Marketing Metrics: 50+ Metrics Every Executive Should Master

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9780131873704: Marketing Metrics: 50+ Metrics Every Executive Should Master

Few marketers recognize the extraordinary range of metrics now available for evaluating their strategies and tactics. In Marketing Metrics, four leading researchers and consultants systematically introduce today's most powerful marketing metrics.  The authors show how to use a "dashboard" of metrics to view market dynamics from various perspectives, maximize accuracy, and "triangulate" to optimal solutions. Their comprehensive coverage includes measurements of promotional strategy, advertising, and distribution; customer perceptions; market share; competitors' power; margins and profits; products and portfolios; customer profitability; sales forces and channels; pricing strategies; and more.  You'll learn how and when to apply each metric, and understand tradeoffs and nuances that are critical to using them successfully. The authors also demonstrate how to use marketing metrics as leading indicators, identifying crucial new opportunities and challenges. For clarity and simplicity all calculations can be performed by hand, or with basic spreadsheet techniques. In coming years, few marketers will rise to senior executive levels without deep fluency in marketing metrics. This book is the fastest, easiest way to gain that fluency.

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About the Author:

Paul W. Farris is Landmark Communications Professor and Professor of Marketing at The Darden Graduate Business School, University of Virginia, where he has taught since 1980. Professor Farris’ research has produced award-winning articles on retail power and measurement of advertising effects. He has published many marketing articles in publications such as the Harvard Business Review, Journal of Marketing, Journal of Retailing, and Marketing Science. Farris is currently working on methods for integrating and improving marketing metrics. He is author or co-author of several books, including Advertising Budgeting: A Report from the Field. Farris’ consulting clients range from Procter & Gamble, to Apple and IBM. Before moving to Virginia, he taught marketing at the Harvard Business School and also has worked in product management for Unilever, Germany and account management for the LINTAS advertising agency. He is a current and past board member for several U.S and international companies.

 

Neil T. Bendle is a Ph.D. student in marketing at the Carlson School of Management, University of Minnesota. He holds an MBA from Darden, and has nearly a decade’s experience in marketing management, consulting, business systems improvement, and financial management. Bendle was responsible for measuring the success of marketing campaigns for the UK’s Labour Party.

 

Phillip E. Pfeifer, Alumni Research Professor of Business Administration at The Darden Graduate Business School, currently specializes in interactive marketing. He has published a popular MBA textbook and over 25 refereed articles in journals such as the Journal of Interactive Marketing, Journal of Database Marketing, Decision Sciences, and the Journal of Forecasting. Pfeifer was recognized in 2004 as the Darden School’s faculty leader in external case sales. His teaching has won student awards and been recognized in Business Week’s Guide to the Best Business Schools. His recent clients include Circuit City, Procter & Gamble, and CarMax.

 

David J. Reibstein is the William Stewart Woodside Professor and Professor of Marketing at the Wharton School. His research focuses on marketing metrics and their link to financial consequences, competitive marketing strategy, market segmentation, brand choice, and product line breadth. He has been published in every major marketing journal and has authored or co-authored numerous books. He served as the Executive Director of the Marketing Sciences Institute, and co-founded Wharton’s CMO Summit. Reibstein architected and teaches the Wharton Executive Education course on marketing metrics. He consults with leading businesses, including GE, Shell Oil, HP, Novartis, Johnson & Johnson, Merck, and Major League Baseball. He has served as Vice Dean and Director of Wharton’s Graduate Division, as visiting professor at Stanford and INSEAD, and as faculty member at Harvard. Reibstein was the co-founder of Shopzilla, one of the first product search engines, and serves on several corporate boards.

 

Excerpt. © Reprinted by permission. All rights reserved.:

Foreword

Foreword

Despite its importance, marketing is one of the least understood, least measurable functions at many companies. With sales force costs, it accounts for 10 percent or more of operating budgets at a wide range of public firms. Its effectiveness is fundamental to stock market valuations, which often rest upon aggressive assumptions for customer acquisition and organic growth. Nevertheless, many corporate boards lack the understanding to evaluate marketing strategies and expenditures. Most directors—and a rising percentage of Fortune 500 CEOs—lack deep experience in this field.

Marketing executives, for their part, often fail to develop the quantitative, analytical skills needed to manage productivity. Right-brain thinkers may devise creative campaigns to drive sales but show little interest in the wider financial impact of their work. Frequently, they resist being held accountable even for top-line performance, asserting that factors beyond their control—including competition—make it difficult to monitor the results of their programs.

In this context, marketing decisions are often made without the information, expertise, and measurable feedback needed. As Procter & Gamble's Chief Marketing Officer has said, "Marketing is a $450 billion industry, and we are making decisions with less data and discipline than we apply to $100,000 decisions in other aspects of our business." This is a troubling state of affairs. But it can change.

In a recent article in The Wall Street Journal, I called on marketing managers to take concrete steps to correct it. I urged them to gather and analyze basic market data, measure the core factors that drive their business models, analyze the profitability of individual customer accounts, and optimize resource allocation among increasingly fragmented media. These are analytical, data-intensive, left-brain practices. Going forward, I believe they'll be crucial to the success of marketing executives and their employers. As I concluded in the Journal:

"Today's boards want chief marketing officers who can speak the language of productivity and return on investment and are willing to be held accountable. In recent years, manufacturing, procurement and logistics have all tightened their belts in the cause of improved productivity. As a result, marketing expenditures account for a larger percentage of many corporate cost structures than ever before. Today's boards don't need chief marketing officers who have creative flair but no financial discipline. They need ambidextrous marketers who offer both."

In Marketing Metrics, Farris, Bendle, Pfeifer, and Reibstein have given us a valuable means toward this end. In a single volume, and with impressive clarity, they have outlined the sources, strengths, and weaknesses of a broad array of marketing metrics. They have explained how to harness those data for insight. Most importantly, they have explained how to act on this insight—how to apply it not only in planning campaigns, but also in measuring their impact, correcting their courses, and optimizing their results. In essence, Marketing Metrics is a key reference for managers who aim to become skilled in both right- and left-brain marketing. I highly recommend it for all ambidextrous marketers.

John A. Quelch, Lincoln Filene Professor of Business Administration and Senior Associate Dean for International Development, Harvard Business School


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