Bài giảng Business Marketing - Chapter 15: Evaluating Marketing Efforts

McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.Managing Programs and CustomersPart FourPart FourManaging Programs and CustomersChapter 15Evaluating Marketing EffortsChapter 16Customer Retention and MaximizationChapter 15EvaluatingMarketing EffortsTHE PROCESS OF CONTROLMeasureperformanceCompareperformanceto standardReplicate causeof highperformanceEliminate causeof lowperformanceBelowStandard?AboveStandard?Exhibit 15-115-*THE FUNCTIONS OF A MARKETING CONTROL SYSTEMMEASURES ACTUAL PERFORMANCE AGAINST PLANNED PERFORMANCESensor - The Measuring ToolStandard – The Goal To AchieveMEASURES PRODUCTIVITY AND PROFITS BYTypes Of ProductsCustomersTerritoriesMEASURES KEY MARKETING VARIABLES:Customer SatisfactionAdvertising EffortsPricing StrategiesDistribution/Channel Activities15-*Measure what’s importantTHREE COMMON-SENSEPRINCIPLES OF CONTROLAssumptions and goalsdetermine measuresWhat gets measuredis what gets done15-*DIMENSIONS OF CONTROLMicroMacroInputRegional Sales Office ExpenseTrade Show BudgetProduct X Development CostTotal Selling ExpensesPromotion BudgetTotal R&D BudgetOutputRegional Sales Office RevenueLeads from Trade ShowsSales for Product XTotal RevenueCorporate PositionTotal Division RevenueExhibit 15-215-*Exhibit 15-3 INPUT VARIABLES Price Product R&D Advertising Promotion Distribution Marketing Research Marketing Administration SET BY BUDGETACTIONPHASETHEMARKETINGPROGRAMMARKETREACTIONTHEMARKET OUTPUT VARIABLES Sales Market Share Profit Communication results Distribution results Buyer attitudes and behavior COMPARED TO PERFORMANCE STANDARDSCONTROL OF INPUT AND OUTPUT VARIABLES15-*THE COMPONENTS MEASURED BY THE BALANCED SCOREBOARDFINANCIAL RESULTSNet incomeProfit marginReturn on investmentReturn on assets managedCUSTOMER RESULTSRevenue per customerAccount shareCustomer satisfactionIntent to repurchaseINTERNAL BUSINESS PROCESSEmployee satisfactionData availabilityNew product development cycleCredit approval cycleLEARNING & GROWTHMEASURESCompleted training programsNew patents obtainedNew products introducedExhibit 15-415-*DEALING WITH VARIANCE IN OUTCOMESFOUR CAUSES OF VARIANCECHANGES TO PROCESSCHANGES BYRANDOM FACTORS TINKERING VARIANCEMaking minoradjustments SYSTEMATIC SOURCESChange systems tocreate newmeasures EXTERNAL CAUSESIdentified uncontrollablecauses, like the economy RANDOM CAUSESBoth uncontrollable andunidentified causes; howmuch can be attributed toknown cause15-*VARIANCE – UNDERSTANDING THE CAUSESTinkering Variance:Improving the little things in an existing system/processSystematic Variance:Out with the old, in with the newExternal Causes of VarianceThe external environment provides all kinds of challenges beyond management controlRandom Causes of VarianceNot only are there uncontrollable causes, there are variables that cannot be identified. Things happen15-*Exhibit 15-5TINKERING: Make changes within a sales territory to narrow the range of varianceVARIANCE: HOW DO YOU NARROW THE DIFFERENCEJanFebMarchAprilMayJune0100125150175200WilcoxYoungZornSales in $00015-*0100125150175Sales in $000200225250275JanFebMarAprMayJuneJulAugSepNew production introductionVARIANCE: HOW DO YOU ADJUST PERFORMANCESystematic Change: Create new systems with a new range of performance standardsEach dot represents salesperson performance. A new product brings higher levels of sales.Exhibit 15-615-*VARIANCE: HOW DO YOU ADJUST FOREXTERNAL ENVIRONMENTAL ACTIVITIESEach dot is a salesperson’s performance. The range is due to seasonality of customers’ purchases External causes of variance: Create a response to changes caused by things beyond your controlSales in $0000100125150175200225250275JanFebMarAprMayJuneJulAugSepOctNovDecExhibit 15-715-*BETTER PERFORMANCE:OUTPUT AND INPUT TOOLS OF CONTROLStandardSetting ProcessProsConCommentBenchmarkingCan learn and improveHard to find someone willing to let you benchmarkCan use industry association measuresQuotas andTargetsEasy to establishCan be difficult to account for varianceConsider sources of variance when settingBudgets andPricing PlansEasy to establishLack of flexibility can lead to missed opportunitiesCreate systems for opportunity evaluationExhibit 15-815-*THREE TOOLS FOR BETTER CONTROL OF SYSTEM PERFORMANCESET OUTPUT AND INPUT STANDARDS Of Performance That Can Be Observed And MeasuredDEVELOP MEASUREMENT TOOLS Such As Marketing Audits, Customer Satisfaction Measures And Accounting SystemsCREATE SEARCH TOOLS