Assignment Sample on Marketing Analytics
Introduction
Marketing analytics determines business market of an organisation by considering business operations of that organisation. Evaluating market segment and target customers’ organisation implements strategy and determines business objectives by understanding market conditions. Significance of marketing analytics is to assess qualitative and quantitative data of the current market in order to improve marketing strategy and operation of this firm. Unilever creates a mission for improving marketing strategy and bettering service for future prosperity. This report comprises marketing analytics of Unilever by considering their cash flow, budget, income statement. Moreover, this study provides recommendations for controlling business and marketing metrics and overall evaluation.
Background of business and assumptions for chosen organisation
Unilever is an Anglo-Dutch multinational consumer goods organisation that has headquarters in London, UK. Unilever aims to meet every day needs for personal care, nutrition and hygiene. Best known brands of Unilever includes Hellmann’s, Ben & Jerry’s, Knorr, Wall’s, Lipton, Vaseline, Tresemme, Radox, Sure, Comfort and Dove (Bbc, 2021). The company was started on 2nd September 1929. The company was started by merger of British soap maker Lever Brothers and Dutch marine producer Marine Unie. The company acts as one of the leading consumer goods companies in UK. Currently, turnover of Unilever has decreased by 2.4% including negative impact of 5.4% from currency movements and positive influence of 1.2% from acquisitions net of disposals. Also, underlying operating profit was £ 9.4 billion, reduction of 5.8% including negative impact from currency which is 6.5% and underlying operating margin decreased by 60bps in 2020 (Unilever, 2021). Analysis of financial forecasts and marketing analytics has been made for Unilever. Information of last two urea’s financial statements was used for estimating financial performance of Unilever in 2021. This information would be useful for Unilever in order to develop personal care, nutrition and hygiene related goods and services.
Estimated monthly cash inflows and outflows
Annual budget is financial plan used by organisation for understanding overall performance of company. It includes details of total income, total expenses, cash inflows and outflows of business (Subačienė et al. 2018).In case of Unilever, estimation of monthly cash inflow and outflow has been made in annual budget. The data of venture has been estimated for focusing on annual report of 2020. In 2019, Unilever has £51980million revenue and £50724million revenue in 2020 (Unilever, 2021). Slight reduction in performance took place due to global financial crisis of 2020, but slight improvement in performance has been estimated in current year. Operating cost of venture has been identified as turnover minus operating expenses which is operating cost. Thus, operating expenses of Unilever is £ 43500 million operating expenses.
| Annual budget forecast including monthly cash inflows and outflows | |||||||||||||
| Entity: Unilever, estimated for financial year 2021) | |||||||||||||
| Details | Jan (£m) | Feb (£m) | Mar (£m) | Apr (£m) | May (£m) | Jun (£m) | Jul (£m) | Aug (£m) | Sep (£m) | Oct (£m) | Nov (£m) | Dec (£m) | Total (£m) |
| Initial cash balance | 6,000 | 5,387.83 | 4,775.67 | 4,163.50 | 3,551.33 | 2,939.17 | 2,327 | 1,714.83 | 1,102.67 | 490.50 | – 121.67 | – 733.83 | 31,597 |
| Total income | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 52,500 |
| Total expenses | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 3,625 | 43,500 |
| Projected ending balance of cash | |||||||||||||
| Income from sales | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 4,375 | 52,500 |
| Other income | 108 | 108 | 108 | 108 | 108 | 108 | 108 | 108 | 108 | 108 | 108 | 108 | 1,295 |
| Total income | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 4,483 | 53,795 |
