Module 7
Lucy Bell
Chapter14PowerpointSlidessg.pptxChapter 14
Controlling and Monitoring
Chapter 14 Learning Objectives
Explain the value of monitoring market share compared to using absolute measure of performance.
Recognize the value of sales, profitability, contribution, and variance analysis.
Understand the array of specific marketing mix control procedures to monitor mix-specific activities.
Appreciate returns in the digital age.
Describe the scope of an organization’s marketing audit and elements of that audit.
Learning Objective 1
Five steps to monitor marketing activity
Establish performance standards.
Specify data requirements.
Establish data collection system.
Analyze and monitor marketing activities.
Adjust strategy and tactics.
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Learning Objective 1
Absolute indicators of performance limits— knowledge of the dynamics of the marketplace
Examples: gross revenue, expense control, net revenue, etc.
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Learning Objective 1
Three types of market share measures
Overall market share
Sales as a percent of total industry sales
Served market share
Sales as a percent of total sales of the served market
Relative market share
Calculated percentage of organization’s sales compared to largest competitor or combination of three largest competitors
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Learning Objective 1
Components of a measuring system
Breadth—track multiple aspects of marketing
Depth—completeness of an activity
Time—track changes over time for trends
Learning Objective 2
Sales analysis
Compares the actual sales generated with the established goals.
Criteria: product line analysis, customer size, geographic region, or discount level
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Learning Objective 2
Profitability analysis
Examines the profitability of sales by customers, regions, products, or salespeople
Direct costing—costs assigned that are directly associated with product or service line
Indirect costs—fixed costs that cannot be related to just one product line or service program
Full costing—assigns both direct and indirect costs with the product or service
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Learning Objective 2
Contribution analysis
Considers the contribution of profit to fixed costs or overhead
PVCM—percentage variable contribution margin
Average unit price – Unit variable cost
Unit price
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Learning Objective 2
Variance analysis
Compares actual results to pre-established performance targets
Volume variance—difference between expected and real unit sales
Contribution (price) variance—difference between expected and real contribution margin
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Learning Objective 2
Variance analysis (cont.)
Product mix variance—difference between actual and targeted performance levels due to composition of products or services offered
Price variance—difference between actual price received and the targeted level because of discounting
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EXHIBIT 14-1
Learning Objective 3
Sales force control
Tied directly to the performance expected
Sales/expense ratio—indicates the efficiency of the salesperson in generating output
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Learning Objective 3
Advertising control
Essential to specify advertising objectives prior to promotional campaign
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TABLE 14-7 Monitoring Advertising Campaigns
Objective 4
Tracking digital returns
Volume—number of mentions
Share of voice—volume of mentions of a brand expressed as a percentage of the volume of mentions of all brands in a product category
Engagement—individual taking some action beyond just reading
Return on investment—amount of revenue gained minus cost of investment
Learning Objective 4
Tracking digital returns (cont.)
Cost per acquisition
Stickiness—time taken to view all pages divided by total number of unique visitors
Average time per visit
Learning Objective 3
Customer satisfaction control
Surveys
Essential for marketing strategy success
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Learning Objective 5
Marketing audit
A systematic review and appraisal of the total marketing operation
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Learning Objective 5
Five purposes for the marketing audit
Appraises total marketing operation
Centers on the evaluation of objectives and policies and assumptions that underlie them
Aims for prognosis as well as diagnosis
Searches for opportunities and means for exploiting them, as well as for weaknesses and means for elimination
Practices preventive as well as curative marketing practices
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Summary
Market share provides a relative rather than absolute measure of performance. Market share can be either overall market share, served market share, or relative market share.
Sales analysis monitors sales performance relative to targets. It can be conducted on multiple bases for comparison.
Profitability analysis examines profitability by customers, regions, or products. The underlying premise is to monitor for a heavy half phenomenon.
Summary (cont.)
A key issue in profitability analysis is the assignment of cost. It can use either a direct-cost or full-cost approach.
Contribution analysis considers performance of a service based on its contribution to profit or overhead.
Variance analysis compares actual results to targets. In conducting variance analysis it is possible to identify the source of the variance.
Variance can be due to volume, contribution, product mix, or price.
Summary (cont.)
Return-on-investment is a useful way to choose between projects. Many organizations set a threshold ROI.
Multiple measures of input and output are used in the monitoring of salespeople. A common efficiency indicator is the sales/expense ratio.
To monitor ongoing advertising efforts, an organization can establish media effectiveness, creative effectiveness, and service effectiveness ratios.
Summary (cont.)
In the digital age, returns can be tracked by visits, action, views, and engagement.
Customer satisfaction control is at the foundation of any effective marketing program. Dissatisfied customers have been found to represent a real dollar cost to the organization.
Periodically, every health care entity should conduct a marketing audit, which is a systematic review of all policies, procedures, and structures used to implement marketing activities.