Such As Reporting Systems And Information Systems To Find Variance And Its Causes15-*SUMMARY OF MEASUREMENT TOOLSExhibit 15-9Measurement Tools Pro Con CommentSources of DataMarketingAuditsComplete processreviewDifficultand time- consumingMost beneficial when done regularly but not frequentlyObservation and survey in the field by the auditorsCustomer Satisfaction MeasurementCan be a predictor of future salesChallenge tofind what orwho caused (dis)satisfac-tionUsed as ameasure of performanceSurveys of customers, including decision makers and usersAccountingSystemsEnables allocation of fixed costsHard to applyto specific customersUse a variety to understand customer and product profitabilityTransaction systems such as accounts receivable, shipping, and manufacturing15-*KEYS TO THE MARKETING AUDITExternal EnvironmentMarketing StrategyLevel of Marketing OrientationMarketing Systems and ProcessesMarketing FunctionalityMarketing ProductivityCONDUCTING AN EVALUATION OF A FIRM’S MARKETING ACTIVITIES AND ITS ENVIRONMENT WILL INCLUDE REVIEWING ITS:15-*CRITICAL TO DECISION MAKING:ALLOCATING COSTSOBJECTIVE: INCREASE CONTROL OVER EXPENSES AND INCREASE PROFITSFull CostingTo work best, must allocate every cost to a specific product/cost centerContribution AnalysisTo work best, all incremental costs have to be identifiable and allocatableActivity-Based Cost AccountingTo work best, all revenues and expenses have to be allocated to each activity15-*FULL COSTING ALLOCATIONAssume: Two sales teams, one with six members and the other with nine; one sales office supporting both teamsPRODUCT APRODUCT BRevenues$500$800Direct Costs 50 100Overhead Costs(say $150 divided 60/40) 60 90Net Revenue$390$61015-*CONTRIBUTION ANALYSISSales OfficeASales OfficeBSales OfficeCTotalSales$350$320$380$1,050Less variable costs 170 160 175Contribution margin$180$160$205Fixed costs controllable by sales manager535254Sales manager’s contribution margin$127$108$151Fixed costs identified but not controlled by sales manager 19 19 19Sales office contribution$108$ 89$132$328Common costs$231Income before taxes$ 97Exhibit 15-1215-*COMPARING CONTRIBUTION AND ABC METHODS Digital WamometerTricometerSales$545$545Less variable costs1 320 335Contribution margin$225$210Contribution MethodLess fixed mfg. costs2 85 50 50 15Less fixed selling costs3 30 25 25 20Income using ABC$110$185Income using contribution$150$1351Includes sales commissions, direct costs of manufacturing and shipping2Total fixed mfg. costs = $100, but allocated based on complexity in mfg. process3Total fixed selling costs (administrative overhead and sales office expenses) = $50, but allocated on the basis of digital wamometer requiring six calls to every four for the tricometer using ABCExhibit 15-1215-*All of the aboveOften combined with experimentation for more powerful decision-makingCan lead to incremental, rather than innovative, thinkingCan inform forecasts, as well as explain past successStatistical AnalysisMarketing systems that track source of saleUsed more frequently with CRM systemsHard to control for all potential causesEstablishes cause and effectExperimentationInterviews of people involvedLook forunderlying principles of success or failureCan be hard to apply learning to new situationsMethod of organizational learningCase AnalysisSurveys, transaction systems, and third-party sources such as Dun & BradstreetIncreasing use of data warehouseslets managers access data directlyDifficult to get data into a formateveryone can useSelf-serve reportingInformation SystemsSalespeople, trade show managers, other marketing managers, as well as transaction systemsCompanies are moving to real-time systems like dashboardsCan get tradition-boundMethod of information sharing across work-groupsReporting SystemsSources of DataCommentConProSearch ToolsBETTER PERFORMANCE: SEARCH TOOLS FOR IDENTIFYING VARIANCEExhibit 15-1315-*THE REALITY TREE PROCESS FOR DETERMINING PROBLEMS: FOCUS ON OUTCOMESUndesirable Effect:Avg. 52 days, invoiceto paymentUndesirable Effect:Accounts Receivable sendsIncorrect invoicePotential Cause:Accounts Receivablemisprocesses invoicesPotential Cause:Customers are slowpayersPotential Cause:Customers can’t pay Potential Cause:Credit terms causeslow payCore problem:Information submitted isincomplete or fragmented Potential Cause:Accounts Receivablereceives poorinformation Undesirable Effects:Order-entry misrecordsterms of salesUndesirable Effect:Shipping generatesincorrect recordsExhibit 15-1415-*