Marketing evaluation and control
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 11, 2021
Marketing evaluation and control
No marketing process, even the most carefully developed, is guaranteed to result in
maximum benefit for a company. In addition, because every market is changing constantly,
a strategy that is effective today may not be effective in the future. It is important to
evaluate a marketing program periodically to be sure that it is continuing to achieve its
objectives.
Marketing control
There are four types of marketing control, each of which has a different purpose: annual-
plan control, profitability control, efficiency control, and strategic control.
Annual-plan control
The basis of annual-plan control is managerial objectives—that is to say, specific goals,
such as sales and profitability, that are established on a monthly or quarterly basis.
Organizations use five tools to monitor plan performance. The first is sales analysis, in which
sales goals are compared with actual sales and discrepancies are explained or accounted for.
A second tool is market-share analysis, which compares a company’s sales with those of its
competitors. Companies can express their market share in a number of ways, by comparing
their own sales to total market sales, sales within the market segment, or sales of the
segment’s top competitors.
Third, marketing expense-to-sales analysis gauges how much a company spends to
achieve its sales goals. The ratio of marketing expenses to sales is expected to fluctuate, and
companies usually establish an acceptable range for this ratio. In contrast, financial analysis
estimates such expenses (along with others) from a corporate perspective. This includes a
comparison of profits to sales (profit margin), sales to assets (asset turnover), profits to
assets (return on assets), assets to worth (financial leverage), and, finally, profits to worth
(return on net worth). Finally, companies measure customer satisfaction as a means of
tracking goal achievement. Analyses of this kind are generally less quantitative than those
described above and may include complaint and suggestion systems, customer satisfaction
surveys, and careful analysis of reasons why customers switch to a competitor’s product.
Profitability control
Profitability control and efficiency control allow a company to closely monitor its sales,
profits, and expenditures. Profitability control demonstrates the relative profit-earning
capacity of a company’s different products and consumer groups. Companies are frequently
surprised to find that a small percentage of their products and customers contribute to a
large percentage of their profits. This knowledge helps a company allocate its resources and
effort.
Efficiency control
Efficiency control involves micro-level analysis of the various elements of the marketing
mix, including sales force, advertising, sales promotion, and distribution. For example, to
understand its sales-force efficiency, a company may keep track of how many sales calls a
representative makes each day, how long each call lasts, and how much each call costs and
generates in revenue. This type of analysis highlights areas in which companies can manage
their marketing efforts in a more productive and cost-effective manner.
Strategic control
Strategic control processes allow managers to evaluate a company’s marketing program
from a critical long-term perspective. This involves a detailed and objective analysis of a
company’s organization and its ability to maximize its strengths and market opportunities.
Companies can use two types of strategic control tools. The first, which a company uses to
evaluate itself, is called a marketing-effectiveness rating review. In order to rate its own
marketing effectiveness, a company examines its customer philosophy, the adequacy of its
marketing information, and the efficiency of its marketing operations. It will also closely
evaluate the strength of its marketing strategy and the integration of its marketing tactics.
Marketing audit
The second evaluation tool is known as a marketing audit. This is a comprehensive,
systematic, independent, and periodic analysis that a company uses to examine its strengths
in relation to its current and potential market(s). Such an analysis is comprehensive because
it covers all aspects of the marketing climate (unlike a functional audit, which analyzes one
marketing activity), looking at both macro-environment factors (demographic, economic,
ecological, technological, political, and cultural) and micro- or task-environment factors
(markets, customers, competitors, distributors, dealers, suppliers, facilitators, and publics).
The audit includes analyses of the company’s marketing strategy, marketing organization,
marketing systems, and marketing productivity. It must be systematic in order to provide
concrete conclusions based on these analyses. To ensure objectivity, a marketing audit is
best done by a person, department, or organization that is independent of the company or
marketing program. Marketing audits should be done not only when the value of a
company’s current marketing plan is in question; they must be done periodically in order to
isolate and solve problems before they arise. The marketing actors
The elements that play a role in the marketing process can be divided into three
groups: customers, distributors, and facilitators. In addition to interacting with one another,
these groups must interact within a business environment that is affected by a variety of
forces, including governmental, economic, and social influences.
Customers
In order to understand target customers, certain questions must be answered:
Who constitutes the market segment? What do they buy and why? And how, when, and
where do they buy? Knowing who constitutes the market segment is not simply a matter of
knowing who uses a product. Often, individuals other than the user may participate in or
influence a purchasing decision.
Several individuals may play various roles in the decision-making process. For instance, in
the decision to purchase an automobile for a small family business, the son may be the
initiator, the daughter may be an influencer, the wife may be the decider, the purchasing
manager may be the buyer, and the husband may be the user. In other words, the son may
read on a Web site that businesses can save money and decrease tax liability by owning or
leasing company transportation. He may therefore initiate the product search process by
raising this issue at a weekly business meeting.
However, the son may not be the best-qualified person to gather and process
information about automobiles, because the daughter worked for several years in the auto
industry before joining the family business. Although the daughter’s expertise and research
efforts may influence the process, she may not be the key decision maker. The mother, by
virtue of her position in the business and in the family, may make the final decision about
which car to purchase. However, the family uncle may have good negotiation skills, and he
may be the purchasing agent. Thus, he will go to different car dealerships in order to buy the
chosen car at the best possible price.
Finally, despite the involvement of all these individuals in the purchase process, none of
them may actually drive the car. It may be purchased so that the father may use it for his
frequent sales calls. In other instances, an individual may handle more than one of these
purchasing functions and may even be responsible for all of them. The key is that a marketer
must recognize that different people have different influences on the purchase decision, and
these factors must be taken into account in crafting a marketing strategy.
In addition to knowing to whom the marketing efforts are targeted, it is important to
know which products target customers tend to purchase and why they do so. Customers do
not purchase “things” as much as they purchase services or benefits to satisfy needs. For
instance, a conventional oven allows users to cook and heat food. Microwave oven
manufacturers recognized that this need could be fulfilled—and done so more quickly—with
a technology other than conventional heating. By focusing on needs rather than on
products, these companies were able to gain a significant share in the food cooking and
heating market.
Knowledge of when, where, and how purchases are made is also useful. A furniture store
whose target customers tend to make major purchases in the spring may send its mailings
at the beginning of this season. A food vendor may set up a stand near the door of a busy
office complex so that employees must pass the stand on their way to lunch. And a jeweler
who knows that customers prefer to pay with credit cards may ensure that all
major credit cards are accepted at the store. In other cases, marketers who understand
specifics about buying habits and preferences also may try to alter them. Thus, a remotely
situated wholesale store may use deeply discounted prices to lure customers away from
local shopping malls or online stores.
