using marketing productivity to assess marketing performance

5333 words

Marketers are understandably preoccupied with measuring marketing performance. For this purpose certain Marketing productivity measures have been proposed by Past researches. However, among the many possible marketing performance measures available, which few should be chosen? On the one hand, the key measures must be simple enough to be usable and on the other hand they must be comprehensive enough to assess the marketing productivity and its impact on marketing success. This paper presents an annotated literature review that provides the foundation for the development of a list of the most valuable marketing performance measures. These performance measures are selected on the basis of a number of criteria, for instance the measures need to occur frequently in literature, they must be valuable to most companies as well as they must have predictive power. Thus, analysis of major measures being considered useful by Marketing and Finance managers has been carried out. Finally, the implications for marketing practice and future research are discussed.

“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it” (Miller & Cioffi, 2005).

Introduction and Statement of Problem

Despite its importance, marketing is one of the least understood, least measurable functions at many companies. With sales force costs, it accounts for 10 percent or more of operating budgets at a wide range of public firms. Its effectiveness is fundamental to stock market valuations, which often rest upon aggressive assumptions for customer acquisition and organic growth. Nevertheless, many corporate boards lack the understanding to evaluate marketing strategies and expenditures. Most directors-and a rising percentage of Fortune 500 CEOs-lack deep experience in this field (Farris, Bendle, Pfeifer, & Reibstein, 2010).

Marketing executives, for their part, often fail to develop the quantitative, analytical skills needed to manage productivity. Right-brain thinkers may devise creative campaigns to drive sales but show little interest in the wider financial impact of their work. Frequently, they resist being held answerable even for top-line performance, asserting that factors beyond their control-including competition-make it complicated to examine the results of their programs.

In this environment, marketing decisions are often made without the information, therefore expertise and measurable feedback is needed. As Procter & Gamble’s Chief Marketing Officer has said, “Marketing