Measuring Marketing Effectiveness

This report evaluates the effectiveness of marketing measures adopted by Hondz and provides recommendations for improving market share and profitability.

Running head: MEASURING MARKETING EFFECTIVENESS
Measuring Marketing Effectiveness
Name of the student
Name of the university
Author note

1MEASURING MARKETING EFFECTIVENESS
Table of Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................2
Findings......................................................................................................................................3
Performance analysis of Hondz.............................................................................................3
Discussion............................................................................................................................17
Recommendation......................................................................................................................18
Conclusion................................................................................................................................19
Limitation.................................................................................................................................20
Reflection.................................................................................................................................21
Bibliography: Harvard.............................................................................................................23
Appendices...............................................................................................................................25
Appendix 1 (Profitability, cost and revenue data)...............................................................25
Appendix 2 (Relative market share of Hondz)....................................................................27
Appendix 3 (Hondz Customer satisfaction )........................................................................27
Appendix 4 (Riderz Customer Satisfaction)........................................................................29
Appendix 5 (Ocean Customer Satisfaction).........................................................................32
Appendix 6 (Infographic).....................................................................................................35

2MEASURING MARKETING EFFECTIVENESS
EXECUTIVE SUMMARY
The purpose of the report was to evaluate the effectiveness of the marketing measures
adopted by Hondz which provides powerboat services to their consumers. The data set
provided had been analysed and the results suggested that Hondz lack in marketing strategies.
They have not emphasized on their marketing aspect which is the reason that they had lost
their potion of market leader. The organization had been the market leader with majority of
the share in the market but the analysis show that the organization has lost their market share
and their relative market share had decreased significantly in the past year.
INTRODUCTION
This report has highlighted the ways of measuring the effectiveness of marketing
strategies for Hondz, which provides powerboat charters for travelling to the isle of wright.
The island is one of the most attractive tourist spots which consists of holiday resorts and
business hubs. Powerboat is the fastest option for the consumers but can be used by only four
people can travel at a time. Even though, this market had existed for a long period, the
companies have started using product differentiation as a strategy to add value for the
consumers. The given case study has identified three primary competitors in this market
segment and are named as Hondz, Riderz and Ocean. However, the major focus of this
research is on Hondz where the owner of the company has provided with data sets consisting
of data for the past three years. The datasheet consists of sales data and consumer data which
has been evaluated to provide the business owner with clear idea about the performance of
the company. The study has also thrown light on the possible measures that should be
adopted by the company to increase their sustainable competitive advantage in the market.

3MEASURING MARKETING EFFECTIVENESS
FINDINGS
Performance analysis of Hondz
Total trips in the last three years
Figure 1: Total trips
(Source: As created by author)
The data collected shows that the number of trips were highest in the year of 2016
compared to the other two years. This shows that in the company had been effective in
developing their marketing strategies in the year of 2016 as they have been able to draw more
number of consumers from the target market. However, there is a steady decrease in the
number of trips in the past one year which indicates various possibilities such as increase in
market competition, decrease in effectiveness of the marketing strategies and change in
market trends.

4MEASURING MARKETING EFFECTIVENESS
Total revenue in the past three years
Figure 2: Total revenue
(Source: As created by author)
The above data clearly shows that the revenue generation of the organization has
decreased significantly in the past year. The number of trips were higher in the year of 2016
which has increased the revenue of the organization. This clearly indicate the organization
has not been able to keep up their steady growth in the year of 2016 and there has been steep
decrease in their market growth. This can be identified as a major issue for the organization
as they are losing their grip on the market which would hamper their long term sustainability.

5MEASURING MARKETING EFFECTIVENESS
Marketing cost in the past three years
Figure 3: Total marketing costs
(Source: As created by author)
This line graph clear shows that the marketing cost have decreased steeply in the past
year and this has affected customer retention. This defines the direct relationship among
marketing efforts, revenue and total trips. The company has significantly reduced the
marketing efforts of the company which is reflected on the revenue generation and the
number of trips. Marketing is not effective for Hondz in the current scenario and the company
needs to invest more in their marketing strategies in the upcoming years in order to increase
their share in the market.

