM survey demonstrate the importance of taking a more holistic view of marketing’s role in the enterprise.

Digital Strategy Most Popular Among B2B Marketers

The most popular marketing tactics used by B2B companies are digital, according to the Sagefrog Marketing Group. When asked which of 16 common marketing tactics they use, 94% of B2B marketers pointed to websites, followed by email (76%), social media (68%), and SEO (58%). More traditional tactics such as direct marketing (48%), tradeshows (46%), seminars (44%), and print ads (35%) appeared further down the list, though they are more popular than search engine marketing (30%), webinars (26%), and online ads (25%).

Digital channels are among the highest sales leads providers. Online marketing and email marketing were named as the top sales leads providers after referrals. The top-3 was followed by tradeshows and events, public relations and direct mail. The popularity of digital channels may also be explained because they provide the best Return on Investment (ROI): online marketing and email marketing are top of the list, according to the report, outranking more traditional, offline marketing strategies such as tradeshows and direct mail. Read More…

Optimizing Your Marketing Mix in a Multi-Channel World

Fifty years ago, optimizing the media mix was relatively easy. The channel mix was relatively manageable. Companies selected from a mix of national and local magazines, newspapers, broadcast television networks, radio and large industry trade shows. By the 90s, channel options became a bit more complex; with cable television, segmented direct mail and a bevy of trade publications and trade shows added to the mix. Today the media mix has exploded to include new digital channels such as social networks, SEO, online advertising, virtual events, email, and mobile. All of these marketing vehicles reinforce the importance of ascertaining the effectiveness and efficiency of your marketing channel investments; increasing the emphasis on marketing mix modeling and optimization.

What Is a Marketing Mix Model?
Marketing mix models are needed when you want to quantify the sales impact of various marketing activities and determine effectiveness and ROI for each marketing activity. Marketing mix modeling uses statistical analysis such as multivariate regressions on sales and marketing time series data to estimate and forecast the impact of various marketing tactics on sales. Regression is the workhorse for mix models. Regression is based on a number of inputs (or independent variables) and how these relate to an outcome (or dependent variable) such as sales or profits or both.

Once you have the statistics to create the model you can use these equations to figure out how to optimize your mix. This is known as Marketing Mix Optimization. You will want your model to account for direct as well as indirect effects and take things outside of your contract (such as the time of year, interest rates, exchange rates, gas prices, elections, competition, etc.) into account. Developing a marketing mix optimization model requires good data and strong analytical skills. You may find it prudent to partner with your finance organization to co-author the model. This will also help to generate a buy-in from the sales and leadership team.

When does it make sense to use a marketing mix model? For example, when you are trying to answers questions such as:

  • What happens if the economy changes by X?
  • What happens if we reduce/increase the marketing budget by Y?
  • What happens if the competition adds Z to their media spend or reduces their price?
  • What if we have to hold our touch points to the current mix, what is the optimal mix of these?
  • What is the optimal mix for our current budget?

However, the marketing mix model needs to support your overall organizational outcomes, marketing objectives, and metrics and performance targets. Optimizing a mix that will not enable you to achieve your outcomes and objectives may make you more efficient but will not make you more effective. If you are not meeting your performance targets or industry benchmarks, you may want to revisit your execution before you adjust your mix and spend.

How to Build a Marketing Mix Model
So you’re ready to build your model. What are the steps and what data will you need? Data is the key to being able to perform analytics. So the first step is to determine what data is going to go into your model. Common types of data include:

  • Monthly/Weekly sales data with causal factors
  • competitive information
  • monthly/weekly marketing spend by touch point (channel, promotion, etc)
  • customer demographic and other data
  • industry data
  • distribution data
  • product category data
  • economic and other data that impacts customer buying decisions

Things such as your data quality, the breath of internal and external data, the granularity of your data, the accuracy of your historical marketing data, the robustness of your statistical functionality, and the technical architecture to support the model construction all impact the quality of your model.

Optimizing Your Model
Once you have the data you can construct a prototype. Seven steps are important to finetuning your model:

  1. Test the predictive ability of the model on a hold out sample
  2. Refit using all the data and predict the future – remember to account for indirect effects and things out of your control in the model
  3. Compare actual to forecast sale performance and determine incremental revenue
  4. Apply financial data and determine ROI
  5. Model the influence of individual factors
  6. Simulate the impact of different marketing activities
  7. Develop and deploy the optimal marketing mix

We live in a dynamic environment and our channels are just as dynamic. Therefore, you will want to refresh your models quarterly and rebuild them at least annually. Building a marketing mix model may be one of those tasks worth outsourcing to the experts if you don’t have the analytical skills to develop your model or access to internal resources that can help.
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Online Seminar: New Approaches to Maximize Your ROI

Tomorrow, 12pm ET (9am PT), MarketingProfs will host a free online event to help you get the most from your marketing mix and maximize ROI.

Marketing mix modeling has long been a reliable measurement for consumer packaged goods companies. Now, it’s proving to be a great planning and measurement tool that increases profits in many diverse B2B and B2C industries beyond its traditional use. By using historical sales and marketing data, companies employing marketing mix modeling can forecast how particular marketing tactics will impact future company revenue—and what can deliver the maximum ROI. But while such modeling provides invaluable insight, it’s also a big, complicated job.

Read More…

Measuring Marketing Impact

Businesses rely on solid marketing strategies to boost sales—yet the tools used to evaluate these strategies often provide misleading results, leaving managers with the inability to accurately measure how they can get the best bang for their marketing buck, according to an article by Dina Gerdeman. Find a shortened version of the article below.

Thomas J. Steenburgh, associate professor at Harvard Business School, has developed a new analytical tool that more accurately measures the effectiveness of various marketing efforts. Steenburgh and his co-authors Qiang Liu and Sachin Gupta believe that the model could help brand managers determine which marketing strategies work best to invest in. Read More…