| Operating expenses | |||||||||||||
| Rent | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 12,000 |
| Net costs (Finance) | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 500 |
| Maintenance | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 50 | 600 |
| Non-underlying costs | 71 | 71 | 71 | 71 | 71 | 71 | 71 | 71 | 71 | 71 | 71 | 71 | 850 |
| Phone | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 960 |
| Salaries | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 25,000 |
| Wages | 833 | 833 | 833 | 833 | 833 | 833 | 833 | 833 | 833 | 833 | 833 | 833 | 10,000 |
| Advertising | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 1,440 |
| Marketing | 155 | 155 | 155 | 155 | 155 | 155 | 155 | 155 | 155 | 155 | 155 | 155 | 1,860 |
| IT Cost | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 110 | 1,320 |
| Improvement charges | 70 | 70 | 70 | 70 | 70 | 70 | 70 | 70 | 70 | 70 | 70 | 70 | 840 |
| Property taxes | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 80 | 960 |
| Furnishings | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 3,600 |
| Other expenses | 101 | 101 | 101 | 101 | 101 | 101 | 101 | 101 | 101 | 101 | 101 | 101 | 1,211 |
| Expenses (Total) | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 5,095 | 61,141 |
| Net Cash after considering opening cash | 10,482.92 | 9,870.75 | 9,258.58 | 8,646.42 | 8,034.25 | 7,422.08 | 6,809.92 | 6,197.75 | 5,585.58 | 4,973.42 | 4,361.25 | 3,749.08 | 85,392 |
| Closing cash balance | 5,387.83 | 4,775.67 | 4,163.50 | 3,551.33 | 2,939.17 | 2,327 | 1,714.83 | 1,102.67 | 490.50 | – 121.67 | – 733.83 | – 1,346 | 24,251 |
Annual budget estimation for Unilever indicates reduction in closing cash balance due to higher cash outflow in business. It has been estimated that Unilever would use higher short-term cash balance for developing products and services. It would create higher cash outflows in business cash compared to cash inflows. However, the company is required to improve its working capital structure for preventing mid-year cash crunch in management.
Estimated income statement
Income statement is financial statement used in business for determining profitability in an accounting year. As opined by Adiloglu (2019), it has been identified that income statement is estimation of expenses, revenue and profit for a financial year. In case of Unilever, income statement of current year has been projected by considering data of last two years.
| Estimated income statement | ||
| Entity: Unilever, estimated for financial year 2021) | ||
| Details | Sum (£ m) | Sum (£ m) |
| Turnover | 52,500 | |
| profit (Operating) | 9,000 | |
| Non-underlying item credits | 1,100 | |
| Net costs (Finance) | 500 | |
| Pensions | 11 | |
| Income (Finance) | 350 | |
| Income (Cost) | 750 | |
| Non-underlying costs | 850 | |
| Net monetary gain | 15 | |
| Net profit in joint ventures | 180 | |
| Non-underlying item credits | 200 | |
| Other income/(loss) | 150 | |
| PBT | 40,094 | |
| Tax | 2,000 | |
| Tax impact of non-underlying items | 150 | |
| Net profit | 10,256 | |
Income statement estimation of Unilever includes estimated turnover £52500 turnover, £9000 operating income and £43500 million operating expenses. Other expenses of Unilever has been estimated as £1100 million non-underlying credit items, £500 million finance cost, £11 million pension, £750 million other costs and £150 other income. Profit before tax has been estimated as £40094 million, £2000 million tax and £10256 million net profit.
Forecast statement of financial position
Statement of financial position is also known as balance sheet of venture. This financial statement represents liabilities, asset and equity balance of organisation (Crookes and Conway, 2018). Forecast of financial statement has been made for Unilever in order to develop products and services in current year. It would support marketing analytics of the company which helps in development of products and services as per requirements of customers.
