question

revenue market share

answer

construction: sales revenue as a percentage of market sales revenue considerations: scope of market definition. channel level analyzed. before/after discounts. time period covered. purpose: measure of competitiveness

question

unit market share

answer

construction: unit sales as a percentage of market unit sales considerations: scope of market definition. channel level analyzed. time period covered purpose: measure of competitiveness

question

relative market share

answer

construction: brand market share divided by largest competitors market share considerations: can use either unit or revenue shares purpose: assess comparative market strength

question

brand development index

answer

construction: brand sales in a specified segment, compared with sales of that brand in the market as a whole considerations: can use either unit or revenue shares purpose: regional or segment differences in brand purchases and consumption

question

category development index

answer

construction: category sales in a specified segment, compared with sales of that category in the market as a whole considerations: can use either unit or revenue shares purpose: regional or segment differences in category purchases and consumption

question

decomposition of market share

answer

construction: penetration share *share of requirements* heavy usage index considerations: can be based on unit or revenue shares. time period covered purpose: calculation of market share. competitive analysis. historical trends analysis. formulation of marketing objectives

question

market penetration

answer

construction: purchasers of a product category as a percentage of the total population considerations: based on population. therefore unit/revenue consideration not relevant purpose: measures category acceptance by a defined population. useful in tracking acceptance of new product categories

question

brand penetration

answer

construction: purchasers of a brand as a percentage of the total population considerations: based on population. therefore unit/revenue consideration not relevant purpose: measures brand acceptance by a defined population

question

penetration share

answer

construction: brand penetration as a percentage of market penetration considerations: a component of the market share formula purpose: comparative acceptance of brand within category

question

share of requirements

answer

construction: brand purchases as a percentage of total category purchases by buyers of that brand considerations: can use either unit or revenue shares. may rise even as sales decline, leaving only most loyal customers purpose: level of commitment to a brand by its existing customers

question

heavy usage index

answer

construction: category purchases by customers of a brand, compared with purchases in that category by average customers in the category considerations: can use either unit or revenue sales purpose: measures relative usage of a category by customers for a specific brand

question

hierarchy of effects

answer

construction: awareness; attitudes, beliefs; importance; intentions to try; buy; trial, repeat considerations: strict sequence is often violated and can be reversed purpose: set marketing and advertising objectives. understand progress in stages of customer decision process

question

awareness

answer

construction: percentage of total population that is aware of a brand considerations: is this prompted or unpromted awareness? purpose: consideration of who has heard of the brand

question

top of mind

answer

construction: first brand to consider considerations: may be subject to most recent advertising experience purpose: saliency of brand

question

ad awareness

answer

construction: percentage of total population that is aware of a brand's advertising considerations: may vary by schedule, reach and frequency of advertising purpose: one measure of advertising effects. may indicate "stopping power" of ads

question

knowledge

answer

construction: percentage of population that is aware of a brands advertising considerations: not a formal metric. is this prompted or unpromted knowledge? purpose: extent of familiarity with product beyond name recognition

question

beliefs

answer

construction: customers'/consumers' view of product, generally captured via survey responses, often through ratings on a scale considerations: customers/consumers may hold beliefs with varying degrees of conviction purpose: perception of brand by attribute

question

purchase intentions

answer

construction: probability of intention to purchase considerations: to estimate probability of purchase, aggregate and analyze ratings of stated intentions purpose: measures pre shopping disposition to purchase

question

purchase habits

answer

construction: frequency of purchase. quantity typically purchased considerations: may vary widely among shopping trips purpose: helps identify heavy users

question

loyalty

answer

construction: measures include share of requirements, willingness to pay premium, willingness to search considerations: "loyalty" itself is not a formal metric, but specific metrics measure aspects of this dynamic. new product entries may alter loyalty levels purpose: indication of base future revenue stream

question

likeability

answer

construction: generally measured vida ratings across a number of scales considerations: often believed to correlate with persuasion construction: shows overall preference prior to shopping

question

willingness to recommend

answer

construction: generally measured via ratings across a 1-5 scale considerations: non-linear impact purpose: shows strength of loyalty, potential impact on others