6MEASURING MARKETING EFFECTIVENESS
Operational cost in the past three years
Figure 4: Operational cost
(Source: As created by author)
The operational cost of the organization has also decreased in the past year only due
to the fact that the number of consumers and trips have decreased which has decreased the
operational cost of the organization for every consumer. The decrease in the consumer base
in the past year have decreased the overall expenditure of the organization.

7MEASURING MARKETING EFFECTIVENESS
Net profit in the last three years
Figure 4: Net profit
(Source: As created by author)
The graph clearly shows that the net profit in the year of 2016 is £28,150.00 which is
the highest for the company in the past three years. However, there is not much significant
difference in the net profit for the organization as the cost incurred was also high in the year
of 2016 as there is a fixed cost of £550.00 for every consumer. The net profit in the year of
2015 was £24,150.00 and £22,100.00 in the year of 2017. However, the decrease in the net
profit is the organization is a major concern.

8MEASURING MARKETING EFFECTIVENESS
Customer profitability
Figure 5: Customer profitability
(Source: As created by author)
The customer profitability shows that the company has made maximum profit in the
year of 2016. However, the most shocking fact is that the organizations’ customer
profitability in the year of 2015 is higher than in the year of 2017. This means that the
company has made maximum profit from the consumers in the year of 2016. This is the
difference between the cost and revenue generated in order to develop customer relationships.

9MEASURING MARKETING EFFECTIVENESS
Profit in the last three years
Figure 6: profit percentage
(Source: As created by author)
This pie chart represents the percentage profit of the organization in the past
three years. The profitability percentage in the year of 2015 and 2016 have only 1%
difference which shows that the organization was able to increase their net profitability by
1% in 1 year. However, the profitability decreased by 6% in the next year which shows a
drastic negative change and it is key to improve their optimal profit percentage for
sustainability.

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Year on year growth
Figure 7: Year on year growth
(Source: As created by author)
The year on year growth of the organization was 35.37% in the year of 2016 which
shows that year on year growth of the organization was quite high. However, there has been
steep decrease in the year on year growth of the organization from 2016 to 2017 which shows
33.79 % decrease in growth. The organization is almost facing a crisis situation and
comparison of the business volume in the past and the present year shows the steep decrease
in business.

11MEASURING MARKETING EFFECTIVENESS
Hondz Customer type
Figure 8: Customer Type
(Source: As created by author)
This shows that majority of the customers are private consumers where 84consumers
belong to the private group category and only six consumers belong to the business group
category.

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Customer satisfaction level (2016) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Figure 9: Customer Satisfaction in 2016
(Source: As created by author)
The majority of the employees have rated the organization with 5 and 6 which means
that their satisfaction level are on the higher side. On the other hand, 12% of the consumers
were highly satisfied with the services provided by the organization, 2% are dissatisfied and
15% are neutral to this research question. However, there are certain blank data in the survey
which has limited the findings in the research.

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Customer satisfaction level (2017) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Figure 10: Customer Satisfaction in 2017
(Source: As created by author)
The customer satisfaction level in the year of 2017 is high where 24% have rated the
organization 5, 20% have rated the organization 6 and 11% have rated the organization as 7.
On the contrary, 3%, 11% and 15% are not satisfied with the service and 16% are neutral.
However, when compared to customer satisfaction survey in the year of 2016, there has been
6% decrease in the satisfaction level of the consumers.

14MEASURING MARKETING EFFECTIVENESS
Word of mouth
Figure 10: Word of mouth
(Source: As created by author)
The question has aimed to evaluate the advocacy level of the consumers where it was
asked that whether they would recommend it to other consumers or not. The findings show
that 10% of the consumers have rated 10, 9% have rated 9, 21% have rated 8 and 12% have
rated 7. On the contrary, 10% have rated 1, 9% have rated 2, 8% have rated 3, 5% have rated
4 and 7% have rated 5. Moreover, than 50% of the consumers have advocacy level but the
concern for the organization is the fact that there are almost 40% consumers that will not
promote the organization. This may be due to the fact that their service expectations have not
been met by the organization.