| Forecast statement of financial position | ||
| Entity: Unilever, estimated for financial year 2021) | ||
| Details | Sum (£m) | Sum (£ m) |
| Assets | ||
| Assets (Non-current) | 18,500 | |
| Goodwill | 15,500 | |
| Assets- Intangible | 10,500 | |
| equipment, plant & property | 2,800 | |
| Pension asset | 1,500 | |
| Assets (Deferred tax) | 890 | |
| Assets (Financial) | 930 | |
| non-current assets (Others) | 1,000 | |
| Assets (Current) | 51,620 | |
| Inventories | 4,500 | |
| current receivables | 5,050 | |
| tax assets | 380 | |
| cash equivalents | 5,600 | |
| financial assets (others) | 820 | |
| Assets for sale | 30 | |
| Assets (Non-current) | 16,380 | |
| Assets (Total) | 68,000 | |
| Liabilities | ||
| Liabilities (Current) | ||
| liabilities (Financial) | 15,000 | |
| current liabilities and payables | 6,500 | |
| tax liabilities (current) | 3,000 | |
| Provisions | 550 | |
| Liabilities for sale | 5 | |
| Liabilities (Current) | 25,055 | |
| Financial liabilities | 2,350 | |
| tax liabilities | 2,805 | |
| Pensions liabilities: | ||
| Funded schemes | 2,150 | |
| Unfunded schemes | 3,500 | |
| Provisions | 1,590 | |
| Tax liabilities (Deferred) | 3,200 | |
| Non-current liabilities (others) | 4,350 | |
| Liabilities (Non-current) | 19,945 | |
| Liabilities (Total) | 45,000 | |
| Equity | ||
| Shareholders’ equity | 18,000 | |
| Non-controlling interests | 5,000 | |
| Equity (Total) | 23,000 | |
| Liabilities and equity (Total) | 68,000 | |
Financial position statement forecast of Unilever includes £ 68000 million asset and liabilities & equities. It has been estimated that Unilever has higher non-current assets than current assets. Also, proportion of current liabilities of Unilever is lower than long-term liabilities. A slight increment in equity balance has been estimated along with increment in non-controlling interest. Thus, an increasing trend in performance has been found as per financial statement’s estimations.
Identification and justification of critical marketing processes
Marketing process for an organisation refers to analyse marketing mix, strategic marketing, implementation of marketing and control in marketing.
Product Mix
Unilever applies a complex marketing mix in their marketing process by considering differentiation of products in this competitive market. Unilever provides products of different categories such as foods, home care, personal care and refreshment products (Unilever, 2020). Unilever is addressed as a best foods and refreshment provider for its vast diversification of products. Organisational Structure of Unilever reflects the diversity of customer’s goods in their mix of product
Place Mix
Unilever sets their area of operation in global markets including retailers, stores and Kiosk and retailers are addressed as the primary distribution place for their product. Walmart is one of the best retailers of Unilever for distributing their products. In addition, Unilever occasionally uses Kiosk for directly introducing their products and stores are used in Unilever for specific products. Unilever uses a generic marketing process and strategy to distribute their product across the world.
Promotion Mix
Unilever uses promotional strategy to gain competitive advantage in this global market by promoting their products. In this respect, Unilever uses advertising as a primary promotion strategy to promote their product both online and offline. Unilever has been famous for its innovative product hierarchy in their official websites as well as on other retail e-commerce sites like Amazon and Ebay which has been successful in gaining revenue. Besides that, Unilever uses sales promotion, direct marketing and improves public relations to promote their product.
Pricing Mix
Unilever has succeeded to provide a wide range of variety of pricing in their products by considering diversification of products. As influenced by Suture and Urotadze (2017), it can be stated that marketing process of pricing mix of Unilever includes market- oriented pricing strategy, Bundle of products pricing strategy and premium level of pricing strategy. Market oriented pricing strategy depends on customers’ demands and target segment of this organisation.
Strategic Marketing
Unilever is concentrated on providing the best service by considering people’s concerns at the very first point and promoting their brand value. Strategic marketing included in Unilever is to provide the best experience for customers to increase their marketing processes.
Implementation of marketing
Implementation of marketing includes successfully planning and execution of 4p’s of marketing mix (Gringos, 2017). Successfully implementation of marketing in Unilever involves increasing their business operation in this competitive market.
Marketing Control
Unilever food, personal care, home care and other products needs adverse control in the marketing process to successfully implement a marketing mix. Marketing control includes branding, promoting, advertising of their product to gain marketing advantage in this market.
