Transcript Marketing control process.

Marketing control process.
 What do we want to achieve?- Goal setting.
 What is happening?- performance
measurement.
 Why it is happening?- performance diagnosis.
 What should we do about it?- corrective action.

A.
I.
a.
Types of marketing control.
Annual plan control.
Sales analysis –
Consists of measuring and evaluating actual
sales in relation to sales goals.
Sales variance analysis –
Measures relative contribution of different
factors to gap in sales performance
Variance due to price decline = (1-0.80)(3000)
= 600 - 37.50
Variance due to volume decline = (1)(4000-3000) = 1000 - 62.50
1600 - 100
b.
Micro sales analysis.
II.
a.
b.
c.
Market share analysis.
Defining & measuring market share
Overall market share –
Company’s overall market share is it’s sales
expressed as a % of total market sales.
Served market share –
As a % of total sales to it’s served market.
Relative market share – To top three
competitor.
Company sales as % of combined sales of
three largest competitor.
 These conclusions from market share analysis
are subject to certain qualification.
o The assumption that outside forces affect all companies
in the same ways is often not true.
o That a company’s performance should be judged against
the average performance of all companies is not always
valid.
o If new firm enter the industry then existing firms market
share might fall.
o Sometimes market share decline is deliberately
engineered by a company to improve profits.
o Market share can fluctuate for many minor reasons.
 Managers must carefully interpret market share
by product line, customer type, regions & other
breakdowns.
 Four components of market share movements –
Overall
Market Share
= Customer X Customer X Customer X Price
Penetration
Loyalty
Selectivity Selectivity
 Customer Penetration.
It is the percentage of all customers who buy from this
company.
 Customer Loyalty.
It is the purchase from this company by it’s customer
expressed as a percentage of their total purchase from
all suppliers of the same product.
 Customer Selectivity.
It is the size of average customer purchase from
company expressed as a percentage of size of average
customer purchase from an average company.
 Price Selectivity.
It is the average price charged by this company
expressed as a percentage of the average price charged
by all companies.
III.
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Marketing expenses to sales analysis.
Sales force to sales – 15%
Advertising to sales – 5%
Sales promotion to sales – 6%
Market research to sales – 1%
Sales administration to sales – 3%
Upper control limit.
Desired level.
Lower control limit.
IV.

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Financial analysis.
Rate of return on net worth.
Profit margin.
Net profits
Net sales
Return on
assets
Asset Turnover
Financial
Leverage
X
Net Sales
Total assets
Net Profits
Total assets
Total assets
Net worth
Return on
net worth
=
Net profits
Net worth
V.
Customer Satisfaction Tracking.
B.
I.
a.
o
o
o
o
o
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Profitability Control.
Methodology of marketing profitability
analysis.
Identifying the functional expenses.
Selling – Advertising – Packaging – Delivery
– Billing – Collection.
Sales.
Cost of goods sold.
Gross Margin.
Expenses.
Salaries.
Rent.
Supplies.
Net Profit.
b.
III.
Assigning the functional expenses to the
marketing entities.
Preparing a profit & loss statement for each
marketing entity.
Determining the best corrective action.
Alternative action evaluation.
Direct v/s Full costing.
o
o
o
Direct cost.
Traceable common costs.
Non traceable common costs.
c.
II.
C.
I.
Efficiency Control.
Sales force efficiency.
o
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Average no. of sales calls per sales person per day.
Average sales call time per contact.
Average revenue per sales call.
Average cost per sales call.
Entertainment cost per sales call.
Percentage of orders per hundred sales call.
No. of new customers per period.
No. of loss customers per period.
Sales force cost as a percentage of total sales.
II.
Advertising efficiency.
o
Advertising cost per thousand target buyers reached
by media vehicle.
Percentage of audience who noted, saw, associated
& read most of each print advertisement.
Consumer opinion on the advertisement content &
effectiveness.
Before & after measurement of attitude towards the
product.
No. of enquiries stimulated by the advertisement.
Cost per enquiry.
o
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III.
Sales promotion efficiency.
o
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Percentage of sales sold on deal.
Display cost per sales dolor.
Percentage of coupons redeemed.
No. of enquiries resulting from demonstration.
IV.
Distribution efficiency.
o
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Inventory control.
Warehouse location.
Transportation modes.
D.
I.
Strategic control.
Marketing effectiveness rating review.
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Customer philosophy.
Integrated marketing organization.
Adequate marketing information.
Strategic orientation.
Operational efficiency.
 Marketing audit.
It is a comprehensive, systematic, independent
& periodic examination of company’s business
unit’s marketing environment, objectives,
strategies & activities with a view to determine
problems areas & opportunities &
recommending a plan of action to improve the
company’s marketing performance.
 Marketing audit procedure.
 Components of marketing audit.
1. Marketing environment audit.
Macro environment.
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Demographic.
Economic.
Ecological.
Technological.
Political.
Cultural
Task environment
o
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Markets.
Customers.
Competitors.
Distribution & dealers.
Suppliers.
Facilitators & marketing firms.
Publics.
2.
Marketing strategy audit.
o
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Business mission.
Strategy.
Marketing objectives & goals.
3. Marketing organization audit.
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Formal structure.
Functional efficiency.
Interface efficiency.
4. Marketing system audit.
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Marketing information system.
Marketing planning system.
Marketing controlling system.
New product development system.
5. Marketing productivity audit.
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Profitability analysis.
Cost effectiveness analysis.
6. Marketing function audit.
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Product.
Price.
Distribution.
Advertising sales promotion publicity.
Sales force.

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Marketing excellence review.
Company ethical & social responsibility review.