15MEASURING MARKETING EFFECTIVENESS
Market share in the past three years
Figure 11: Market share in 2015
(Source: As created by author)
Figure 12: Market share in 2016
(Source: As created by author)

16MEASURING MARKETING EFFECTIVENESS
33%
19%
48%
2017
Hondz
Riderz
Ocean
Figure 13: Market share in 2017
(Source: As created by author)
These three pie charts depicts the market share of the company in the past three years.
In the year of 2015, it can be clearly seen that Hondz has 54% share in the market and Ocean
has 46% of the share. However, the scenario changed significantly in 2016 where Hondz had
53% of market share, Riderz had 10% share in the market and remaining market was
captured by Ocean. This shows that market share has been steady in the 2015 and 2016 but in
the year of 2017, there has been drastic changes. Ocean has become the leader in the market
with 48% share in the market where as Hondz has significantly lose their market share to
Riderz and Ocean. Riderz have increased their market share to 19% and Hondz have only
33% share in the market. This clearly indicate that the company has not been effective in
developing effective marketing strategies that would facilitate in managing their share in the
market.

17MEASURING MARKETING EFFECTIVENESS
Relative market share of Hondz
2015 2016 2017
0
10
20
30
40
50
60
Total
Figure 14: Relative Market share
(Source: As created by author)
This is a downward graph which clearly shows that relative markets share of the
company has decreased steadily. Relative market share compares the market share of the
organization with the market leader. In this study, it can be seen that the organization is
losing their share in the market and their relative share have decreased significantly in the
past year.
Discussion
The analysis of the Hondz data and comparison with the rival companies have shown
that even though the Hondz was the market leader in the year of 2016 but the company have
lost their share in the market due to their lack of marketing effectiveness. The focus on the
marketing efforts have decreased significantly in the past year. The market data of the Ocean
shows that they have been able to increase their market share as they are offering same

18MEASURING MARKETING EFFECTIVENESS
quality services at lower prices. Moreover, their cost of operation is comparatively low and
by referring to the appendix 1, the comparison can be clearly understood through yearly data.
RECOMMENDATION
Currently, Hondz is in a dicey situation and the need to increase the effectiveness of
their marketing strategies for improving the market share and net profit margin. Therefore,
the following strategies are recommended for increasing the effectiveness of the marketing
strategies:
 Customer communication cost has a poor visibility and in order to overcome this the
organization needs to conduct assessment such as sales tool and collateral analysis,
sales time usage study and customer surveys to make the communication more
effective.
 The organization needs to develop a customer engagement model having a common
vocabulary for components in go-to market which will facilitate in providing
message, tactics and content at the same time.
 The company should also decrease their internal cost by improving the overall
operational process. The organization needs to apply innovative business model to
reach economies of scale.
 The market competitors have been using product differentiation as a strategy and the
company itself has been implementing similar strategies. However, the company
needs to add more value to their offerings for improving the overall service quality.
 The company needs to set their priorities based on the needs of the organization. The
company is operating in a niche market and the level of competition have increased so

