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CASE ANALYSIS Marketing effectiveness is the quality with which managers go on the market to optimize their spending in order

to achieve good results in short-term and long-term period. According to Mavondo (2004) it is the ability of the organization to meet short-term goals that might positively impact financial performance such as increasing market share, increasing sales, improving gross margin, successful new product introduction. For measurement of marketing there are important metrics. Metric is defined as the ability to evaluate economic performance using a comprehensive set of indicators (financial or non-financial). And it is good to know that for the measurement of overall performance should be to use two types of indicators- financial and non-financial. According to Covin Hall, Smalt (1998) the effectiveness of marketing campaign can be quantified using Non-financial metrics like customer service, market performance, innovation, goal achievement, customer retention and employee involvement.
According to Llonch, Eusebio, Ambler, (2002) the Marketing metrics could be divided into six basic groups .Viz., Financial indicators (turnover, profit margins, profitability ratios), Measurement of market (market share, the share of advertising, promotional share) , Measurement of customer behavior (loyalty, penetration, number of newly acquired customers) , Measuring the movement of customers (customer satisfaction, ability to recognize the brand) Measurement of direct customers (distribution level, profitability of provider, quality of service), Measuring innovation (number of new products, the share of new product sales).

NON-FINANCIAL METRICS: CUSTOMER SERVICE: The Du-pont race is a well organized event in terms of providing the rich experience and excitement among the customers. It offers excellent hospitality to their customer in terms of hospitality tents and luxury suites. Multiple tents are provided to customers before the event through contractual arrangement with management of the tent. More than 20,000 customers and guests in a year were hosted through hospitality tent.

Number of activities for customers were provided in the tent like games, contests, meals, music. Duponts employees were present as hosts for customers. Only 35% of the tickets were paid for by Du-pont and other 65% by customers. To enhance customer expectation, the customer were allowed to interact with Gordan. Accommodation was provided in the form of luxury suits to higher value customers. Spectacular view of race tract, radio scanners, better angle view through TVs. The company may conduct a survey on customer satisfaction and find the level of satisfaction by the ratio : Number of satisfied customers / Total number of Customers. The information about race event was provided to customers through a convenient media internet. As 79% of NASCAR audience used Internet for information about races. The company may conduct a survey on effectiveness of internet as a source of information for NASCAR event by considering the ratio of number of customers who uses Internet as a source of information for NASCAR event / Total number of Internet users.

MARKET PERFORMANCE: The market performance of Du-pont NASCAR event can be measured by growth in number of customers witnessing the event. Number of female NASCAR fans increased by 17% during 2004-06. Average attendance at NASCAR event is Rs. 1,35,000. Number one sport is fan brand loyalty. 150 countries broad case the NASCAR event in 23 languages. The growth in sales can also be measured by calculating the average growth rate in the last 5 years. The people in the age group of 25-34 constitute majority of US population and also NASCAR fans. This indicate the possibility of growth in sales for NASCAR event. NASCAR event has a mass reach as US population in the low income group are NASCAR fans. INNOVATION: Duponts Innovation in branding: Du-pont NASCAR has enhanced its visibility and credible promotion through Brand Ambassador, Jeff Gordan. Through integrated marketing campaign involving Print Ad., TV

Commercial with Jeff Gordan, the Du-pont No.24, Car TV Panel, Gordans driver uniform etc., the company is striving to increase its market share and sales revenue. The impact of innovation can be quantified by increasing the sales of other products of Du-pont through NASCAR event.

EMPLOYEE INVOLVEMENT: Besides the customers, the company also involves their employees in their marketing effort by organizing bus trips to car races and by offering tickets to its employees for car races and having Jess Gordan as their icon their employees fit motivated.

CUSTOMER RETENTION: Retaining a customer Sine-qua-non on any company interested in growth. In the case of Du-pont which has invested in promotion, the purchases before promotion and repeat purchase of the customers are to be tracked through surveys. The percentage of customers who stops using the product after a period of time is known as Churn rate percentage. If this percentage is reduced, it leads to customer retention. Whether the marketing promotion initiative has reduced this Churn rate is to be measured and this metres gives the percentage of customers retention.

