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Judging marketing mix effectiveness (Difficulties faced by SMEs managing…
Judging marketing mix effectiveness
Introduction
Measuring marketing effectiveness is difficult
Marketing operates within a volatile and uncontrollable external environment
Marketing operates within an internal environment which is subject to constraint and change
Authors have uncovered more than 250 different metrics for measuring marketing performance
Larger firms can handle around 20 metrics
SMEs may need only five or six
To practice marketing without any rational means of effectiveness measurement would be reckless and wealth destroying
Difficulties faced by SMEs managing marketing metrics
Lack of both
internal non-financial data as well as external (market) data.
Revenues can be skewed by one or two large customer changes, easily
“swamping” any marketing contribution to financial results.
Agreed marketing plans can be diluted by “events”, diverting management and
staff focus.
The firm’s management may not feel it can afford to wait “years” to see the value
of the long-term marketing effects
In smaller organizations the culture is closely set by the long-standing owner/manager and their personal experiences/prejudices
Smaller organizations may have a tendency to focus on operational rather than strategic marketing activities, where making monthly/quarterly sales is a matter of survival
Very small firms often adopt a pragmatic approach to judging marketing decisions and the effectiveness of previous activity because sophisticated data gathering and analysis are relatively expensive
Measurement themes to guide the
evolution of “better measures”
Trends in marketing effectiveness measures continue to shift with some metrics becoming more popular and others going out of fashion
Seggie concluded that existent marketing metrics needed systematic reexamination and went on to formulate seven
From non-financial to financial
From backward looking to forward looking
From short term to long term
From macro to micro data
From independent metrics to causal chains
From absolute to relative
From subjective to objective
Marketing mix effectiveness assessment
Stage1. Communications effectiveness ranking
How well the firm uses marketing communications tools in the context of its market
Categories
Advertising, Brochures/printable, Direct marketing, Sales force,
Telephone, Press, Web, Exhibitions and conferences, Sales channels.
Stage 2. Offer effectiveness ranking
How well the firm uses the total marketing mix, excluding marketing communications, in the context of its market
How attractive the firm’s offer is viewed
relative to customer needs and competitive propositions
Data source for this ranking is external information from customer interviews, competitor analysis,
practitioner knowledge and market norms.
Stage 3. Marketing mix effectiveness rank
Consolidation of the communications effectiveness and offer effectiveness findings into a single and highly visual marketing mix effectiveness “rank”.
2X2 matrix is used