19MEASURING MARKETING EFFECTIVENESS
it is essential to have more priorities on improving the effectiveness of the marketing
strategies so that market penetration can be increased.
 Customer satisfaction needs to be increased as company has been losing customers as
other companies are providing better service. Hondz needs to add value to their
services and decrease the product cost for gaining cost leadership in the market.
 The organization needs to make use of digital marketing medium as a means of
communicating with the consumers. This will decrease the overall marketing cost but
will provide better penetration into the target market.
 The company will also have to make changes to their business model to increase the
overall efficiency of the business.
CONCLUSION
It can be concluded from the study that Hondz have lost their market share
significantly in the past year to their rival companies, Riderz and Ocean. The organization
has even lost their lost their competitive advantage by losing their position of market leader.
The level of customer satisfaction have decreased significantly in the past year where there
are many consumers that have felt disappointed with the service provided by the company. It
has also been seen that Hondz have decreased their marketing investment which is the main
reason behind the decrease in market share of the organization. Hondz was the market leader
till 2016 which is shown from the market share but Ocean have increased their market share
significantly and has become the market leader due to the effectiveness of their marketing
strategies. The appendix 1 has shown that the marketing cost of Ocean has doubled in the
past year which has helped in increasing their market share. The case is similar for Riderz as
they have also increased their investment in marketing and they have been able to enhance
their profit margin. Therefore, the major issue that the organization facing is low capital
investment and high operational cost. The company needs to decrease their cost of operation

20MEASURING MARKETING EFFECTIVENESS
and increase their capital investment. Moreover, Hondz charges maximum among the three
major competitors in the market whereas other companies are offering similar services at
lesser prices.
LIMITATION
The major limitation of the research is the fact due to the data provided by the
company is small and therefore, it does not represent the overall population effectively.
Moreover, the given data cannot be used for statistical analysis and testing of hypothesis due
to the small size of the population. The internal consistency of the data has not been checked
in the research and consist of various missing data. Therefore, for further clarity on the topic,
the organization needs to conduct a market survey to understand the current needs of the
consumers. The market is highly fluctuating where the data collected does not the current
scenario in the market. Therefore, it is essential to collect data for the current customer
preferences so the organization can be add value to their services and offer value for money
for the organization. Moreover, as the research is only based on secondary data and consists
of a single research design various dimensions of the study could not be addressed. Mixed
research is needed to analyse the effectiveness of the marketing strategies and understanding
the needs of the consumers.

21MEASURING MARKETING EFFECTIVENESS
REFLECTION
This assessment has been a great learning experience for me and I have been able to
gain ample amount of insights on the research case and theories. Initially, I was nervous as
the assessment was quite complex and subtle understanding of the theories is essential for
effectively reaching conclusion in the research. I am quite grateful for getting the opportunity
of learning from this assessment. Initially, while starting the assignment, I had limited
knowledge on the subject and effectiveness of marketing is much more than a mere theory. I
have been able to understand the significance and importance of effective marketing metrics
for developing sustainable competitive advantage. I never knew that marketing effectiveness
has a major weightage in success of organizations. I have been able to understand in depth,
concepts like consumer profitability, relative market growth and year to year growth.
I have increased my skills in excel as I had little knowledge about different functions
used in excel. I have also understood the use of pivot table and the way it can be used to draw
frequency tables and charts. I have always been using manual methods of representing data
but the use of Pivot table has made my work easy. I have gained significant proficiency in
using Excel sheet and different functions. I have also understood the different ways of data
representation and how it can be effectively displayed for better understanding of the
assessor. I have also gained knowledge regarding the use of different inferential statistical
techniques consisting of hypothesis testing, regression analysis and correlation calculation.
However, this techniques could not be used in this study due to the small size of the sample
and inferential statistics would not have provided significant result in the study.
The most difficult part of the research was choosing the data that is most relevant for
the research. The data set consisted of raw data and the systematic data are developed based
on the information available in the case study. The skills that I have learnt can be used in

22MEASURING MARKETING EFFECTIVENESS
future market research studies and other research studies. This knowledge would also help me
in the future professional career if I take up a job of market research analyst. In order to
develop further knowledge in this topic, I would aim to get more knowledge in econometrics
and watch YouTube videos to understand and learn new skills regarding the use of excel in
market analysis studies.

