|
Manage by numbers
A book by John Davis
Review by China Daily.
In the corporate world, senior managers often assert that "if you want to change something, you start by measuring it." This concept was first applied to manufacturing process control, and now forms the basis of modern quality assurance systems. It was adopted by many other business functions and is today being increasingly adopted to benchmark and improve marketing activities.
But can you really measure something as complex and intangible as marketing? Until recently, it seemed like marketing calculations were mostly done on the back of an envelope. Marketing initiatives were justified with simplistic statements like, "It's a huge market. If we get 10 per cent market share, we'll have annual sales of ten million dollars." Today, the pendulum has swung the other way. Every marketing expert has a different opinion on what to measure, and the calculations are often dauntingly complex.
Enter John Davis, Singapore Management University lecturer and marketing strategy consultant. If you have read his previous books, like Magic Numbers for Consumer Marketing, you will know exactly what to expect. Davis has the enviable knack of cutting through complexity and explaining underlying principles in simple, easily understandable terms.
Of course, there is something daunting about the idea of needing to know 103 metrics. It sounds like a lot of work - but don't despair; it's not as demanding as it sounds. Each metric is described succinctly in about four pages, and follows a set format which covers why the measurement is needed, how it is calculated and why it is relevant to the company's marketing effort.
Davis takes a very broad view of what needs to measured, including the market, customers, marketing plan, product, advertising, branding, sales force, compensation and much more. The key metrics are grouped together under these themes, so you can select a topic of current interest and simply read about its relevant metrics.
Break-even analysis is a good example of his style. Measuring Marketing explains that management needs to know how many units of a product or service have to be sold to offset the development costs. It then shows how to measure three relevant metrics: the number of units to break-even, break-even market share, and break-even for regular versus infrequent customers. Detailed examples are used to illustrate the calculations and show how to interpret the results.
This is a concise and useful reference book for marketers and managers seeking quantitative measures of how well their marketing budgets are being used.
Review by China Daily 10/30/2006 page12
|
