Marketing Math CDI Formula and Calculator Header - Marketing Binder

Category Development Index – CDI – Formula

Click here for a dictionary explanation of CDI.

CDI= percentage of product category total sales in a market /  total population of market region x 100

Note: total number of market region is the overall region, such as the U.S. or a specific state, or country.



 

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Target Costing Formula

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Market Share Formula and Calculator

Market share refers to the percentage of either units (goods/services) or revenue of a market that a company or product controls.

The purpose for a marketing manager to calculate and know their organizations or products market share is that market share is an indicator on how well or poorly a company or product is doing against competitor companies or products of the same category in the same market. It basically allows the marketing manager to determine both the market growth or decline of their company or products in a specific market.

Understanding market share also allows the marketing professional to exam trends with customers as they make selections with the competition. Market share can also be used as an early indicator of whether a product or service is doing well within a market or if there are signs of trouble with the product or service.

Market Share – Formulas

Below are two marketing math formulas for calculating market share; one formula calculates the unit market share which are product units sold by a company in a specific market as compared to similar competitor products in the same market.

The other market share formula is revenue market share. This marketing math formula calculates the price at which the product or service is sold.

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Unit Market Share

Use the form below to calculate market share for product units sold in a specific market against similar products in the same market.

Revenue Market Share

Use the form below to calculate revenue market share for the price of products or services against similar products or services in the same market.


 

Marketing Math BDI Formula and Calculator Header - Marketing Binder

Brand Development Indicator Calculator

Click here for a dictionary explanation of BDI.

BDI= percentage of brand to total sales in a region /  total population of market region x 100

Note: total number of market region is the overall region, such as the U.S. or a specific state, or country.

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Welcome to Marketing Tips Daily

Welcome to the Marketing Tips Daily blog, a new section here on Marketing Binder, where I, Allen Stafford – a marketing professional with 17 years of marketing experience – will bring to you, the small to mid-sized business (SMB) daily marketing tips on a variety of marketing subjects that include:

Read more

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Six Ways Retailers Can Cut Through Holiday Marketing Noise and Ad Clutter

With Black Friday and Cyber Monday kicking off the “official” holiday shopping season this week, retailers and brands scramble to get their marketing messages broadcast across a variety of channels. Their hopes, to cut through the copious amounts of #holidaymarketing noise and clutter and be noticed by consumers.

There’s a reason retailers like Kmart and Walmart begin there holiday marketing in September. These mega retailers want their messages heard, ahead of the rest of the holiday marketing noise and ad clutter that will soon overwhelm consumers. While the exact number of messages consumers are exposed to is unknown, Adage.com puts it in the neighborhood of 250 to 5,000 daily messages. And that number is increasing as advertisers and marketers push out messages through every electronic orifice they can find. Unfortunately, Madison Avenues answer to the overwhelming amount of marketing messages is to add more noise and clutter through unique advertising channels.

Major retailers like Kmart, Best Buy, and Amazon.com have the marketing budgets to cut through the clutter and get a larger piece of the holiday spending pie. This leaves small, local, business who don’t have deep packets, scrambling to catch the crumbs. While holiday marketing, in itself, may not be enough for these local operations to cut through the large retailers clutter busting marketing budgets, there are some initiatives that can help them get a bigger piece of the holiday spending pie.

Some of the following ideas may take some time to get up to speed; others can be deployed fairly quickly, giving hope for those retailers who have been on Santa’s nice list to avoid receiving coal in their holiday profit stockings:

Six Holiday Marketing Noise and Ad Clutter Cutters

Be Authentic
Being authentic in today’s consumer driven digital market is paramount to your success. Representing yourself and your product/service in a genuine manner is good for business, and your bottom line. According to a 2014 study by Cohn & Wolfe on Authenticity, communicating honesty about a brands product or service outweighs the firm’s brand appeal, product utility, and popularity. Additionally, the study revealed that 63% of global consumers would buy from a brand they perceived as authentic.

Differentiate Yourself

Chances are that at some point you’ve heard the best way to stand out of the crowed, and avoid clutter, is to be different or differentiate yourself for other brands. This is a sure way to cut through clutter and stand out from the competition.

Take Whole Foods, the grocery store, for example. They go beyond just being a grocery store. Whole Foods is also a content generator and thought leader in the industry.

They understand their customers and share ideas and content that is not boastful. They also focus on local stores, taking away that big chain feeling, making each store feel inviting and customers welcomed.

Create Value

There’s nothing more mismatched about a brand, product, or offering that doesn’t offer it’s customers value. First, you need to know what your customers want, and offer them exactly that.

