Lecture Marketing metrics: Chapter 3 - Trần Nhật Minh

Lecture Marketing metrics - Chapter 3: Market and sales forecast presentation of content: Competitiveness metrics, market projection. Invite you to reference.

Chapter 3:

Market & Sales Forecast

Contents

•Competitiveness metrics

•Market projection

Competitiveness

Key metrics

•Market share

◦ Revenue /unit market share

◦ Relative market share

◦ Market concentration

•Penetration

◦ Market penetration

◦ Penetration share

Market share

•Purpose: key indicator of market competiveness

•Market share: The percentage of a market

accounted for by a specific entity

Market share

•𝑼𝒏𝒊𝒕 𝒎𝒂𝒓𝒌𝒆𝒕 𝒔𝒉𝒂𝒓𝒆 % = 𝑇𝑜𝑡𝑎𝑙 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠𝑎𝑙𝑒𝑠 #𝑈𝑛𝑖𝑡 𝑠𝑎𝑙𝑒𝑠 #

𝑆𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 ($)

𝑇𝑜𝑡𝑎𝑙 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 ($)

Market share

•Cautions:

◦ Unit vs revenue

◦ Manufacturer’s warehouse vs sales to consumers.

◦ Before or after promotion

Relative market share

•Purpose: to assess a firm’s or brand success and its

position in the market

𝑏𝑟𝑎𝑛𝑑 ′ 𝑠 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠ℎ𝑎𝑟𝑒 ($,#)

𝑙𝑎𝑟𝑔𝑒𝑠𝑡 𝑐𝑜𝑚𝑝𝑒𝑡𝑖𝑡𝑜𝑟 ′ 𝑠 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠ℎ𝑎𝑟𝑒 ($,#)

Market concentration

•The degree to which a relative small number of

firms accounts for a large proportion of the

market

•Also known as the concentration ratio

•Usually calculated for the largest 3 or 4 firms in the

market

•Purpose: measure of brand or category popularity.

•Helping managers to decide strategy to increase

sales by:

◦ Acquiring existing category users from competitors

◦ Expanding the total population of category users

Penetration

• 𝑴𝒂𝒓𝒌𝒆𝒕 𝒑𝒆𝒏𝒆𝒕𝒓𝒂𝒕𝒊𝒐𝒏 % =

𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑤ℎ𝑜 ℎ𝑎𝑣𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑

𝑎 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑖𝑛 𝑡ℎ𝑒 𝑐𝑎𝑡𝑒𝑔𝑜𝑟𝑦 () 𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 (#)

• 𝑩𝒓𝒂𝒏𝒅 𝒑𝒆𝒏𝒆𝒕𝒓𝒂𝒕𝒊𝒐𝒏 % =

𝐶𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑤ℎ𝑜 ℎ𝑎𝑣𝑒 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑑 𝑡ℎ𝑒 𝑏𝑟𝑎𝑛𝑑 () 𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 (#)

• 𝑷𝒆𝒏𝒆𝒕𝒓𝒂𝒕𝒊𝒐𝒏 𝒔𝒉𝒂𝒓𝒆 % =𝐵𝑟𝑎𝑛𝑑 𝑝𝑒𝑛𝑒𝑡𝑟𝑎𝑡𝑖𝑜𝑛 (%)

𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑒𝑛𝑒𝑡𝑟𝑎𝑡𝑖𝑜𝑛 (%)

Penetration

•Cautions:

◦ Category  time period

•Data sources:

◦ Internal sources:

◦ Sales report

◦ External sources:

◦ Competitor study

Market projection

Key metrics

•Volume projection

•Break-even sales

Volume projection

•Purpose: to ensure that marketing and sales

objectives mesh with profit targets

•Target volume: the volume of sales necessary to

generate the profits specified in a company’s plans.

Volume projection

•𝑻𝒂𝒓𝒈𝒆𝒕 𝒗𝒐𝒍𝒖𝒎𝒆 # =𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡 $ +𝑇𝑎𝑟𝑔𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡𝑠($)𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡($)

•𝑻𝒂𝒓𝒈𝒆𝒕 𝒓𝒆𝒗𝒆𝒏𝒖𝒆 $ = 𝑇𝑎𝑟𝑔𝑒𝑡 𝑣𝑜𝑙𝑢𝑚𝑒 # ∗

𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 $

•𝑻𝒂𝒓𝒈𝒆𝒕 𝒓𝒆𝒗𝒆𝒏𝒖𝒆 $ =𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡 $ +𝑇𝑎𝑟𝑔𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡𝑠($)

𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛(%)

Break-even sales

•Purpose: to provide a rough indicator of the earnings

impact of a marketing activity

•Break-even occurs when the total contribution equals

the fixed costs, profits and losses at this point equal

zero

•Break-even volume: the number of units that must be

sold to cover fixed costs.

•Break-even revenue: the level of sales required to

break even.

Break-even sales

•𝑩𝒓𝒆𝒂𝒌 − 𝒆𝒗𝒆𝒏 𝒗𝒐𝒍𝒖𝒎𝒆 # =𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 $𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠 $

•𝑩𝒓𝒆𝒂𝒌 − 𝒆𝒗𝒆𝒏 𝒓𝒆𝒗𝒆𝒏𝒖𝒆 $ = 𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠 $

𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛 %

•𝑩𝒓𝒆𝒂𝒌 − 𝒆𝒗𝒆𝒏 𝒓𝒆𝒗𝒆𝒏𝒖𝒆 $ = 𝐵𝑟𝑒𝑎𝑘 −

𝑒𝑣𝑒𝑛 𝑣𝑜𝑙𝑢𝑚𝑒 # ∗ 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡($)