Recommended metrics and control mechanisms in respect of critical marketing processes
Evaluating the marketing process of Unilever, it is recommended to measure the marketing growth of this organisation.
Growth in sales
Marketing process can be measured by indicating increasing sales growth and sales revenue. Unilever increased their sales revenue by 1.9% in 2020 with increasing sales volume of 1.6% and 0.3% from price. It has worked as a key performance indicator of marketing success of Unilever. In 2019, sales growth of Unilever was 2.9% and in 2018 sales growth of this organisation is 3.25 (Unilever, 2020). It indicates that Unilever should increase efficiency in their marketing process.
Value of Customers
Lifetime value of customers is a commonly used business metric to evaluate marketing performance of an organisation (Suture and Urotadze, 2017). Value of customers can be created by giving them the best product services with discounts and various offers. Unilever creates value to the customer by providing them the best quality of foods, personal cares, home carers and other products. In addition to this, Unilever is concentrated about people’s concern to attract more customers to achieve business objectives as well as marketing objective of this organisation
Operating Profit margin
Operating profit margin of an organisation is another important of marketing metrics to evaluate marketing performance of that organisation. In 2020, Unilever’s operating margin was 18.5% whereas in 209 it was 19.1%, which represents the inefficiency of the marketing process of this organisation (Unilever, 2020). Unilever should look after their operating profit margin to increase efficiency of the marketing process. In their beauty and personal care products they get a profit margin of 52% which indicates the marketing process of these products creates excellent attention from customers and promotion of its products increases the sales volume of this product. In food and refreshment products, they get 33% of total net profit and 38% of total turnover which indicates Unilever should concentrate on their foods and refreshment items to increase efficiency in the marketing process (Unilever, 2020).
Social Media engagement of customers
Successfully implementation of marketing processes can be measured by increasing engagement of customers in social media. Marketing in social media increases customers’ attention and sales through online which is addressed as a performance metric of the marketing process. Unilever got success in increasing social media engagement and increasing their brand value (Unilever, 2020). In results, they increased their sales volume and operating profit in the past three years. However, an outbreak of corona virus has affected their sales volume in 2020 and it is expected that in 2021, Unilever will be succeeded to improve their sales operation through social media marketing strategy.
Overall evaluation of long-term viability of business
In the long term, Unilever achieved success to sustain profit for a long term period. Analysing the viability report of Unilever, it is identified that the funding capacity of this company threatens their business model, group objective, future profitability and solvency as well as liquidity. The potential impact of Covid 19 has affected their funding capacity and principle risk management procedure of this company (Unilever, 2020). Considering three years of viability assessment, management of Unilever has decided to implement a high level of strategic planning by considering certain factors. It includes considerable financial resources, operating performance of groups, customers, suppliers in countries throughout the world. In order to evaluate long term availability of Unilever, it is important to consider high cash generation of operational activities and accessibility to the debt market across the globe. Analysing the viability of Unilever, it is identified that this organization has flexibility of cash outflows and inflows which plays a vital role to increase the marketing programme of this organization (Unilever, 2020). In addition to this, Continuous diversification of product and introducing new technology and innovation in marketing strategy helps to sustain profit and creates marketing opportunities for growth and future prosperity.
This group has a healthy balance of long term and short term debt programs which ensures repayment of loan before maturity period. Unilever is concentrating not to exceed loan limits of 4 billion euro in a short term period. Evaluating the viability assessment of this organisation, it is reported that this company has $7.965 billion to assess credit facilities for future (Unilever, 2020). Primary risk management of this organisation is concentrated about creating life time value of customers to increase profitability in the long term period. In addition to this, management of Unilever is concentrated on looking altering risk of uncertainties in their operational activities.
Viability statement of Unilever Company represents that, this company has an ability to sustain profit in long term period as this organisation is concentrated about their dept program in long term and short term period. Evaluating the operating profit margin of this organisation, it is satiated that this company has a future opportunity to grow more in the global market. Since, their marketing strategy is concerned about customer’s needs and desires, financial management of Unilever has the ability to repay their loan in the long term period and it indicates profitability in future periods.