One of my marketing clients owns and operates a Chinese Restaurant; she literally mingles with guests and talks to them about the food they ordered; about what they like and dislike. She goes so far as to observe and check the trash bin for their discarded food items. From this qualitative data, my client is able to learn what her customers value and what they don’t.

Changing her menu based on her discovery helped her create new food product offerings and generate more share of wallet per customer.

Sell value first, features second. If you don’t know what your customers value, you won’t know what to feature.

Be Unpredictable

When Starbucks announced, this holiday season, it was forgoing the traditional Christmas themed cups and opting for a more, generic, red cup, it seemed to outrage some people initially. This sparked a frenzy on social media and even a lead an American evangelist and internet personality to post a video to Facebook in outrage over the red cups.

The “negative” publicity and unpredictable act brought more attention to Starbucks. There was actually a backlash against the backlash! And I don’t think the free publicity hurt the behemoth coffee retailer; they reported a 9% increase in U.S. sales and 18% gain in revenue for the 4th quarter this year. Not too shabby!

Use Remarketing Campaigns

A quick and easy way to cut through digital clutter and noise is to deploy a remarketing campaign. Remarketing is a way to get your ad in front of individuals who have visited your site, but did not make a purchase. In turn, when web surfer’s type in key words or visit other sites after visiting yours, they are presented with purpose driven display advertising about your product or service, reminding them about your business and all your offerings.

Remarketing is a good way to create meaningful digital advertising that is relevant to the potential customers needs versus irrelevant banner ads or link ads that provide no purpose at all. Plus, it’s quick and easy to deploy.

Direct Mail is not dead!

According to the CMO Council, 51% of consumers prefer receiving their marketing material from local shops via direct mail. According to a business.com article, direct mail has the highest rate of attracting new customers; 34%.

While marketers have shifted their attention toward more digital delivery channels, like email marketing and app. based marketing, direct mail is still the more personal approach, giving consumers a tangible piece to hold in their hands and feel.

Providing value to direct mail can increase its stickiness, or desire to be kept longer by the consumer. Direct mail is also cost effective and can be quickly deployed, in time for your holiday marketing.

 

By no means are the above ideas an exhaustive list of “what to do’s” to cut through the holiday marketing noise. However, they serve more as a primer to get your creative juices flowing. While this holiday season is upon us and you will need to act fast to deploy most of these ideas, it’s not a bad idea to start planning for next year, now.

If you have any additional thoughts on how to cut through this holidays marketing noise, please do share them in the comment section. I would like to learn more about your ideas and thoughts.

 

 

Marketing Math Cost-Plus Pricing Formula and Calculator Header - Marketing Binder

Cost-plus Pricing Formula (markup pricing)

Cost-plus pricing (or markup pricing) is a cost-based method that simply adds a standard markup to the cost of a product or service.

Under the cost-plus pricing approach, a company needs to establish the total units to be sold. Note: an estimation of units can be used if the actual unit total is not available. Variable costs will remain a constant regardless of output, but the average unit fixed costs may decrease as output increases.

As an example, let’s assume a cell phone case manufacture will be producing cell phone cases. Suppose they have fixed costs of $5 million, variable costs of $2 per unit, and expects to sale 500,000 units of one particular cell phone case model. The cost-plus pricing formula will look like this:

Cost-plus Pricing – Formula

cost-plus-pricing-formula

After the calculation, you can see that the cost per unit (cost per cell phone case) is $12 per unit.


Cost-plus Pricing – Calculator

Use the cost-plus pricing calculator below to conduct your own marketing calculations.


 

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Marketing Definition and the Marketing Process

Marketing Process and definition of marketing: marketing is a business discipline that creates value for customers and the company. See marketing process…

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Writing Marketing Communication Objectives

A tutorial for understanding and writing marketing communications objectives, with examples.

 

What Are Marketing Communication Objectives?

Found in both the marcomm plan and creative strategy statements, marketing communication objectives are determined by problems the target or product category may encounter and any market opportunities the product has to solve to overcome these problems.

Your marketing communication objective should describe what you want your target audience to think, feel, and do after they are exposed to your marketing message. It should answer the fundamental question, “What’s in it for me?”.

Too often, marketing messages fail to deliver the benefits the target audience will get if the target uses the companies product or service. People make purchases based on what they will receive out of the purchase or service. This is why it’s important to include the benefit the target receives in your marketing message.

Every marketing communication strategy, regardless of delivery method; print, broadcast media, e-mail, online, or any other method, has three major objectives:

  • To Create a brand awareness or, in other words, to inform your target audience about your brand.
  • To define a fulfilling need for your product or service, or to persuade them to use your product or service.
  • Encourage action from your target audience, or, in other words, to remind them through various marketing channels about your product or services.