question

customer satisfaction

answer

construction: generally measured on a 1-5 scale, in which customers declare their satisfaction with brand in general or specific attributes considerations: subject to response bias. captures views of current customers, not lost customers. satisfaction is a function of expectations purpose: indicates likelihood of repurchase. reports of dissatisfaction show aspects that require improvement to enhance loyalty

question

willingness to search

answer

construction: percentage of customers willing to delay purchases, change stores or reduce quantities to avoid switching brands considerations: hard to capture purpose: indicates importance of distribution coverage

question

unit margin

answer

C: unit price less the unit cost C: what are the standard units in the industry? may not reflect contribution margin if some fixed costs are allocated P: determine value of incremental sales. guide pricing and promotion

question

margin (%)

answer

C: unit margin as a percentage of unit price C: may not reflect contribution margin if some fixed costs are allocated P: compare margins across different products/sizes/forms of product. determine value of incremental sales. guide pricing and promotion decisions

question

channel margins

answer

C: channel profits as percentage of channel selling price C: distinguish margin on sales (usual) from mark-up on cost (also encountered) P: evaluate channel value added in context of selling price. calculate effect of price changes at one level of channel on prices and margins at other levels in the same channel (supply chain)

question

average price per unit

answer

C: can be calculated as total revenue divided by total unit sales C: some units may have greater relevance from producer's perspective than consumers (ounces of shampoo vs bottles) changes may not be result of pricing decision P: understand how average prices are affected by shifts in pricing and product mix

question

pricer per statistical unit

answer

C: SKU prices weighted by relevant percentage of each SKU in a statistical unit C: percentage SKU mix should correspond over medium term to actual mix of sales P: isolate effect of price changes from mix changes by standardizing the SKU mix of a standard unit

question

variable and fixed cost

answer

C: divide costs into two categories: those that vary with volume (variable) and those that do not (fixed) C: variable costs may include production, marketing and selling expenses. some variable costs depend on units sold; others depend on revenue P: understand how costs are affected by changes in sales volume

question

marketing spending

answer

C: Analyze costs that comprise marketing spending C: can be divided into fixed and variable marketing costs P: understand how marketing spending changes with sales

question

contribution per unit

answer

C: unit price less unit variable cost C: ensure that marketing variable costs have not already been deducted from price P: understand profit impact of changes in volume. calculate break-even level of sales

question

contribution margin (%)

answer

C: contribution per unit divided by unit price C: ensure that variable costs are consistently based on units or revenue, as appropriate P: same as above, but applies to financial sales

question

break-even sales level

answer

C: for unit break-even, divide fixed costs by contribution per unit. for revenue break-even, divide fixed costs by contribution margin (%) C: variable and fixed cost estimates may be valid only over certain ranges of sales and production P:rough indicator of project attractiveness and ability to earn profit

question

target volume

answer

C: adjust break-even calculation to include target profit C: variable marketing costs must be reflected in contribution margins. sales increases often require increased investment or working capital P: ensure that unit sales objectives will enable firm to achieve financial hurdle rates for profit, ROS or ROI

question

target revenues

answer

C: convert target volume to target revenues by using average prices per unit. alternatively, combine cost and target data with knowledge of contribution margins C: variable marketing costs must be reflected in contribution margins. sales increases often require increased investment or working capital P: ensure that revenue sales objectives will achieve financial hurdle rates for profit, ROI

question

trial

answer

C: first-time users as a percentage of the total population C: distinguish "ever tried" from "new" triers in current period P: over time, sales should rely less on trial and more on repeat purchases

question

repeat volume

answer

C: repeat buyers, multiplied by the number of products they buy in each purchase, multiplied by the number of times they purchase per period C: depending on when trial was achieved, not all triers will have an equal opportunity to make repeat purchases P: measure of the stability of a brand franchise

question

penetration

answer

C: users in the previous period, multiplied by the repeat rate for the current period, plus new triers in the current period C: the length of the period will affect norms, that is, more customers buy in a year than in a month P: measure of the population buying in the current period

question

volume projections

answer

C: combine trial volume and repeat volume C: adjust trial and repeat rates for time frame. not all triers will have time or opportunity to repeat P: plan production and inventories for both trade sales and consumer off take