Reflection and critique of learning processes
The module “marketing analytics” helped me in understanding that marketing analytics is practice of managing and studying marketing related data for determining return on equity of marketing efforts. I have found that marketing acts as an opportunity for an organization that supports opportunity for improvement in product and services. At the initial stage of this module, I was anxious as well as furious about how I should proceed with the work and on what company I should start the work. I had two options for proceeding with the work. Either I can use an existing company or a planned start-up business. Then I decided to conduct the work on existing organization such as Unilever. I found Unilever as an efficient choice as I was able to access all data including financial & non-financial from annual reports and official websites. Also, I used learning’s from class notes and study materials for proceeding with the work.
The module has helped me in generating information on financial forecasting, marketing process and development of organisational strategy. By accessing financial and non-financial data, I was able to analyse elements of contemporary businesses and business environments. The assignment was useful for me in order to gain brief insight into materials and financial aspects of businesses. However, it was tough for me to determine what data should be used in the assignment. By the help of study materials I have found that financial data from consolidated statements and marketing data from the official website of the organisation should be used. Earlier, I was confused about whether I should use information only from study materials or used external data in the assignment. As per guidance of unit coordinator, I was able to combine data peer reviewed journals and articles with class’s study materials on critical marketing processes and control mechanisms. It has helped me recommending suitable ways of performance improvement to Unilever.
Conclusion
From the above report, it can be concluded that Unilever has an excellent marketing process which helps them to grow in the global market. Marketing process includes marketing mix of product, price place and promotion and Unilever creates product differentiation to increase more sales volume and achieve financial target of this firm, evaluating budget, income statement and balance sheet if this organisation concludes that this organization has excellent financial; a performance in the global market which helps them to gain competitive advantage in this market. Certain business metrics are used in an organisation to ascertain key performance of marketing processes. Business metrics include increasing sales growth rate of Unilever, lifetime value of customers and increase in operating margin profit. Evaluating the viable statement of Unilever, it is stated that this company has ability to sustain profit in future by implementing an excellent marketing process.
References
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Bbc (2021). About Unilever, UK. Available at: https://www.bbc.com/news/business-39009072 [Accessed on 10th April 2021]
Crookes, L. and Conway, E., (2018). Technology Challenges in Accounting and finance. In Contemporary issues in accounting, 5(4) pp. 61-83.
Grönroos, C., (2017). Relationship marketing and service: An update. Journal of Global Scholars of Marketing Science, 27(3), pp.201-208.
Seturi, M. and Urotadze, E., (2017). About Marketing Process Model and Relationship Marketing. In Proceedings of International Workshop „Model-Based Governance for Smart Organizational Future (pp. 169-171).
Subačienė, R., Alver, L., Brūna, I., Hladika, M., Mokošová, D. and Molín, J., (2018). Evaluation of accounting regulation evolution in selected countries. Entrepreneurship and sustainability issues, 6(1), pp.139-175.
Unilever (2021). About Unilever, UK. Available at: https://www.unilever.com/Images/ir-q4-2020-full-announcement_tcm244-558959_en.pdf[Accessedon 11th April 2021]
Unilever (2021). About Unilever, UK. Available at: https://www.unilever.com/investor-relations/annual-report-and-accounts/archive-of-annual-report-and-accounts/[Accessedon 12th April 2021]
Unilever, (2020), “ About Annual report “. Available at https://www.unilever.com/investor-relations/annual-report-and-accounts/archive-of-annual-report-and-accounts/ [Accessed at 7 April 2021]
Unilever, (2020), “About Customer relationship”. Available at https://www.unilever.com/investor-relations/results-and-presentations/analysts-consensus/ [Accessed at 8 April 2021]
Unilever, (2020),” About strategic report”. Available at https://www.unilever.com/our-company/strategy/ [Accessed at 5 April 2021]
Unilever, (2020). “About Unilever Products.” Available at: https://www.unilever.com/brands/ [Accessed at 8 April 2
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