The control process in action - Marketing Management

The strategic control process should enable management to accomplish the following:

  1. to allow problems, i.e. deviations from plans and budgets to be identified at an early stage on a continuous basis as the plan is being implemented;
  2. to assess causes of deviations from standards of performance so corrective action can be taken;
  3. to provide an input to the process of identifying and analysing opportunities and threats;
  4. to provide a positive incentive to staff to improve their performance.

Marketing Control Process Steps

The concept of a control process can be translated into action. In the context of a marketing control system, each of the steps involves the following.

Determining control parameters

Determining what to control (the parameters) is the start point of the control process. Overall, sales, costs and profits are the major parameters, but marketing control involves more than just these key areas. The company may have other key objectives which relate to, for example, social responsibility or technological reputation. In addition, each of the marketing functions will also involve objectives, and hence parameters, which will need to be controlled. The parameters of marketing control must include those for controlling the marketing objectives and strategies themselves in order to assess whether or not they are still relevant to the marketing environment.

Steps in the control process

Steps in the control process

The objectives of control

When we have decided what to control, control objectives can be set. These will encompass functional and financial performance in addition to more qualitative objectives. If planning objectives have been clearly set, the control process can build on these. Each objective must be achieved within a given budget, so budgetary control is essential. Broad control objectives need to be broken down into sub-objectives for each area of marketing activity. Having done this we can then establish specific standards of performance, together with the degree of deviation, if any, which will be tolerated in the system.

Establishing specific standards of performance and allowed deviations

The next step in the control process is to establish specific performance standards that will need to be achieved for each area of activity if overall and sub-objectives are to be achieved. For example, to achieve a specified sales objective, a target of performance for each sales area may be required. In turn, this may require a specific standard of performance from each of the salespeople in the region with respect to, for example, number of calls, conversion rates and order value. Like each standard of performance, we must also try to determine what are allowable deviations for both under- and over-performance. When these allowable deviations are exceeded, then this would initiate some sort of corrective action. Such limits are useful for initiating ongoing control.

Measuring performance

Clearly, standards mean that we must measure performance against them. In addition to determining appropriate techniques of measurement we have to determine such things as frequency of measurement, e.g. daily, weekly, monthly or annually and the responsibility for measurement, i.e. who should do it. More frequent and more detailed measurement usually means more cost. We need to be careful to ensure that the costs of measurement and the control process itself do not exceed the value of such measurements and do not overly interfere with the activities of those being measured.

Analysing results

Analysis and interpretation of results prior to taking any action is one of the most important and yet most difficult steps in the control process. Because marketing is a complex process there is potential for misinterpreting the causes of variances from standards and hence compounding the problem by taking the wrong corrective action. The system of marketing control, therefore, requires an information system which is based on disaggregative data so that variances can be broken down into their constituent causes. The system should also allow responsibilities for these variances to be pinpointed so that corrective action can be communicated. The analysis system should also allow sufficient time for detailed analysis to be made to avoid taking precipitous actions.

Taking corrective action

The final step in the control process is implementation of action programmes designed to correct any deviations from standard. There is a temptation to assume that corrective action only needs to be taken when results are less than those required or when budgets and costs are being exceeded. In fact, both ‘negative’ (underachievement) and ‘positive’ (overachievement) deviations may require corrective action. For example, failure to spend the amount budgeted for, say, sales force expenses may indicate either that the initial sum allocated was excessive and needs to be reassessed, and/or that the sales force was not as ‘active’ as they might be. Similarly, overachievement on, say, market share or profitability may mean that overall marketing objectives in these areas need to be looked at again. This relates back to the analysis stage of the control sequence, but it shows that all significant deviations from standards should be looked at with a view to taking corrective action. Another question which arises vis-à-vis corrective action (and indeed the whole process of control) is timing: how quickly should corrective action be implemented? This will vary according to the area of control and the nature and extent of deviations from standards.

For example, a sudden fall in sales and profits will probably require immediate action. In broader terms, some elements of control will effectively be continuous; for example, the control of sales calls and expenses, which may be carried out on a monthly, weekly or even daily basis. Other areas of control will relate more to the annual planning sequence and will include sales and market share analysis. Finally, we may have control processes which relate to the totality of marketing activities and systems, i.e. a comprehensive examination of the marketing function itself within the organization. In effect, this is a marketing audit which is an essential part of the strategic control process.

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