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MARKETING CONTROL SYSTEM

Marketing Marketing Control System:Control System:The problems encountered in control are usually as a result of an inadequate monitoring system, or the reluctance of some of the designers of the plan to face up to early problems, choosing to continue in the hope that the plan will be successful

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● Pressures external to an organisation: Pressures external to an organisation: This emphasises the importance of categorising these PESTLE factors and carrying out an effective risk analysis.

● Pressures on the marketing function from Pressures on the marketing function from within an organisation: within an organisation: Far too many plans do not take into account the prevailing organisational culture. It is unrealistic to design a consumer-focused marketing strategy without considering an organisation’s ability to deliver on its promise. Some organisations will have an existing structure that is simply not designed to be able to deliver the proposed marketing strategy as is intended

● Pressures within the marketing function: Pressures within the marketing function: It is often assumed that a marketing department is able to implement the activities as set out in the marketing plan. This can be a problem when organisations are planning toexpand their business, but haven’t considered how the marketing department will carry this out.

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Understanding Effectiveness of company’s Marketing Strategy

EFFECTIVENESS

Need to include the following assessments in marketing audit:Need to include the following assessments in marketing audit:1) 1) The The marketing environment marketing environment assesses customers, competitors, distribution assesses customers, competitors, distribution networks and other external influences that may affect an organisation)networks and other external influences that may affect an organisation)

2)2) The marketing strategy needs to be assessed on the The marketing strategy needs to be assessed on the extent to which itextent to which itsuccessfully builds upon an organisation’s opportunities and addresses successfully builds upon an organisation’s opportunities and addresses its threats.its threats.

3)3) How effective is the marketing department in working with and How effective is the marketing department in working with and coordinating with other departmentscoordinating with other departments, especially the sales department? For, especially the sales department? Forexample, does marketing communicate with finance to negotiate easierexample, does marketing communicate with finance to negotiate easierfinance for consumers to access, to help them purchase the organisation’s finance for consumers to access, to help them purchase the organisation’s products?products?

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Understanding Effectiveness of company’s Marketing Strategy (Cont’d)

EFFECTIVENESS (CONT’D)

Need to include the following assessments:Need to include the following assessments:4) 4) How effective are the How effective are the marketing systems marketing systems in accessing, gathering, in accessing, gathering, analysing and disseminating marketing data? For example, if consumer analysing and disseminating marketing data? For example, if consumer complaints go up, is the marketing system able to identify these complaints go up, is the marketing system able to identify these complaints, then analyse them and report back to the relevant departments complaints, then analyse them and report back to the relevant departments about the cause of these complaints and support them in making about the cause of these complaints and support them in making decisions to correct thesituation?decisions to correct thesituation?

5)5) Marketing productivity must be assessed using Marketing productivity must be assessed using accounting tools to accounting tools to measure the performance of marketing techniquesmeasure the performance of marketing techniques, such as return on , such as return on investment.investment.

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Organisations need to be efficiency as well

EFFICIENCY

The greater the outputs in comparison to inputs, the greater the efficiency The greater the outputs in comparison to inputs, the greater the efficiency of the organisationof the organisation

● Marketing inputs: marketing expenses, number of employees and investments made by an organisation to achieve marketing and organisational objectives

● Marketing outputs: Marketing outputs: profits, sales (both in terms of units sold and value) and cash flow

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Objectives need to be SMART

1. Financial Control

Financial controls can include:

● Profitability of each product rangeProfitability of each product range

● Customer Profitability Customer Profitability (which customers generate the most profit or not, allowing an organisation to allocate its time and resources accordingly).

● Revenue growth Revenue growth (which revenue sources are increasing or not, allowing anorganisation to take corrective action). – next part is pg 134

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Sales Analysis Measures

1. Financial Control (Cont’d)

Sales analysis measures:

● Sales Transaction Analysis Sales Transaction Analysis (e.g. sales record in terms of sales volume; product type; geographical area, etc)

● Cash Volume Sales Analysis Cash Volume Sales Analysis (total financial value of sales to assesscosts, profits and sales levels)

● Market Share Analysis Market Share Analysis (compares its market share to its competitors)

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Marketing Cost Analysis

1. Financial Control (Cont’d)

Marketing costs analysis :

● Natural accounts analysis Natural accounts analysis (e.g. financial records toidentify costs)

● Functional accounts analysis Functional accounts analysis (e.g. specific marketing functions, such as sales pro motion cost)

● Product, geographic area or customer analysis Product, geographic area or customer analysis (assess where it is currently maximising its profits, market growth or losses) next part 135

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2. Performance Control Performance controls aim to assess th extent to which

non-financial objectives are met by the marketing strategy

● Ethical evaluation Ethical evaluation (such as reducing its carbon footprint, ensuring allits suppliers pay a fair wage to its employees, and so on)

● Legal evaluation Legal evaluation (its marketing strategy adheres to both national and international law)

● Advertising evaluation Advertising evaluation (how effective it has been in contributing toand achieving the objectives specified in an organistion’s marketing strategy)

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Segmentation and positioning objectives will act as an early indicator on the extent to which the marketing objectives are being achieved

3. Strategic Marketing Control The aim of marketing strategy is to contribute towards

achieving an organisation’s corporate objectives

Marketing strategy aims to achieve this through:

● Segmentation Segmentation

● Targeting Targeting

● Positioning Positioning

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4 Stages in forecasting:

● Understand the presentUnderstand the present. (This could include secondary research, such as sales figures and

customer retention rates, as well as primary research, such as potential customer buying intentions.)

● Understand the environment Understand the environment (an organisation will attempt to identify what opportunities and threats are likely to emerge over the coming 12 months)

3 objectives: 3 objectives: ■ Any environmental analysis should provide information about any existing or potential changes in the environment.■ The environmental analysis should allow managers to have sufficient information to assist them in decision making.■ This process should encourage and allow for strategic decisions and thinking to occur within an organisation

● Establish the forecast: Establish the forecast: (calculate and present the forecasts to the relevant departments)

● Monitor the forecasts: Monitor the forecasts: (Over a specified period of time, note any variation from the forecast

and, if significant enough, undertake further analysis)

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Setting Sales Target

1. Establish the current conversion rate for sales 1. Establish the current conversion rate for sales (need to visit four

clients in order to get one sale then they have a conversion rate of 25%)

2. Establish how many prospects the organisation’s sales Establish how many prospects the organisation’s sales force is capable of visiting in a weekforce is capable of visiting in a week

3. Calculate how many calls need to be made, or how 3. Calculate how many calls need to be made, or how many pieces of information need to be sent out, in order many pieces of information need to be sent out, in order to get a response for the sales team to follow upto get a response for the sales team to follow up

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Setting Sales Target (Cont’d)

4. Ask the client to state how many new sales they need 4. Ask the client to state how many new sales they need in the next yearin the next year

5. Calculate how many people they will need to see in Calculate how many people they will need to see in order to achieve their desired sales target.order to achieve their desired sales target.

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A budget must allocate resources to ensure theA budget must allocate resources to ensure theorganisation achieves its marketing objectives. organisation achieves its marketing objectives.

This should include costs related to:This should include costs related to:

● implementing the marketing strategyimplementing the marketing strategy● advertising costsadvertising costs● sales force trainingsales force training ● development of distribution channels, and so on.development of distribution channels, and so on.