1. Chapter 13 Measuring and Delivering Marketing Performance

2. Chapter Overview Profitability Analysis
Questions Used to Measure Marketing Performance
The Contingency Planning Process

3. Exhibit 13.2 - The Performance Measurement Process

4. Profitability Analysis
Analysts determine costs associated with specific marketing
activities
Limitations
Objectives can best be measured in nonfinancial terms
Profit is a short-term measure
Profits can be affected by factors over which management has no control

5. Profitability Analysis
Full costing: Analysts assign both direct, or variable, and indirect costs to the unit of analysis
Indirect costs: Fixed joint costs that cannot be linked directly to a single unit of analysis
Direct costing: Use of contribution accounting

6. Customer Satisfaction
Understanding and measuring the criteria used by customers
Using face-to-face approaches

7. Examples of Questions a Strategic Monitoring System Should Be Able to Answer1.
What changes in the environment have negatively affected the current strategy? 2.
What changes have major competitors made in their objectives and strategies? 3.
What changes have occurred in the industry in such attributes as capacity, entry barriers, and substitute products? 4.
What new opportunities or threats have derived from changes in the environment, competitors’ strategies, or the nature of the industry? 5.
What changes have occurred in the industry’s key success factors? 6.
To what extent is the firm’s current strategy consistent with the preceding changes?
Refer to Exhibit 13.9

8. Decisions for Strategic Monitoring Systems
Identifying key variables
Tracking and monitoring
Strategy reassessment

9. Identifying Key Variables
Concerned with:
External forces
Effects of certain actions taken by the firm to implement the strategy

10. Tracking and Monitoring
Use strategic plan as an early-warning system
Monitor industry sales regularly
Examine relevancy, accuracy, and cost of obtaining needed
measures

11. Strategy Reassessment
Takes place at periodic intervals
Quarterly
Annually
Setting triggers to signal the need to reassess viability of the firm’s strategy

12. Questions Used to Measure Marketing Performance
Who needs what information?
Sales analysis
Geographical areas
Product, package size, and grade
Customer
Channel intermediary
Method of sale
Order size

13. SEO and SEM Analysis
Search engine optimization (SEO): Set of techniques that ensure a company’s web pages are ranked highly when consumers use
search engine for information
Search engine marketing (SEM): Buying keywords for which
consumers are likely to search

14. Questions Used to Measure Marketing Performance
When and how often is it needed?
Key criteria
Timeliness
Store payroll expense
In what media and in what format(s) should it be provided?
Advances in information technology made possible the measurement and reporting

15. Questions Used to Measure Marketing Performance
Does your system of marketing metrics measure up?
Developing a set of marketing metrics as part of an overall performance measurement system is:
Getting the metrics aligned with the strategy
What contingencies should be planned for?
Strategies and action plans are based on assumptions about the future

16. Exhibit 13.14 - The Contingency Planning Process

17. Global Marketing Monitoring
Measuring the performance is difficult because of the number of
countries involved:
Each presenting a unique set of opportunities and threats
Use of electronic data interchange and the Internet should:
Simplify performance evaluation across countries

18. Control and planning mechanism to review total marketing efforts
The Marketing Audit
Control and planning mechanism to review total marketing efforts
Conducted across all products and business units
Covers the SBU’s:
Objectives and strategy
Plan of action for each product-market entry
Provides an assessment of each SBU’s overall competitive position

19. Objectives and strategy: Calls for an assessment of the internal
Types of Audits
Marketing environment: Requires an analysis of the firm’s present and future environment
Identifies significant trends
Objectives and strategy: Calls for an assessment of the internal
factors
Instructor: See Exhibit 13.15

20. Organization: Deals with firm’s overall structure
Types of Audits
Planning and control system: Evaluates adequacy of the systems and the firm’s new development procedures
Organization: Deals with firm’s overall structure
Organization of marketing department
Extent of synergy between the various marketing units

21. Marketing productivity: Evaluates the profitability of the company’s:
Types of Audits
Marketing productivity: Evaluates the profitability of the company’s:
Individual products
Markets
Key accounts
Marketing functions: Examines the marketing-mix elements

22. Types of Audits
Ethical: Evaluates the extent to which the company engages in
ethical and socially responsible marketing
Product manager: Determines whether product managers are
channeling their efforts in the best ways possible