GOAL ACHIEVEMENT: Earlier results have that promotion has increase the sale significantly. Du-pont tyvek sales increased significant in 2004 resulting CUSTOMER LIFE TIME VALUE: Due to consecutive victory of Jess Gordan general public has a positive brand association of Du-ponts. in growth of 186% through a promotional initiative.

The CEP of Aeropres, Ken Odom, leading propellant manufacturers / distribution company is loyal to Du-pont and its products because of the NASCAR Jeff Gordan connection. Hence, the company may calculate the customer life time value based on Life Time Customer Value / Total costs incurred.

FINANCIAL METRICS: ROMI: The company is making huge investments in TV commercials and cross advertising for its products. Hence, it can calculate the effectiveness of marketing campaign using Return on Marketing Investment formula which is as follows: ROMI = Incremental profits ________________________ Marketing Investment for the event. This can be calculated for different events and compared to reap the higher benefits. ACTIVITY BASED COSTING: It may be used for the cost incurred for marketing activities, a major overhead cost. The cost drivers such as activities involved in advertising and promotion may be identified and costs are allocated. The effectiveness of each activity has to be determined by comparing costs incurred and benefits generated out of it.

B& K DISTRIBUTORS: In this case B & K distributors can calculate Return on Investment for web portal project as given below.

Incremental Cash flows from the project for five years is as follows. Year Cash Flows 0 (240) 1 (24) 2 100 3 215 4 311 5 398

Return on Investment / Internal rate of return is the rate at which the total present value of Cash inflows is equal to total present value of Cash outflows. 240 + 24/(1+R)1=100 / (1+R)2+215 / (1+R)3+311 / (1+R)4+398 / (1+R)5
R = 44.05 % The net present value for the above project at a cost of capital of 12 % will be

NPV= -240 24 / (1.12)1+100 / 1.122+215 / 1.123+311 / (1.24)4+398 / (1.25)5 = 395 The Internal rate of return (IRR) of 44.05% is greater than the cost of capital of 12 % for the project . The Net Present Value of the project is also positive at 395. Hence the project is financially feasible from the point of View of both Internal rate of return IRR and the Net Present Value (NPV). The sensitivity analysis performed on IRR reflects the following facts. Market Penetration ( 50 % Unchange ): negative Order Size Growth ( 3% ):15.62 % Tier Migration (25 %,55 %,20%): 22.94 % Processing Cross per Order (same as base):31.93 %

Non financial metrics:

In addition to the above financial analysis the project demands the consideration of the following qualitative factors. Value creation for the company is to be considered. Cost Benefit Analysis can be calculated and benefits should outweigh the cost.

The software considered for adoption should have the flexibility for changing according to the dynamic business environment .The software should be capable of accommodating changes in strategies as and when it is needed.

Though the case study says that after introducing the software the web orders will grow to 20 % in the projected 5 year Period. As this is very Cost effective compared to other channels of ordering. How far this projection is realistic is to be carefully analyzed. If need be , risk assessment can be undertaken.

The case study proposes to convert B Tier customers in to A tier customers and C tier customers in to B tier Customers. How far the software can facilitate this needs to be carefully studied.

Introduction of IT of this magnitude will result in change in Organizational Climate ,Organizational culture and consequently Organizational structure as well. The preparedness of the Organization for such changes is to be carefully considered.

The current customers readiness and willingness to adopt the proposed technological environment is to be studied.

The customer order frequency can be increased through initiative of e-business as it reduces the time as well as cost. When business transaction takes place over internet the reach effectiveness can be easily measured.

By introducing the new ordering channel, the order size will be increased consequently resulting in additional revenue management.

The web Portal may provide a strategic advantage to the company which is a soft side of the benefits not at all taken in to account by Return on Investment (ROI).

The Obsolesce period of the embraced technology is to be considered besides that the top management of the company has to take a call on the sufficiency of a positive ROI only after 3 Years.

CONCLUSION: DuPont is investing in strategic marketing planning and promotion to take advantage of its brand image and brand loyalty to increase revenue and returns where as the other B and K Distributors is investing in Technology to reap the same benefits.

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