Page 75 - Foundations of Marketing

42 Part 1 | Strategic Marketing and Its Environment

tight coordination within the marketing unit and among other departments that contribute to
marketing activities, such as production. Pinpointing which activities can be performed simul-
taneously will reduce the total amount of time needed to put a given marketing strategy into
practice. Since scheduling is a complicated task, most organizations use sophisticated computer
programs to plan the timing of marketing activities. HP, for example, uses its own software to
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monitor sales, Web traffic, schedule orders and production, and schedule marketing activities.

LO 3 . Describe the major EVALUATING MARKETING STRATEGIES
elements of strategic
performance evaluation.
To achieve marketing objectives, marketing managers must evaluate marketing strategies effec-
tively. Strategic performance evaluation consists of establishing performance standards,
measuring actual performance, comparing actual performance with established standards, and
modifying the marketing strategy, if needed.

Establishing Performance Standards
A performance standard is an expected level of performance against which actual perfor-
mance can be compared. A performance standard might be a 20 percent reduction in customer
complaints, a monthly sales quota of $ 150,000 , or a 10 percent increase per month in new-
customer accounts. Performance standards are derived from marketing objectives that are set
while developing the marketing strategy. By establishing marketing objectives, a firm indi-
cates what a marketing strategy is supposed to accomplish. Marketing objectives directly or
indirectly set forth performance standards, usually in terms of sales, costs, or communication
dimensions, such as brand awareness or product feature recall. Actual performance should be
measured in similar terms to facilitate comparisons.

Analyzing Actual Performance
The principle means by which a marketer can gauge whether a marketing strategy has been
effective in achieving objectives is by analyzing the actual performance of the marketing
strategy. Take, for example, the advertisement for Renova, a company that sells high-end
household paper products. While measuring the cost of this advertisement is not difficult,
evaluating the overall effectiveness of the marketing strategy can be complicated. In this
advertisement, you can see that the marketer has built in several mechanisms for attract-
ing consumer interest and tracking it. To start, the image in the advertisement is difficult to
interpret. The bright color and extreme close-up incites curiosity in the viewer because you
do not at first realize what it is (toilet paper), so you examine the image. Once the adver-
tisement has the viewer’s interest, it offers a couple of means of gaining more information,
namely the matrix barcode, which can be scanned with a smartphone, and the URL, where
strategic performance consumers without smartphones can go to shop for products. Once consumers have visited
evaluation Establishing the website, the company can track the volume of visitors and purchases. While still crude
performance standards, measures, these techniques are an improvement over previous technology and allow mar-
measuring actual performance, keters to get an approximate idea of the success of an advertisement. Generally speaking,
comparing actual performance
with established standards, technological advancements have made it easier for firms to analyze actual performance.
and modifying the marketing Another means of analyzing actual performance is by conducting customer research and
strategy, if needed surveys. In this section, we focus on two bases—sales and cost—for evaluating the actual
performance of marketing strategies.
performance standard An
expected level of performance
against which actual perfor- Sales Analysis
mance can be compared
sales analysis Analysis of Sales analysis uses sales figures to evaluate a firm’s current performance. It is a common
sales figures to evaluate a firm’s method of evaluation because sales data are readily available, at least in aggregate form, and
performance can reflect the target market’s reactions to a marketing mix. If sales spike after a particular

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