Marketing Controi

Marketers must continually plan their analysis, implementation, and control activities.

Marketing control

The process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved.

Because many surprises occur during the implementation of marketing plans, marketers must practice constant marketing control—evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained. Marketing control involves four steps. Management first sets specific marketing goals. It then measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between its goals and its performance. This may require changing the action programs or even changing the goals.

Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. Its purpose is to ensure that the company achieves the sales, profits, and other goals set out in its annual plan. It also involves determining the profitability of different products, territories, markets, and channels. Strategic control involves looking at whether the company's basic strategies are well matched to its opportunities. Marketing strategies and programs can quickly become outdated, and each company should periodically reassess its overall approach to the marketplace.

The marketing audit covers all major marketing areas of a business, not just a few trouble spots. It assesses the marketing environment, marketing strategy, marketing organization, marketing systems, marketing mix, and marketing productivity and profitability. The audit is normally conducted by an objective and experienced outside party. The findings may come as a surprise—and sometimes as a shock—to management. Management then decides which actions make sense and how and when to implement them.

Author I Measuring ROI has Comment | become a major marketing emphasis recently. But it can be difficult. For example, an ad for America's championship football game the Super Bowl reaches nearly 100 million consumers but may cost as much as $3 million for 30 seconds of airtime alone. How do you measure the specific return on such an investment in terms of sales, profits, and building customer relationships? We'll look into that question again in v Chapter 15.

Measuring and Managing Return on Marketing Investment (PP8i-83)

Marketing managers must ensure that their marketing dollars are being well spent. In the past, many marketers spent freely on big, expensive marketing programs, often without thinking carefully about the financial returns on their spending. They believed that marketing produces intangible outcomes, which do not lend themselves readily to measures of productivity or return. But all that is changing:

For years, corporate marketers have walked into budget meetings like neighborhood junkies. They couldn't always justify how well they spent past handouts or what difference it all made. They just wanted more money—for flashy TV ads, for big-ticket events, for, you know, getting out the message and building up the brand. But those heady days of blind budget increases are fast being replaced with a new mantra: measurement and accountability. Armed with reams of data, increasingly sophisticated tools, and growing evidence that the old tricks simply don't work, there's hardly a marketing executive today wTto isn't demanding a more scientific approach to help defend marketing strategies in front of the chief financial officer. Marketers want to know the actual return on investment (ROI) of each dollar. They want to know it often, not just annually Companies in every

Return on marketing investment (or marketing ROI)

The net return from a marketing investment divided by the costs of the marketing investment.

segment of American business have become obsessed with honing the science of measuring marketing performance. "Marketers have been pretty unaccountable for many years," notes one expert. "Now they are under big pressure to estimate their impact."20

In response, marketers are developing better measures of return on marketing investment. Return on marketing investment (or marketing ROI) is the net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities.

It's true that marketing returns can be difficult to measure. In measuring financial ROI, both the R and the I are uniformly measured in dollars. But there is as of yet no consistent definition of marketing ROI. "It's tough to measure, more so than for other business expenses," says one analyst. "You can imagine buying a piece of equipment . . . and then measuring the productivity gains that result from the purchase," he says. "But in marketing, benefits like advertising impact aren't easily put into dollar returns. It takes a leap of faith to come up with a number."21

One recent survey of CMOs from top marketing companies found that "make marketing accountable" emerged as a top strategic theme, second only to "put the consumer at the heart of marketing." However, another recent survey of top marketing executives found that although 58 percent of the companies surveyed have formal accountability programs, only 28 percent are satisfied with their ability to use marketing ROI measures to take action.22

A company can assess return on marketing in terms of standard marketing performance measures, such as brand awareness, sales, or market share. Many companies are assembling such measures into A.marketing dashboards—meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance. Just as automobile dashboards present drivers with details on how their cars are performing, the marketing dashboard gives marketers the detailed measures they need to assess and adjust their marketing strategies.23

Increasingly, however, beyond standard performance measures, marketers are using customer-centered measures of marketing impact, such as customer acquisition, customer retention, customer lifetime value, and customer equity. These measures capture not just current marketing performance but also future performance resulting from stronger customer relationships. Figure 2.8 views

¡.;WMwr Val lumeBv Chert IVst.

ÎÂ1

Online Survey Champion

Online Survey Champion

There are people all over the world trying to find ways to make money online. From stay at home moms looking to make a few extra dollars to college students and entrepreneurs, the allure of making your own hours and working from home or from the local coffee shop is very appealing.

Get My Free Ebook


Post a comment