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Marketing Metrics of Tencent Plc

Introduction

A management report plays an essential role in the promotion plan of an organization. For instance, it displays the primary marketing metrics applied in advertising the organization’s critical products. Besides, they create a visualization of the current marketing performance to assess its overall organizational potential. Through the selling metrics calculated, we can relate the computed data to the external environment. A significant number of organizations have realized their strengths, weaknesses, opportunities, and threats through promoting metrics analysis (Husain et al., 2020). As such, the Strat Consultation firm aims at giving Tencent the best metrics and analysis. The management report will assess and analyze the budget, profit margin, debt to equity ratio, and revenue and expenses. The management report gives an illustration of the significance of each metric, the interpretation, and, lastly, how relevant it is to the external market.

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Marketing Metrics

Budget

A budget is an essential tool in the organization and market metric analysis. A reasonable budget should always focus on expenses, revenues, and, finally, the organization’s major goals and objectives. Similarly, an affordable budget must show the actual and expected amounts for every expense in the company. Poor budgeting is the major factor contributing to many firms’ closures globally (Douglas and Overmans, 2020). Statistics have affirmed that more than 85% of medium and small organizations operated on a budget without a strategic plan (Selmi and Chaney, 2018). Budgets create a vision for the organization as they align with the company’s primary objectives and goals. More especially, they represent the company’s future performance. Thus, through a good budget, an organization can create a better vision for the future.

Every budget must be designed with strategic goals that the organization aspires to achieve in the future. The objectives of a financial plan are set before the organization receives revenue. For instance, the budgeting committee will assess the past financial years and compare them with the current market to obtain better goals. Many firms have failed in this process as they assume that a financial plan is all about expenses and revenues (Weygandt, Kimmel, and Kieso, 2018). An organization needs to have long-term goals in the plan and short-term objectives, which are ordinary expenses. Through this marketing metric analysis, Strat Consultation firm aims at three objectives. First, to align the feasibility structure with the future aims of the company. Second, implement the corporation’s objectives to achieve the budget objectives and compare the actual results to assess if the business has achieved the set aims. By understanding the above objectives, the organization will have a better budget and expected future performance.

Strat Consultation firm will also construe the budget metrics as per the calculated marketing dashboard. The analysis will be made after the whole process is done to eliminate any data bias level. The explanation will include the significant recommendations required to be made after the entire process is completed. The firm will also create a variation section that will compare the actual amount of funds and the cost the organization spent in the financial year through the financial statement. The budget variance would help a business check if it met the goals or the actual figures as projected by the firm (Proctor, 2020). If the percentage of expenses is less than the budget plan, then the organization’s objectives worked well. Therefore, a lower percentage of expenses implies that the plan’s objectives and goals were achieved.

Recommendations will be made based on the statement features that were assessed. For example, the budget requirements will check on percentage variation, including the actual and targeted values. If the difference is negative, then it means the firm never achieved its expectations on that product. As a result, there is a need for the company to change some marketing and production essentials such as pricing, packaging, and promotion. The company will be advised based on the objectives set and what they target within that period. As such, every budgeting index calculated will be interpreted, and a conclusion will be issued.

Profit Margins

Profit margin is essential in assessing the performance of an organization. The profitability proportions play a crucial role in predicting the business’s future based on the overall strategic plans. Similarly, the ratio will be used in assessing the degree to which business activity can generate profit. This relation is one of the best affirmed metric measurements in business and forecast (Paul.S and Paul. C, 2020). Thus, it forms a good analysis because it will give the business its dollar value. All the bottom-line expenses such as tax will be subtracted to ensure the result is an actual figure representing the business’s current earnings. Investors mainly use profit margin as a way of testing the financial performance of a business before financing their projects. Therefore, it should be treated as one of the essential ratios in the industry.

Profitability margin is expressed as a percentage after many factors have been considered. The ratio expressed profitability in terms of cents earned from one dollar (Koskinen et al., 2020). The primary goal of the profitability margin of the marketing metrics is to calculate its potential to perform well in the market. Similarly, the firm aim at including the core objectives of the company in business. For example, the plan of the organization to the marketing metrics is to create more revenue. The objectives will help the consultancy firm in streamlining metrics to the market values.

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After the process of calculating profitability, we will have an interpretation of the values. The analysis will be based on the initial objectives set by the firm in the financial reports. At the end of every financial year, each firm develops a plan of what they want to achieve. The research by Suryani (2020) has proposed a good profit margin ratio should be more than the organization’s dollar value. However, Strato will consider the ratios for the past ten years to generate a concrete plan. The ratios from 2010 to 2020 will be applied to estimate the company’s profitability margin. A profitability margin should be above 10%, which is medium. Hence, the firm should aim at more than 20%, which is high.

The results that have been collected and analyzed explain how the firm will be given recommendations for practice. If the firm has attained a lower profitability margin of less than 10%, it will be recommended to undertake the suggested recommendations to increase its revenue capacity. The recommendations given will vary from one ratio to another because its objectives of achieving a good amount of capital are not always constant. Therefore, the interpretation will be based on the nature of the ratio and the objectives of the firm.