question

year-on-year growth

answer

C: percentage change from one year to the next C: distinguish unit and money growth rates P: plan production and budgeting

question

compound annual growth rate (CAGR)

answer

C: ending value divided by starting value to the power of 1/N, in which N is the number of periods C: may not reflect individual year-on-year growth rates P: useful for averaging growth rates over long periods

question

cannibalization rate

answer

C: percentage of new product sales taken from existing product line C: market expansion effects should also be considered P: useful to account for the fact that new products often reduct the sales of existing products

question

fair share draw

answer

C: assumption that new entrants in a market capture sales from established competitors in proportion to established market shares C: may not be reasonable assumption if there are significant differences among competing brands P: useful to generate an estimate of sales and shares after entry of new competitor

question

brand equity metrics

answer

C: numerous measures, for example, conjoint utility attributed to brand C: metrics tracing essence of rand may not track health and value P: monitor health of brand. diagnose weaknesses, as needed

question

conjoint utilities

answer

C: regression coefficients for attribute levels derived from conjoint analysis C: may be function of number, level, and type of attributes in study P: indicates the relative values that customers place on attributes of which product offerings are composed

question

segment utilities

answer

C: clustering individuals into market segments on the basis of sum-of-squares distance between regression coefficients drawn from conjoint analysis C: may be function of number, level and type of attributes in conjoint study. assumes homogeneity within segments P: uses customers valuations of product attributes to help define market segments

question

conjoint utilities and volume projection

answer

C: used within conjoint simulator to estimate volume C: assumes awareness and distribution levels are known or can be estimated P: forecast sales for alternative products, designs, prices and branding strategies

question

workload

answer

C: hours required to service clients and prospects C: prospect numbers may be debatable. time spent trying to convert prospects can vary by territory, salesperson and potential client P: to assess the number of sales people required to service a territory and to ensure balanced workloads

question

sales potential forecast

answer

C: this comprises the number of prospects and their buying power C: doesn't assess the likelihood of converting "potential" accounts. definitions of buying power are more an art than a science P: to determine sales targets. can also help identify territories worthy of an allocation of limited sales resources

question

sales total

answer

C: individual sales projections may be based on a salesperson's share of forecasted sales on prior year sales and a share of increased district projections, or on a management designed weighting system C: setting individual targets on the basis of prior year sales can discourage optimal performance, as strong performance in one year leads to more aggressive targets in the next P: to set targets for individual salespeople and for territories

question

sales force effectiveness

answer

C: effectiveness metrics analyze sales in the context of various criteria, including calls, contacts, potential accounts, active accounts, buying power of territory, and expenses C: depends on factors that also affect sales potential and workload P: to assess the performance of a salesperson or team

question

compensation

answer

C: total payments made to a salesperson, typically consisting of a base salary, bonus and/or commission C: perceived relationship between incentive reward and controllable activities may vary widely among industries and firms P: to motivate maximum sales effort. to enable salespeople and management to track progress toward goals

question

break-even number of employees

answer

C: sales revenue, multiplied by margin net of commission, divided by cost per staff member C: margins may vary across products, time and salespeople. sales are not independent of the number of salespeople P: to determine the appropriate personnel level for a projected sales volume

question

sales funnel, sales pipeline

answer

C: portrayal of the number of clients and potential clients at various stages of the sales cycle C: funnel dimensions depend on type of business and definition of potential clients P: to monitor sales effort and project future sales

question

numeric distribution

answer

C: percentage of outlets in a defined universe that stock a particular brand or product C: outlets size or sales levels are not reflected in this measure. boundaries by which distribution universe is defined may be arbitrary P: to assess the degree to which a brand or product has penetrated its potential channels

question

all commodity volume (ACV)

answer

C: numeric distribution weighted by penetrated outlets' share of sales of all product categories C: reflects sales of "all commodities" but may not reflect sales of the relevant product or category P: to assess the degree to which a brand or product has access to retail traffic

question

product category volume (PCV)

answer

C: numeric distribution weighted by penetrated outlets' share of sales of the relevant product category C: strong indicator of share potential, but may miss opportunities to expand category P: to assess the degree to which a brand or product has access to established outlets for its category

