Marketing Metrics and Marketing Profitability - Profit impact of marketing strategies

6 important questions on Marketing Metrics and Marketing Profitability - Profit impact of marketing strategies

What are the five different strategies a company can use to affect its profits?

  1. Market growth strategy
  2. Market share strategy
  3. Customer revenue strategy
  4. Cost reduction strategy
  5. Marketing efficiency strategy

What is a NMC market growth strategy?

Attracting more customers & growing market demand in order to grow net profits of a business. Some businesses will take lower NMC in the short run to build demand and future NMC.

What is a NMC customer revenue strategy?

A strategy where a company finds products/services to better serve customer' needs and grow revenue. Additional advertising dollars (increase in average cost per customer) will be necessary to make existing customers aware.
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When would a company choose a NMC customer revenue strategy?

When a company is in a mature market with a strong share position, it may be unprofitable to grow market demand or market share.

What is a NMC cost reduction strategy? Give an example. Where do you have to pay attention to?

A strategy where variable cost per unit will be lowered: for example a new distribution strategy that would lower transportation costs. Pay attention to the effects it has on customer satisfaction.

What is NMC marketing efficiency strategy?

A strategy that lowers fixed marketing expenses: for example distribution costs and selling costs.

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