23MEASURING MARKETING EFFECTIVENESS
BIBLIOGRAPHY: HARVARD
Davcik, N.S. and Sharma, P., 2016. Marketing resources, performance, and competitive
advantage: A review and future research directions. Journal of Business Research, 69(12),
pp.5547-5552.
Davis, J.A., 2017. Measuring Marketing: The 100+ Essential Metrics Every Marketer Needs
3rd Edition. Walter de Gruyter GmbH & Co KG.
Davis, J.A., 2017. Measuring Marketing: The 100+ Essential Metrics Every Marketer Needs
3rd Edition. Walter de Gruyter GmbH & Co KG.
Hofacker, C.F., De Ruyter, K., Lurie, N.H., Manchanda, P. and Donaldson, J., 2016.
Gamification and mobile marketing effectiveness. Journal of Interactive Marketing, 34,
pp.25-36.
Kumar, V., 2015. Evolution of marketing as a discipline: What has happened and what to
look out for. Journal of Marketing, 79(1), pp.1-9.
Leung, X.Y., Bai, B. and Stahura, K.A., 2015. The marketing effectiveness of social media in
the hotel industry: A comparison of Facebook and Twitter. Journal of Hospitality & Tourism
Research, 39(2), pp.147-169.
McDONALD, M.A.L.C.O.L.M., 2016. Strategic marketing planning: theory and practice.
In The marketing book (pp. 108-142). Routledge.

24MEASURING MARKETING EFFECTIVENESS
Milichovsky, F. and Simberova, I., 2015. Marketing effectiveness: Metrics for effective
strategic marketing. Engineering Economics, 26(2), pp.211-219.
Tiago, M.T.P.M.B. and Veríssimo, J.M.C., 2014. Digital marketing and social media: Why
bother?. Business Horizons, 57(6), pp.703-708.
Wells, W.D., 2014. Measuring advertising effectiveness. Psychology Press.

25MEASURING MARKETING EFFECTIVENESS
APPENDICES
Appendix 1 (Profitability, cost and revenue data)
Hond
z
Yea
r
Tot
al
trip
s
revenue Marketing cost Cost per customer operational cost Total cost Net Profit customer
profitability
profit (%) Year on
Year
growth
(%)
201
5
212 £
1,59,000.00
£
18,250.00
£
550.00
£
1,16,600.00
£
1,34,850.00
£
24,150.00
£
42,400.00
17.90878
75
0
201
6
287 £
2,15,250.00
£
29,250.00
£
550.00
£
1,57,850.00
£
1,87,100.00
£
28,150.00
£
57,400.00
15.04543
03
35.377358
49
201
7
190 £
1,42,500.00
£
15,900.00
£
550.00
£
1,04,500.00
£
1,20,400.00
£
22,100.00
£
38,000.00
18.35548
17
-
33.797909
4
Table 1: Profitability, cost and revenue data
(Source: As created by author)
Rider
z

26MEASURING MARKETING EFFECTIVENESS
Yea
r
Tot
al
trip
s
revenue Marketing
cost
Cost per
customer
operational
cost
Total cost Net Profit customer
profitability
profit (%) Year on
Year
growth
(%)
201
5
0 0 0 £
175.00
0 0 0 0 0 0
201
6
162 £
40,500.00
£
-
£
175.00
£
28,350.00
£
28,350.00
£
12,150.00
£
12,150.00
42.85714
286
0
201
7
322 £
80,500.00
£
19,000.00
£
175.00
£
56,350.00
£
75,350.00
£
5,150.00
£
24,150.00
6.834771
068
98.7654
321
Table 2: Profitability, cost and revenue data
(Source: As created by author)
Ocea
n
Ye
ar
Tot
al
trip
s
revenue Marketing
cost
Cost per
customer
operational
cost
Total cost Net
Profit
customer
profitability
profit
(%)
Year on
Year
growth
(%)
20
15
247 £
1,35,850.00
£
48,000.00
£
200.00
£
49,400.00
£
97,400.00
£
38,450.00
£
86,450.00
39.4763
86
0
20
16
277 £
1,52,350.00
£
58,500.00
£
200.00
£
55,400.00
£
1,13,900.00
£
38,450.00
£
96,950.00
33.7576
822
12.14574
899
20
17
370 £
2,03,500.00
£
1,07,500.00
£
200.00
£
74,000.00
£
1,81,500.00
£
22,000.00
£
1,29,500.00
12.1212
121
33.57400
722
Table 3: Profitability, cost and revenue data
(Source: As created by author)