question

total distribution

answer

C: usually based on ACV or PCV. sums of the relevant measures for each SKU in a brand or product line C: strong indicator of the distribution of a product line, as opposed to an individual SKU P: to assess the extent to which a product line is available

question

facings

answer

C: generally, an average of the total number of package views available in a typical stocking outlet C: reflects visibility at retail. may reflect inventory as well, depending on whether "backroom" inventory is available P: to determine stock levels and visibility within stores

question

out-of-stock

answer

C: percentage of outlets that "list" or normally stock a product or brand, but have none available for sale C: out-of-stocks can be measure in numeric of ACV or PCV terms P: to monitor the ability of logistics systems to match supply with demand

question

inventories

answer

C: total amount of product or brand available for sale in a channel C: may be held at different levels and valued in ways that may or may not reflect promotional allowances and discounts P: to calculate ability to meet demand and determine channel investments

question

mark-downs

answer

C: percentage discount from the regular selling price C: for many products, a certain percentage of mark-downs are expected. too few mark-downs may reflect "under ordering". if mark-downs are too high the opposite may be true. P: to determine whether channel sales are being made at planned margins

question

direct product profitability (DPP)

answer

C: the adjusted gross margin of products, less direct product costs C: cost allocation is often imprecise. some products may be intended not to generate profit but to drive traffic P: to identify profitable SKUs and realistically calculate their earnings

question

gross margin return on inventory investment (GMROII)

answer

C: margin divided by the average monetary value of inventory held during a specific period of time C: allowances and rebates must be considered in margin calculations. for "loss leaders" this measure may be consistently negative and still not present a problem. for most products, negative trends in GMROII are signs of future problems P: to quantify return on working capital invested in inventory

question

price premium

answer

C: the percentage by which the price of a brand exceeds a benchmark price C: benchmark include average price paid, average price charged, average price displayed and price of a relevant competitor. prices can be compared at any level in the channel and can be calculated on a gross basis or net of discounts and rebates P: measures how a brands price compares to that of its competition

question

reservation price

answer

C: the maximum amount an individual is willing to pay for a product C: reservation prices are difficult to observe P: one way to conceptualize a demand curve as the aggregation of reservation prices of potential customers

question

per cent good value

answer

C: the proportion of customers who consider a product to be a good value - that is, to have a selling price below their reservation price C: easier to observe than individual reservation prices P: a second way to conceptualize a demand curve is as the relationship between per cent good value and price

question

price elasticity of demand

answer

C: the responsiveness of demand to a small change in price, expressed as a ratio of percentages C: for linear demand, linear projections based on elasticity are accurate, but elasticity changes with price. for constant elasticity demand, linear projections are approximate, but elasticity is the same for all prices P: measures the responsiveness of quantity to changes in price. if priced optimally, the margin is the negative inverse of elasticity

question

optimal price

answer

C: for linear demand, optimal price is the average of variable cost and the maximum reservation price. for constant elasticity, optimal price is a known function of variable cost and elasticity. in general, optimal price is the price that maximizes contribution after accounting for how quantity changes with price C: optimal price formulas are appropriate only if the variable cost per unit is constant, and there are no larger strategic considerations P: quickly determines the price that maximizes contribution

question

residual elasticity

answer

C: residual elasticity is "own" elasticity plus the product of competitor reaction elasticity and cross elasticity C: rests on an assumption that competitor reaction to a firm's price changes is predictable P: measures the responsiveness of quantity to changes in price, after accounting for competitor reasons

question

baseline sales

answer

C: intercept in regression of sales as function of marketing variables. baseline sales = total sales, less incremental sales generated by a marketing program or programs C: marketing activities also contribute to baseline P: to determine the extent to which current sales are independent of specific marketing efforts

question

incremental sales, or promotional lift

answer

C: total sales, less baseline sales. regression coefficient to marketing variable cited above. C: need to consider competitive actions P: to determine short-term effects of marketing effort

question

redemption rates

answer

C: coupons redeemed divided by coupons distributed C: will differ significantly by mode of coupon distribution P: rough measure of coupon "lift" after adjusting for sales that would have been made without coupons

