Controlling marketing performance - Marketing Strategy

In contrast to mechanical systems, marketing activities are inherently more volatile. This is due to a constantly changing business environment driven by the needs and wants of the market. Measuring marketing performances a process of determining appropriate criteria by which to judge activity. Kotler (1997) identifies four main areas associated with the control of marketing activity (see Figure):

Control of marketing activities

• Annual planning :This has the purpose of evaluating the extent to which marketing efforts, over the year, have been successful. Evaluation will focus on analyzing sales, market share,expenses and customer perception. Commonly, sales performance is a major element of this analysis. All other factors provide explanation of any variance in sales performance.
• Profitability :All marketing managers are concerned with controlling their profit levels. By examining the profitability of products, or activities, it is possible to make decisions relating to the expansion, reduction or elimination of product offerings. Additionally, it is common to break distribution channels and segments down in terms of profitability. Remember, it is important to have a systematic basis for allocating cost and defining profit.
• Efficiency control :Efficiency is concerned with gaining optimum value from the marketing assets. Managers are looking to obtain value for money in relation to marketing activity. The promotional aspects of marketing (sales, advertising, direct marketing, etc.) are commonly subject to such controls. Figure displays examples.
• Strategic control :There is a need to ensure that marketing activities are being directed towards strategic goals and that marketing is an integral part of the overall process of delivering value. A strategic review will aim to assess that marketing strategy, and subsequent implementation, is appropriate to the market place. A review of this nature will take the form of a marketing audit – a comprehensive examination of all marketing activity to assess effectiveness and improve marketing performance.

Evaluating and Controlling Marketing Performance

These areas of marketing control are general in nature and specific measures of marketing performance are required. Performance measures and standards will vary by organization and market conditions. A representative sample of the type of data required to control marketing activities successfully is shown in Figure . The aim is to break the general areas (annual plan, profitability, efficiency and strategy) into measurable component parts to which responsibility can be assigned.Remember, in the context of marketing a balanced view is required.

Control of marketing activity

No one variable should dominate the control process. For example, marketing strategists have been guilty of following a credo of ‘market share at any cost’.While such a variable is important, it is not a panacea and consideration needs to be given to other factors such as profitability. Additionally, marketing control should measure only dimensions over which the organization has control. Rewards, sanctions and management actions only make sense where influence can be exerted. Control systems should be sensitive to local market conditions and levels of competition. For instance, developing markets and mature markets may require different control mechanisms.