27MEASURING MARKETING EFFECTIVENESS
Appendix 2 (Relative market share of Hondz)
Hondz Riderz Ocean
Yea
r
Tot
al
trip
s
revenue Tot
al
trip
s
revenue Tot
al
trip
s
revenue Total
market
revenue
Relative
market
share
(Hondz)
201
5
212 £
1,59,000.00
0 0 247 £
1,35,850.00
£
2,94,850.00
53.92572
494
201
6
287 £
2,15,250.00
162 £
40,500.00
277 £
1,52,350.00
£
4,08,100.00
52.74442
539
201
7
190 £
1,42,500.00
322 £
80,500.00
370 £
2,03,500.00
£
4,26,500.00
33.41148
886
Table 4: Relative market share of Hondz
(Source: As created by author)
Appendix 3 (Hondz Customer satisfaction )
Hondz Customer satisfaction
Business type No of respondents
Private 84
Business 6
Grand Total 90
Table 5: Client type
(Source: As created by author)
Customer satisfaction level (2016) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Satisfaction level No of respondents
3 2
4 13
5 28
6 21
7 11
N/A 15
Grand Total 90
Table 6: Satisfaction level in 2016

28MEASURING MARKETING EFFECTIVENESS
(Source: As created by author)
Customer satisfaction level (2017) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Satisfaction level No of respondents
1 3
2 13
3 10
4 14
5 22
6 18
7 10
Grand Total 90
Table 7: Satisfaction level in 2017
(Source: As created by author)
Advocacy
Advocacy level No of respondents
1 9
2 8
3 7
4 5
5 6
6 8
7 11
8 19
9 8
10 9
Grand Total 90
Table 8: Advocacy level
(Source: As created by author)

29MEASURING MARKETING EFFECTIVENESS
Appendix 4 (Riderz Customer Satisfaction)
Riderz Customer satisfaction
Type of Business No of respondents
Private 5
Business 32
Grand Total 37
Table 9: Client type
(Source: As created by author)
Customer satisfaction level (2016) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Customer Satisfaction level No of respondents
1 1
2 1
3 3
4 10
5 1
6 1
7 4
N/A 16
Grand Total 37
Table 10: Satisfaction level in 2016

30MEASURING MARKETING EFFECTIVENESS
(Source: As created by author)
Customer satisfaction level (2017) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Row Labels Count of no of respondents
4 17
5 10
6 1
7 9
Grand Total 37
Table 11: Satisfaction level in 2017
(Source: As created by author)

31MEASURING MARKETING EFFECTIVENESS
Advocacy level No of respondents
7 11
8 23
9 3
Grand Total 37
Table 12: Advocacy level
(Source: As created by author)

32MEASURING MARKETING EFFECTIVENESS
Appendix 5 (Ocean Customer Satisfaction)
Ocean Customer satisfaction
Row Labels Count of no respondents
Private 4
Business 17
Grand Total 21
Table 13: Client type
(Source: As created by author)
Customer satisfaction level (2016) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Customer Satisfaction level No respondents
4 1
5 2
6 14
7 1
N/A 3
Grand Total 21
Table 14: Satisfaction level in 2016
(Source: As created by author)

33MEASURING MARKETING EFFECTIVENESS
Customer satisfaction level (2016) (on a scale of 1 = Extremely Unsatisfied to 7 =
Extremely Satisfied)
Row Labels Count of no respondents
5 3
6 8
7 10
Grand Total 21
Table 15: Satisfaction level in 2017
(Source: As created by author)

34MEASURING MARKETING EFFECTIVENESS
Advocacy level Count of no respondents
1 6
2 8
3 4
4 2
7 1
Grand Total 21
Table 16: Advocacy level
(Source: As created by author)

35MEASURING MARKETING EFFECTIVENESS
Appendix 6 (Infographic)