question

costs for coupons and rebates

answer

C: coupon face amount plus redemption charges, multiplied by the number of coupons redeemed C: does not consider margins that would have been generated by those willing to buy product without coupon P: allows for budgeting of coupon expense

question

percentage sales with coupon

answer

C: sales via coupon, divided by total sales C: doesn't factor in magnitude of discount offered by specific coupons P: a measure of brand dependance on promotional efforts

question

per cent sales on deal

answer

C: sales with temporary discounts as a percentage of total sales C: does not make distinction for depth of discounts offered P: a measure of brand dependance on promotional efforts

question

per cent time on deal

answer

C: percentage of time during which temporary promotions are offered C: does not reflect whether trade or consumers take advantage of discounts offered P: a measure of brand dependance on promotional efforts

question

average deal depth

answer

C: sales via coupon, divided by total sales C: should be adjusted to account for forward buying and pass-through P: a measure of brand dependance on promotional efforts

question

pass-through

answer

C: promotional discounts provided by the trade to consumers, divided by discounts provided to the trade by the manufacturer C: can reflect power in the channel, or deliberate management or segmentation P: to measure the extent to which a manufacturer's promotions generate promotional activity further along the distribution channel

question

price waterfall

answer

C: actual average price per unit divided by list price per unit. can also be calculated by working backward from list price, taking account of potential discounts, weighted by the frequency with which each is exercised C: some discounts may be offered at an absolute level, no on a per-item basis P: to indicate the price actually paid for a product, and the sequence of channel factors affecting that price

question

impressions

answer

C: an impression is generated each time an advertisement is viewed. the number of impressions achieved is a function of an ad's reach (the number of people seeing it), multiplied by its frequency (number of times they see it) C: as a metric, impressions do not account for quality of viewings. in this regard, a glimpse will have less effect than a detailed study. impressions are also called exposures and opportunities-to-see (OTS) P: to understand how many times an advertisement is viewed

question

gross rating points (GRPs)

answer

C: impressions divided by the number of people in the audience for an advertisement C: impressions expressed in relation to population. GRPs are cumulative across media vehicles, making it possible to achieve GRPs of more than 100%. target rating points (TRPs) are measured in relation to defined target populations P: to measure impressions in relation to the number of people in the audience for an advertising campaign

question

cost per thousand impressions (CPM)

answer

C: cost of advertising divided by impressions generated (in thousands). C: CPM is a measure of cost per advertising impression, reckoning impressions in thousands. this makes it easier to work with the resulting financial figures than would be possible on the basis of cost per single impression P: to measure the cost-effectiveness of the generation of impressions

question

net reach

answer

C: the number of people who receive an advertisement C: equivalent to reach. measure unique viewers of an advertisement. often best mapped on a Venn diagram P: to measure the breadth of an advertisement's spread across a population

question

average frequency

answer

C: the avearage number of times that an individual receives an advertisement, given that he or she is indeed exposed to the ad C: frequency is measured only among people who have in fact seen the advertisement under study P: to measure how strongly an advertisement is concentrated on a given population

question

frequency response functions (linear)

answer

C: all advertising impressions are equally impactful. threshold: a certain number of impressions are needed before an advertising message will sink in C: linear model is often unrealistic, especially for complex products. threshold model is often used, as it is simple and intuitive P: Learning curve model may suggest spurious accuracy in an imprecise process. should be tested for accuracy

question

frequency response functions ( learning curve)

answer

C: an advertisement has little impact at first but gains force with repetition and then tails off as saturation is achieved P: to model the reaction of a population to exposure to an advertisement

question

effective reach

answer

C: reach achieved among individuals who are exposed to an advertisement with a frequency greater than or equal to the effective frequency C: the effective frequency rate constitutes a crucial assumption in the calculation of this metric P: to measure the portion of an audience that is exposed to an advertisement enough times to be influenced

question

effective frequency

answer

C: the number of times an individual must see an advertisement in order to register its message C: as a rule of thumb in planning, marketers often use an effective frequency of 3. to the extent that it promises to have a significant impact on campaign results, this assumption should be tested P: to determine optimal exposure levels for an advertisement or campaign, trading the risk of over-spending agains the risk of failing to achieve the desired impact

