Marketing control process. What do we want to achieve?- Goal setting. What is happening?- performance measurement. Why it is happening?- performance diagnosis. What should we do about it?- corrective action.

 Types of marketing control. A.Annual plan control. I.Sales analysis – Consists of measuring and evaluating actual sales in relation to sales goals. a.Sales variance analysis – Measures relative contribution of different factors to gap in sales performance Variance due to price decline = (1-0.80)(3000) = Variance due to volume decline = (1)( ) = b.Micro sales analysis.

II.Market share analysis. Defining & measuring market share a.Overall market share – Company’s overall market share is it’s sales expressed as a % of total market sales. b.Served market share – As a % of total sales to it’s served market. c.Relative market share – To top three competitor. Company sales as % of combined sales of three largest competitor.

These conclusions from market share analysis are subject to certain qualification. oThe assumption that outside forces affect all companies in the same ways is often not true. oThat a company’s performance should be judged against the average performance of all companies is not always valid. oIf new firm enter the industry then existing firms market share might fall. oSometimes market share decline is deliberately engineered by a company to improve profits. oMarket share can fluctuate for many minor reasons.

Managers must carefully interpret market share by product line, customer type, regions & other breakdowns. Four components of market share movements – Overall = Customer X Customer X Customer X Price Market Share Penetration Loyalty Selectivity Selectivity Customer Penetration. It is the percentage of all customers who buy from this company. Customer Loyalty. It is the purchase from this company by it’s customer expressed as a percentage of their total purchase from all suppliers of the same product.

Customer Selectivity. It is the size of average customer purchase from company expressed as a percentage of size of average customer purchase from an average company. Price Selectivity. It is the average price charged by this company expressed as a percentage of the average price charged by all companies.

III.Marketing expenses to sales analysis. Sales force to sales – 15% Advertising to sales – 5% Sales promotion to sales – 6% Market research to sales – 1% Sales administration to sales – 3% Upper control limit. Desired level. Lower control limit.

IV.Financial analysis. Rate of return on net worth.  Profit margin. Net profits Return on Financial Net sales assets Leverage Asset Turnover X Net Sales Net Profits Total assets Total assets Total assets Net worth Return on net worth = Net profits Net worth V.Customer Satisfaction Tracking.

B.Profitability Control. I.Methodology of marketing profitability analysis. a.Identifying the functional expenses. Selling – Advertising – Packaging – Delivery – Billing – Collection. oSales. oCost of goods sold. oGross Margin. oExpenses. oSalaries. oRent. oSupplies. oNet Profit.

b.Assigning the functional expenses to the marketing entities. c.Preparing a profit & loss statement for each marketing entity. II.Determining the best corrective action. Alternative action evaluation. III.Direct v/s Full costing. oDirect cost. oTraceable common costs. oNon traceable common costs.

C.Efficiency Control. I.Sales force efficiency. oAverage no. of sales calls per sales person per day. oAverage sales call time per contact. oAverage revenue per sales call. oAverage cost per sales call. oEntertainment cost per sales call. oPercentage of orders per hundred sales call. oNo. of new customers per period. oNo. of loss customers per period. oSales force cost as a percentage of total sales.

II.Advertising efficiency. oAdvertising cost per thousand target buyers reached by media vehicle. oPercentage of audience who noted, saw, associated & read most of each print advertisement. oConsumer opinion on the advertisement content & effectiveness. oBefore & after measurement of attitude towards the product. oNo. of enquiries stimulated by the advertisement. oCost per enquiry.

III.Sales promotion efficiency. oPercentage of sales sold on deal. oDisplay cost per sales dolor. oPercentage of coupons redeemed. oNo. of enquiries resulting from demonstration. IV.Distribution efficiency. oInventory control. oWarehouse location. oTransportation modes.

D.Strategic control. I.Marketing effectiveness rating review. oCustomer philosophy. oIntegrated marketing organization. oAdequate marketing information. oStrategic orientation. oOperational efficiency.

 Marketing audit. It is a comprehensive, systematic, independent & periodic examination of company’s business unit’s marketing environment, objectives, strategies & activities with a view to determine problems areas & opportunities & recommending a plan of action to improve the company’s marketing performance.

 Marketing audit procedure.  Components of marketing audit. 1.Marketing environment audit. Macro environment. oDemographic. oEconomic. oEcological. oTechnological. oPolitical. oCultural

Task environment oMarkets. oCustomers. oCompetitors. oDistribution & dealers. oSuppliers. oFacilitators & marketing firms. oPublics. 2.Marketing strategy audit. oBusiness mission. oStrategy. oMarketing objectives & goals.

3.Marketing organization audit. oFormal structure. oFunctional efficiency. oInterface efficiency. 4.Marketing system audit. oMarketing information system. oMarketing planning system. oMarketing controlling system. oNew product development system. 5.Marketing productivity audit. oProfitability analysis. oCost effectiveness analysis.

6.Marketing function audit. oProduct. oPrice. oDistribution. oAdvertising sales promotion publicity. oSales force.  Marketing excellence review.  Company ethical & social responsibility review.