A great way to remember all three objectives is, Inform, Persuade, and Remind.

  1. Inform your target audience about your brand
  2. Persuade your target audience to purchase your product or use your service
  3. Remind your target audience about your brand and encourage them to make the purchase

Explanation of Communication Objectives

Below is a break down of each communication objective and an explanation of why each objective is important. Additionally, I have added some marketing communications objectives examples to help drive the concept into memory

1. Create Brand Awareness (Inform)

Creating brand awareness is to inform your target audience about your brand of your product or service. Creating brand awareness does not necessarily apply to a new brand, but often applies to an existing brand which might be trying to penetrate new markets. The brand message can be delivered via several types of communication channels, such as direct mail, radio, television advertising, environmental advertising (billboards, bus stop signage, and vehicle wraps), or online video and social media. Your delivery method is contingent upon your budget, target region, and product or service, just to name a few communication channels.

Examples of Marketing Communications Objectives

Let’s look at an example for creating brand awareness of a fictions company I made up. I’ll name the company Western Financial Credit Union (WFCU for short). WFCU has two other branch locations in different cities within the state. They are opening a new branch in a smaller town, I’ll call Watsonville, about 45 miles from their two other locations. While few people in Watsonville may have heard of WFCU, the majority have not heard of the credit union, so the marketing department has some work to do in order to inform the new community about WFCU’s brand of financial services products. The marketing department needs to write a few measurable marketing communications objectives as part of their marketing communications plan; something like the following:

  • To successfully penetrate the Watsonville banking market by generating awareness and brand building preference by 30%
  • To stimulate new member accounts by 25% and new financial loans by 15% by offering incentives that offer brand switching
  • To gain a 7% share of the Watsonville home and auto loan lending business by the end of one year.
  • To establish WFCU as the new and preferred financial institution by 8% of eligible Watsonville residents
  • To introduce our HELOC (Home Equity Line of Credit) loans to qualified Watsonville homeowner residents by 10% using loan bundling packages for first time lenders.

The above examples are just a few marketing communications objectives that can be included in your Marcomm plan. There’s a lot more research that goes into the numbers and percentages for increasing brand awareness. For example, knowing the population of Watsonville, the percent of qualified residents who can open an account, and the percent of residents who are banking within the city with other financial institutions. However, you should already researched this information prior to writing the marketing communication objectives.

2. Define a Fulfilling Need for Your Product/Service (Persuade)

Staying in step with our previous example, let’s discuss how WFCU plans on defining a need for their financial products; how they plan on persuading Watsonville residents to switch from their current bank to the new credit union.

In the marketing communications strategy part of your Marcomm plan, you will outline the creative strategy for positioning your company, product, or service in the target audiences mind in order to convince them to use your product/service. In the case of WFCU, they may approach the residents as the “new kid” in the neighborhood who cares about their community. Being new, they would need to really be creative on how they tie their newness into caring for a community they hardly know. They may do this by painting a dismal picture of the current banks in the city. WFCU may highlight not only their friendly service, but showcase their line of financial products at lower than normal interest rates, at least lower than the current competition, and easy loan qualification for new members.

There are several methods marketers use to persuade and define a fulfilling need for their products. A few are listed below:

  • Provide a money-back guarantee
  • Competitive pricing
  • Low interest rates
  • Easy qualifying
  • Easy return policy
  • How the product or service will make life easier for the purchaser
  • Bundling services and products at a savings when the competition is not doing it
  • A buy one get one free
  • Show how the product or service will save the purchaser time

3. Encourage Action from Your Target Audience (Remind)

While encouraging your target audience may seem similar to persuading them to make a purchase, it goes further. It’s certainly true that using a buy one, get one FREE offer is encouragement, however, if you only advertise using one communication channel and only for a brief period, for example a one week period, you will see a drop in consumer interest and purchases. Remember, out of sight, out of mind. If the target audience does not know you exist or is not reminded often about your product, then chances are they will not remember to use your services.

Conclusion

The marketing communications plan consists of three important key objectives, create brand awareness (inform), define a fulfilling need for your product or service (persuade), and encourage action from your target audience (remind). While these three key objectives are important in defining your marketing communication goals, there’s a lot more that goes in to the Marcomm plan. More in depth research has to be conducted on your target audience prior to developing any marketing communications plan and message delivery. While the cost of informing your target audience about your product or services can be high, there are more affordable solutions, like social media and web based marketing that can help reach your target group.

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Writing SMART Marketing Goals

Marketing Goals and the S.M.A.R.T. Acronym

Developing sound marketing goals (or objectives) is critical to managing the performance of your marketing initiatives. Without marketing goals or objectives, you’re much like a ship in the sea trying to navigate without a map. It’s pointless!

Ideally, marketing objectives should be clearly defined using what’s known as the S.M.A.R.T. goals (or objectives) method. S.M.A.R.T marketing goals (objectives) are:

  • Specific
  • Measurable
  • Achievable
  • Results-focused
  • Time-bound

The more precise and detailed you are in your marketing goals, the better you can manage and measure your marketing initiatives.

Example Marketing Goals (Objectives)

Before discussing how to write S.M.A.R.T. marketing goals, take note of some marketing objective examples (below). These marketing goals are similar to what you may find in a typical marketing plan:

  • to increase sales of (specific) product/brand X by 15% over the next 18 months
  • to increase market share for product/brand X by 7 percent (in a specific region) over the next 12 months
  • to generate 200 new leads via the website each month
  • to increase distribution of product X (in a specific region/territory) from 15% to 30% within 12 months

Notice that the above marketing objectives already follow the S.M.A.R.T. goals format; they are specific, measurable, achievable, results-focused, and time-bound.

SIDE BAR: Typical Marketing Objectives

Take note that typical marketing objectives may refer to the following types of sales and marketing initiatives (this is just a small list):

  • sales
  • market share
  • distribution penetration
  • new product launches
  • lead generation
  • social media followers


Writing S.M.A.R.T. Marketing Goals (Objectives)

Let’s examine each letter in the acronym S.M.A.R.T. more closely, providing its definition, an example, and the explanation of the example.

Specific:

A marketing goal should clearly define what you are going to do. The Specific in the S.M.A.R.T. model answers the What, Why, and How of the goal.

Example:

The automotive parts division will increase sales of car batteries by 10% over the next 12 months using cross selling, up-selling, and direct marketing strategies, so that it can increase revenue to hire a new counter sales person.

Explanation: 

  1. What = Automotive parts division will increase sales of car batteries by 10%.
  2. How = By using cross selling, up-selling, and direct marketing strategies.
  3. Why = To increase revenue to hire a new employee; a counter sales person.

Measurable:

There should be tangible evidence that you have accomplished your marketing goal or objective. Typically, the entire goal statement is a measurement for the project, however, there are smaller measurements built into your objective.

Example:

The automotive parts division will increase sales of car batteries by 10% over the next 12 months using cross selling, up-selling, and direct marketing strategies, so that it can increase revenue to hire a new counter sales person.

Explanation: 

The measurable metric is whether the parts department increased sales by 10% within the 12 month period.

Achievable:

Marketing goals should be achievable. The goal should challenge you, yet it should be defined well enough so that it can be achieved. For the goal to be achievable, you must have the proper resources, such as skills, personnel, and finances.

Almost all realistic goals can be achieved when you plan your steps wisely and establish a timeline. By following steps, you can achieve marketing goals that seemed impossible. On the other hand, if you establish impossible goals, you may never reach them.

Example:

The automotive parts division will increase sales of car batteries by 10% over the next 12 months using cross selling, up-selling, and direct marketing strategies, so that it can increase revenue to hire a new counter sales person.

Explanation: 

For you to achieve this marketing objective, you must have a skill-set in selling techniques as well as direct marketing initatives. Without these skills, you will not be able to successfully achieve these goals.

Results-focused:

Marketing goals should measure outcomes, not activities.

Example:

The automotive parts division will increase sales of car batteries by 10% over the next 12 months using cross selling, up-selling, and direct marketing strategies, so that it can increase revenue to hire a new counter sales person.

Explanation: 

The result of this marketing goal is the ability to hire a new counter sales person and an increase in revenue over the past years performance.

Time-bound:

The marketing goal should be linked to a timeframe that creates a practical sense of urgency.

Example:

The automotive parts division will increase sales of car batteries by 10% over the next 12 months using cross selling, up-selling, and direct marketing strategies, so that it can increase revenue to hire a new counter sales person.

Explanation: 

The next 12  months provides a time-bound deadline. The marketing goal can still be more specific by offering a very specific end date.

Writing goals for marketing objectives is no doubt important to the success of your business or products/services. Using the S.M.AR.T. goal methodology can help ensure that goals are achievable in a timely manner, creating success for your organization.

Comments and suggestions are always welcome. If you would like to share your S.M.A.R.T. marketing goals, insights about this topic, or questions, please do so in the comment section below.