question

share of voice

answer

C: quantifies the advertising "presence" of a brand, campaign or firm in relation to total advertising in a market C: market definition is central to meaningful results. impressions or ratings represent a conceptually strong basis for share of voice calculations. often, however, such data are unavailable. consequently, marketers use spending, an input, as a proxy for output P: to evaluate the relative strength of advertising program within its market

question

pageviews

answer

C: the number of times a Web page is served C: represents the number of Web pages served. hits by contrast, represent pageviews multiplied by the number of files on a page, making it as much a metric of page design as of traffic P: to provide a top-level measure of the popularity of a website

question

clickthrough rate

answer

C: the number of clickthroughs as a fraction of the number of impressions C: an interactive measure of Web advertising. has great strengths, but clicks represent only a step toward conversion and are thus an intermediate advertising goal P: to measure the effectiveness of a Web advertisement by counting those customers who are sufficiently intrigued to click through it

question

cost per click

answer

C: advertising cost divided by number of clicks generated C: often used as a billing mechanism P: to measure or establish the cost-effectiveness of advertising

question

cost per order

answer

C: advertising cost, divided by number of orders generated C: more directly related to profit than cost per click, but less effective in measuring pure marketing. an advertisement may generate strong clickthrough but yield weak conversion due to a disappointing product P: to measure or establish the cost-effectiveness of advertising

question

cost per customer acquired

answer

C: advertising cost, divided by number of customers acquired C: useful for purposes of comparison to customer lifetime value. helps marketers determine whether customers are worth the cost of their acquisition P: to measure the cost-effectiveness of advertising

question

visits

answer

C: the number of unique viewings of a website C: by measuring visits relative to pageviews, marketers can determine whether viewers are investigating multiple pages on a website P: to measure audience trafic on a website

question

visitors

answer

C: the number of unique website viewers in a given period C: useful in determining the type of traffic generated by a website - a few loyal adherents, or many occasional visitors. the period over which this metric is measured can be an important consideration P: to measure the reach of a website

question

abandonment rate

answer

C: the rate purchases started but not completed C: can warn of weak design in an e-commerce site by measuring the number of potential customers who lose patience with a transaction process or are surprised and put off by "hidden" costs revealed toward its conclusion P: to measure one element of the close rate of internet business

question

net profit

answer

C: sales revenue less total costs C: revenue and costs can be defined in a number of ways leading to confusion in profit calculations P: the basic profit equation

question

return on sales (ROS)

answer

C: net profit as a percentage of sales revenue C: acceptable level of return varies between industries and business models. many models can be described as high volume/low return or vice versa P: gives the percentage of revenue that is being captured in profits

question

return on investment (ROI)

answer

C: net profits over the investment needed to generate the profits C: often meaningless in the short term. variations such as return on assets and return on investment capital analyze profits in respect of different inputs P: a metric that describes how well assets are being used

question

economic profit

answer

C: net operating profit after tax (NOPAT) less the cost of capital C: requires a cost of capital to be provided/calculated P: shows profit made in finance terms. gives a clearer distinction between the sizes of returns than does a percentage calculation

question

payback

answer

C: the length of time taken to return the initial investment C: will favor projects with quick returns more than long term success P: simple return calculation

question

net present value (NPV)

answer

C: the value of a stream of future cash flows after accounting for the time value of money C: the discount rate used is the vital consideration and should account for the risk of the investment too P: to summarize the value of cash flows over multiple periods

question

internal rate of return (IRR)

answer

C: the discount rate at which the NPV of an investment is zero C: IRR does not describe the magnitude of return. $1 on $10 is the same as $1 million on $10 million P: An IRR will typically be compared to a firm's hurdle rate. If IRR is higher than hurdle rate, invest; if lower, pass

question

return on marketing investment (ROMI) revenue

answer

C: incremental revenue attributable to marketing over the marketing spending C: marketers need to establish an accurate baseline to be able to meaningfully state what revenue is attributable to marketing P: compares the sales generated in revenue terms with the marketing spending that helped generate the sales. the percentage term helps comparison across plans of varying magnitude

Marketing Metrics and Analysis – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards