What is Analytical Marketing?

Marketing research is one of the most important directions in the construction and development of any brand. The success of both the largest companies and relatively small businesses depends on a correct understanding of the needs and moods of the consumer, the capacity and the saturation of the market, the assessment of risks and the potential benefits from these or those actions.

Definition: Analytical marketing

Marketing and analytics are those analytical tools that help to measure the effectiveness of a marketing strategy in a financial aspect. Any advertising campaign and marketing initiatives require investments of money. How to understand whether the budget was distributed correctly? Which channels were the most effective? How much was spent and how much profit was obtained? Analytical marketing provides answers to all these questions.

Why is Analytical Marketing Important?

Modern marketing analytics is necessary for any business to obtain timely, complete, reliable, timely or operative information. One of the main benefits of analytical marketing is the fact that it is necessary for making competent managerial decisions.

The purpose of all analytical marketing strategies is to evaluate the effectiveness of marketing programs in terms of return on investment in the business.

The result of this is:

  • Collection of data on all channels of communications and units in the company;
  • Data processing, analysis;
  • Comparison with competitors;
  • Creation of structured templates for reporting with the purpose of effective analysis of units' activities;
  • Recommendations for the effective allocation of budget and resources.

Thus, marketing analysis is needed in order to:

  • Get a holistic view of the business;
  • Improve the management of the company and finance;
  • More accurately forecast and plan marketing initiatives;
  • Increase the effectiveness of existing marketing programs through the proper allocation of resources;
  • Increase the profitability of the company and the return on investment.

Analytical Marketing Techniques

Here are the most popular ones.

  • Review of the settlement (the business region) by key criteria. This type of services involves the calculation of the basic characteristics; indicators of the market (sector) occupied, such as the market saturation, the weight of competitive influence, the number of market participants, potential customers, and the capacity of a market and so on.
  • Comparative characteristics of geographical objects of business management. Such a service consists in the comparison of settlements, regions by their macroeconomic indicators (average per capita income, GDP, etc.), ratings (credit, investment attractiveness), market development, competition power, market saturation, etc. with the aim of selecting a specific city or region to enter the market.
  • Analytical calculation of market capacity. This implies the calculation of current consumer market volumes (both in cash and in physical terms).
  • Estimation of market potential includes calculation of the possible (predicted, perspective) consumer volume at current price indicators (transition from substitute products, deferred consumption, etc.).
  • Calculation of market shares. Here, the percentage ratio of the turnover of each of the market participants (competitors) to the turnover of the whole market is calculated.
  • Competitive rating, calculated on the basis of consumer preferences. This includes ranking, calculation of indicators that are dependent on the evaluation of competitive activity and on important criteria for consumer choice.
  • The power of competitive influence (market saturation coefficient) is an indication of the degree of product offering in the market with a maximum threshold of 100%.
  • Forecasting the volume of sales/demand, consisting in assessing the possible level of demand for a new service, products, as well as in calculating the expected sales figures.
  • Penetration (the degree of penetration into the market segment) implies the determination of the commodity-purchasing ratio to the total population or to the quantitative indicators of companies operating on the market (for B2B). The indicators of penetration of new products, its dynamics demonstrate changes in the criteria for the share of new products in corporate turnover in its market output.
  • SWOT analysis is the analysis of internal factors of corporate development: weakness, strengths, existing threats and opportunities.
  • PEST analysis is the analysis of external factors that affect corporate dynamics: economic, political, technological, social, etc.

In other words, marketing analytics involves the collection of full-scale data for the correct management of the company and the choice of correct further moves, tactics, and strategies.

What Can You Do With Marketing Analytics?

  1. You will receive detailed information, backed up by figures and graphs on the marketing programs in your company. This will allow you to understand how analytical marketing techniques and channels have been effective.
  2. You will be able to identify the most successful analytical marketing practices and will be able to analyze them in detail, based on the main questions: "How many customers were attracted?", "What was the profit?", "What do consumers think of the brand?"
  3. You can predict the success of future campaigns and plan marketing activities more efficiently, relying on the data of analytical marketing plan, and also add new channels of communication, adjust your strategy and tactics.