Debt to Equity Ratio

The debt-to-equity ratio is one of the ratios that measure how the company can finance its activities through debt and the whole fund. For example, how the company can finance its activities in the process of creating more revenue. This report will consider the past data and how the company has been performing to fund ongoing projects. The company’s history will help us create goals that the company will achieve in the future. More significantly, the history of how the company has been borrowing is essential. Hence, the equity debt will determine the creditworthiness of the company to the investors.

The primary goal of determining the debt-to-equity ratio is to ascertain the future decisions of the company. However, the firm must have its objectives that will be incorporated into our plan. For example, we target making the firm understand the cost of borrowing to the whole-owned capital. A significant number of companies globally always aim at reducing their borrowed money (Douglas and Overmans, 2020). They try their best to develop decisions that will help create more capital rather than consider borrowing. Also, we aim at making the best recommendations after we have finished the analysis. Through our marketing metrics, the company gains better access to the segments and gets equipped with its internal operations.

The interpretation of the ratio will serve a huge purpose in creating more capital. A good debt to equity ratio ranges typically from 1 to 1.5. Thus, if an organization scores a debt ratio of less than one, it means that they borrow a lot of money. Having more business debts is a high risk, and the business will be applying for loans (Winn and Martindale, 2020). Though, this does not mean that if your company has debt, it cannot perform well. Many firms in the world have performed well despite their debt-to-equity ratio. Money is borrowed during a crisis and when the firm wants to fund new programs that they had not initially planned. Thus, our marketing dashboard will be aiming to develop excellent and achievable objectives that can help the firm reduce its debts.

Revenue

Revenue is the amount of capital that is earned from the operations of the business. The amount earned plays an essential role in the marketing metrics of a business. For instance, every marketing option is determined by the amount revue earned in business. As such, when making marketing decisions, it is essential to consider how the company earns. The marketing plan budget is always determined by the nature of the cash flows in the organization. The marketing plan for Tencent will mainly include the revenue earned for the past few years in the analysis. Similarly, revenue aligns with the marketing objectives that are targeted by the company. Therefore, there is a higher likelihood of higher performance in the market with higher revenue.

In the revenue metrics, we mainly aim to develop a marketing plan relevant to the company’s earnings. Every company earns a different amount of revenue, and it is essential to factor in the marketing metrics (Faedlulloh and Wiyani, 2019). The revenue is the last factor that will be considered in the process, and it will determine if the company’s marketing decisions can be applied. Higher revenue will give the organization more freedom in implementing more marketing decisions (Selmi and Chaney, 2018). As a result, through the products delivered to the market, a forecast of future revenue can also be created.

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The revenue interpretation will be based on trend analysis based on the years of operation from 2010 to 2020. Trend analysis means the trend as either increasing or decreasing will be calculated and presented in a graph. The nature of the graph will be used in predicting the future trends of revenue for the firm. If the trend has been increasing over the past few years, it is in a good position. Though, if a downward trend is observed, then the firm is in a risky position. At this point, the firm is recommended to check the products’ quality and check on the competitors’ power in the market. Therefore, revenue is very impactful in marketing decisions.

Conclusion

The fact that a marketing dashboard plays an essential role in business cannot be ignored. More notably, through analyzing the key performance ratios like profitability, debt to equity ratio, budget, and revenue. Research has contended that marketing metrics are essential in creating and achieving strategic plans. The consideration of the key aspects of marketing will increase the performance of Tencent PLC in the marketing sector.

Reference List

Douglas, S. and Overmans, T. (2020) ‘Public value budgeting: propositions for the future of budgeting’, Journal of Public Budgeting, Accounting & Financial Management, 32(4), pp.623-637.

Faedlulloh, D. and Wiyani, F. (2019) ‘Promote good governance in public financial: the practice of local budget (APBD) transparency through open data Jakarta in Jakarta Provincial Government’, Journal of Good Governance, 15(1).

Husain et al. (2020) ‘Firm’s value prediction based on profitability ratios and Dividend Policy’, Finance and Economics Review, 2(2), pp.13-26.

Koskinen et al. (2020) ‘Product-level profitability analysis and decision-making: opportunities of IT application-based approach’, International Journal of Product Lifecycle Management, 12(3), p.210.

Paul, S. and Paul, C. (2020) Financial accounting. La Vergne: New Central Book Agency.

Proctor, T. (2020) Absolute essentials of strategic marketing. Abingdon: Routledge.

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Selmi, N. and Chaney, D. (2018) ‘A measure of revenue management orientation and its mediating role in the relationship between market orientation and performance’, Journal of Business Research, 89, pp.99-109.

Suryani, A. I. (2020) ‘Effect of profitability ratios on banking capital adequacy (study at PT. Bank Rakyat Indonesia Tbk.)’, International Journal of Science, Technology & Management, 1(4), pp. 264-268.

Weygandt, J. J., Kimmel, P. D., and Kieso, D. E. (2018) Financial accounting with international financial reporting standards. Rosewood, USA: John Wiley & Sons.

Winn, T. and Martindale, T. (2020) ‘Key business ratios’, Journal of Business & Finance Librarianship, 25(1-2), pp.92-97.

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