October 3, 2016 / Mark Harding
Student ID: 215203034
In the telecommunications industry the change in technology and the speed that it becomes obsolete is causing investments being made on technology and allied services before a market is created. This means that marketing metrics can only give a guide to potential opportunities and risks. With the merging of technologies new major players are entering the market and services are being offered to differentiate the product supplied.
As a relatively new discipline and science, Marketing possess large opportunities and risks with the maturing of the sector. What makes something a science, is the ability to measure, evaluate, and replicate observations and experiments. In the telecommunication sector products are becoming more a complete entertainment package rather than just telephones which was the mainstay of the sectors up to the 1980’s. One example of the rapid change in the market is that the first apple iphone was released just over nine years ago (29th June 2007) with the latest release iphone 7 on 16th September 2016.
With the rapid growth in the performance of the iphones marketers are relying on the next purchase will be the latest model released, this is indicated by the industry having 2 year contracts, which allows for 2 model upgrades from the previous model being available. Figure1 shows the growth in memory capacity, which is required in the transition from a data and telephone environment to one that is now video rich environment. The local telecommunication carriers have had to provide infrastructure to support these services with multibillion dollar investments, these need to be supported by research on what will be required, when and where, the lead times on these investment are measured in years.
Figure 1: Apple press release
For many years marketers believed they added value to a company’s bottom line for many years this was taken as a given, with little evidence to support or disprove the theory. Matt Palmquist referred in his article “What Can the Cola Wars Teach Us about Brand Loyalty?” refers to the Cola wars throughout the late 1990’s, with both Coca-Cola and Pepsi spending significant money on campaigns to differentiate their brands with little positive impact on market share or profitability. In fact, according to (Koschmann & Sheth) is that mature brands like Coca-Cola and Pepsi are better off trying to find new segments and new consumer groups through product innovation rather than trying to poach loyal customers from other mature brands.
In the Telecommunication this has been highlighted by AT&T purchasing DirecTV on the 24 July 2015 in the USA on the deal was aimed at increasing AT&T’s market share in the pay-TV sector; the purchase was reported by AT&T at US$48.5 Billion. This provides a differentiation to the opposition in the segment. New players in the segment include Google and Time Warner Cable each with differing product strengths and geographical reach.
Previously as demonstrated in the Cola Wars example, companies believed that all marketing was beneficial regardless of the type of marketing being applied, irrespective of the product, competition or environment. With a push for marketers to demonstrate accountability for their decisions (Mintz & Currim, 2013), marketers started to use metrics to measure and assess the effectiveness of marketing campaigns.
Big Data has become one of the tools of marketing metrics, Telecommunications can use information to track internet traffic to gather vast amounts of data for their own use or (once cleansed of identifying information) saleable to third parties. This data can be used to show return on investments in near real time management or for demonstrating return on marketing investment. The key to getting the right results relies on asking the right questions.
What are the Metrics?
In an industry like telecommunications large investments, require a large amount of data to be managed and interpreted in a timely manner. AT&T had the rights to the original iphone this allowed AT&T to build a large customer base of smartphone users. This allowed AT&T to have a large amount of Big Data to do analysis on all facets of business and marketing forecasting. This allows a company’s planning on expenditure and marketing to be allowed and assessed.
A broad range of business and Marketing Metrics are used by companies to assess the performance of a marketing-mix decision according to Mintz & Currim.
Dashboards are also becoming a popular way for large amounts of data to be presented and track the performance of key metrics that a company has prioritised (Iacobucci, 2014 , pp. 218). Dashboard use has grown enormously and allow companies to track traffic use including longitudinal information to see changes over time for all aspects of business metrics including marketing.
Figure 2: Example Dash Board
Do Metrics work?
Marketers have adopted the use of marketing metrics with the premise that they should be able to be accountable, both in terms of business metrics but also in the harder to define metric – improvement in Brand Equity (Ambler & Roberts (2008, p. 734). Unfortunately many other academic works including theirs indicate that for marketers, there is no one size fits all metric for marketing and even for the same information the question can change as the environment changes.
For the metrics the product and the environment are paramount, a prime example of this is Blackberry who went from the dominant player in the mobile phone market to a bit player as the product and marketing could not keep up with the opposition.
Figure 3: Bloomberg
This is not to say that Marketing Metrics don’t work, it is simply that the metrics must match what is required to make the right strategic decision, that delivers alignment and insight of the effectiveness of marketing activities, and how it interacts with the business as a whole simply and that one obvious metric is suitable for all companies or even one campaign as the environment the data can be reviewed to provide insight into longitudinal studies as well as current insights to allow for appropriate marketing strategies.
Apple Inc. (2004-2016). Press Release Library. Retrieved September 29, 2016.
http://assets.bwbx.io/images/users/iqjWHBFdfxIU/ivivda7R0N48/v1/-1x-1.jpg Retrieved September 29, 2016.
Iacobucci, D., 2014 . Marketing Management (MM4). Mason: South-Western, Cengage Learning.
Koschmann, A. & Sheth, J. N., n.d. Do Brands Compete or Coexist? Evidence from the Cola Wars. Kilts Booth Marketing series, 2(051), p. 22.
Mintz, O. & Currim, I. S., 2013. What Drives Managerial Use of Marketing and Financial Metrics and Does Metric Use Affect Performance of Marketing-Mix Activities?. Journal of Marketing, 77(March), pp. 17-40.
strategy+business: Corporate Strategies and News Articles on Global Business, M. C. a. M., 2016. What Can the Cola Wars Teach Us about Brand Loyalty?. [Online] A http://www.strategy-business.com/blog/What-Can-the-Cola-Wars-Teach-Us-about-Brand-Loyalty?gko=e8aae Retrieved September 29, 2016