Marketing Evaluating and Controlling

Marketing Evaluating and ControllingMarketing is a complex activity. It involves many options, it requires coordination among many functions and tasks, and it must respond to changes in customers and competitors. These factors make planning difficult and often make the achievement of a marketing strategy or program even more problematic. Without good control and evaluation procedures, even the best marketing effort could produce unexpected and often undesirable results.

Meanings and Purposes of Control and Evaluation

The terms control and evaluation are often used with the same meaning, but they can be distinguished. Control is “the feedback process that helps the manager learn (1) how ongoing plans are working and (2) how to plan for the future”.

Control means keeping on target. Control occurs while an activity or project is in progress, and managers are informed immediately when any significant deviation from objectives is detected or even suspected so that corrective action can be taken.

Evaluation involves reviewing the results from a program or activity to determine how well-intended objectives were achieved.

Evaluation is sometimes considered more diagnostic than control because evaluation attempts to explain the reasons for results. But in a practical sense, control and evaluation are closely related and often hard to separate since they aim to better performance.

The essence of evaluation is obtaining relevant information for gauging performance. Marketing executives are continually monitoring performance, and often they must revise their strategies to cope with changing conditions.

To ensure the marketing program’s effective operation, some form of program evaluation needs to be conducted periodically. Marketers cannot afford to leave their performance to chance since the company’s very survival may depend on the program’s success or failure.

To achieve marketing objectives and general organizational objectives, marketing managers must control marketing activities effectively.

The marketing control process consists of establishing performance standards, evaluating actual performance by comparing it with established standards and reducing the differences between desired and actual performance.

The success of marketing plans frequently depends on the level of execution achieved by the salespeople, dealers, and advertising agencies who implement programs in the real world. Business firms must have a control system that quickly points out execution errors and helps managers take corrective action.

The purposes and areas of evaluation are shown in the following table:

Purposes and Areas of Evaluation and Control

Purposes
AreasFinding new opportunities /avoiding threatsKeeping performance on the trackProblem-solving
Environmental scanningX
Product-market analysisXX
Marketing program performance analysisXX
Effectiveness of mix componentsXX

This classification represents the major strategic evaluation activities that occur in any firm. As indicated, there are three reasons for the evaluation. The evaluation types listed in the exhibit are accomplished in the areas of evaluation where Xs have been placed.

Steps Taken in Establishing an Evaluation Program

The major steps that must be taken in establishing an evaluation program are discussed below:

To compare actual performance with performance standards, marketing managers must know what marketers within the company are doing and have information about external organizations’ activities that provide the firm with marketing assistance.

Information is required about marketing personnel’s activities at the operations level and various marketing management levels.

Most businesses obtain marketing assistance from external individuals or organizations, such as advertising agencies, intermediaries, marketing research firms, and consultants.

To acquire the most benefit from external sources, a marketing control process must monitor their activities. Although it may be difficult to obtain the necessary information, it is impossible to measure actual performance.

Records of actual performance are compared with performance standards to determine whether and how much discrepancy exists. For example, a salesperson’s actual sales are compared with their sales quota to determine how much difference exists.

If a significant negative discrepancy exists, the marketing manager takes corrective action. In some organizations, electronic data processing equipment enhances a marketing manager’s ability to evaluate actual performance.

Determining What Performance to Evaluate

Despite the importance of evaluations, they are often done on a very informal and haphazard basis. Though time and money may be saved, these approaches to evaluate rarely are useful. They tend to be inaccurate, overly superficial, or too late to help the marketer determine whether corrective actions are required.

To properly evaluate the marketing activities, the executive should conduct a marketing audit, a formal and systematic performance analysis of some or all of the marketing mix elements.

It can also be defined as a systematic examination of a firm’s marketing unit’s objectives, strategies, organization, and performance. The differences between an audit and haphazard evaluations are the preplanning and formality the audit brings to the evaluative process.

Though a marketing audit’s magnitude and frequency will depend on the executive’s particular needs, the thoroughness and overall quality will not. Thus, the marketing executive is likely to obtain more accurate and complete information and better ensure the success of the marketing program.

Basically, marketing audits are conducted for the following two purposes.

They are:

  1. to analyze an on-going marketing program to ensure that the product objectives are achieved; and
  2. to review a completed marketing program to assess its overall effectiveness.

Control audits are those conducted to monitor the progress of a marketing program. They are designed to help the marketing executive identify and correct any deviations from the planned activities.

Review audits are used to appraise a marketing program’s past performance, such as audits, which are used to obtain historical data that may prove beneficial in future planning.

A marketer should monitor every activity continuously. To ensure that the elements of the mix are working properly.

However, the costs of making a comprehensive analysis can be very high. Therefore, a marketer usually does not evaluate all facets every time an audit is made, except when a review audit is conducted.

While conducting a review, an analysis of all areas is made, although it may not be as detailed an examination. On the other hand, in the case of control audits, only a select few elements will be examined at any one time.

In evaluating a marketing program, a marketer includes such areas as the marketing mix demands and the target market. Like the marketing organization and the research activities, other issues are also occasionally the subject of evaluation.

Subject to the time, budgetary constraints, and the executive’s needs, an entire area or some of its components will be the evaluation program’s focal point.

For reducing the scope of the evaluation, the marketing executive must include those aspects that are most important for his business and have significant impacts on future growth.

Marketing Control Process – Controlling Marketing Activities

To achieve marketing objectives and general organizational objectives, marketing managers must control marketing activities effectively.

The marketing control process consists of establishing performance standards, evaluating actual performance by comparing it with established standards and reducing the differences between desired and actual performance.

No management process can be completed without control. Marketing control, you know, is the process of evaluating achieved results against established standards and of taking corrective action to exploit opportunities or solve problems.

Planning and controlling are closely interrelated because plans include statements about what to be accomplished.

For purposes of control, these statements function as performance standards. A performance standard is an expected level of performance against which actual performance can be compared.

Examples of performance standards might be reducing customers’ complaints by 50 percent, a monthly sales quota of $100,000, or a 20 percent increase per month in new customer accounts.

The Control Process

The control process involves evaluating results against objectives. Although this stage of the process is crucial, it tells us if we have met, exceeded, or fallen short of objectives. Perhaps the most creative aspect of control involves establishing why those results were achieved and what we should do in response – in other words, what, if any, corrective action should we take.

marketing control process

For example, suppose that Mr. Ali, the marketing manager for a division of a pharmaceutical company, has established a sales objective of $5 million for the year. The first quarter’s goal was $1.5 million, but the results reported by the accounting department show sales of only $1 million.

Therefore, Mr. Ali will have to take a hard look at the planning process’s assumptions and how the marketing plan has been implemented.

He will look for data on total industry sales compared with those forecast by the pharmaceutical industry. He will reevaluate the company’s plan to add salespeople and probably a dozen other marketing plan aspects.

The results of all this effort may lead Mr. Ali and other executives to the conclusion that environmental factors have depressed the industry and that the original objective of $5 million is no longer realistic. If that is the case, they may revise the planned objectives accordingly.

However, their study may reveal that the industry is doing well and that the problem is more specific to their firm. Perhaps the sales department has failed to add salespeople as planned and, in fact, has failed to replace some who have quit or retired.

In this case, a mid­course correction might be in order. The firm may wish to hire a new sales manager who will be more successful at replacing personnel. Still, a third conclusion may be reached.

The original marketing plan may be found to be valid. The $0.5 million shortfalls in sales may be simply a technical problem. Clearly, these are essential parts of the control process. Managers must not only measure the results but also decide what to do about them.

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