Measuring Marketing

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

Table of Contents

Acknowledgement2

Executive summary4

Aims & Objectives5

Literature Review8

Conclusion64

Recommendations72

References73

Appendix100

Executive summary

The purpose of the dissertation is to discuss the measurement marketing in a holistic context. Measuring marketing performance has always been a challenge due to our inability to fathom which metrics are meaningful. This paper focuses on advising certain strategies to medium and large size clients regarding measuring marketing. We now have the ability to capture data elements from almost every stage of the persuasion process from awareness to satisfaction. As a result, we face a flood of data, making the identification of meaningful data overwhelming. Key performance indicators for marketing vary according to specific areas of responsibility. In recent years there has been a drive within both industry and academia to provide suitable measures that can be employed in evaluating the “value-added” of, especially, the functional specialists within the firm. Accounting measures that may have worked in the industrial age are no longer uniquely capable of measuring performance in the post-industrial epoch. In addition, functional business areas that have proven particularly resistant to measurement are more so being called to account. One of these areas is marketing, with increasing calls made by senior executives regarding the need to measure the return on investment in marketing.

Aims & Objectives

Acknowledges that SMEs (small to medium-sized enterprises) cannot do conventional marketing because of the limitations of resources which are inherent to all SMEs and also because SME owner/managers behave and think differently from conventional marketing decision-making practices in large companies. In this context the discussion focuses on SME characteristics and how these impact upon marketing characteristics within SMEs.

Marketing has had limited input into strategy formulation (Srivastava, Shervani, & Fahey, 1998), and one of the reasons for this has been the inability of marketers to identify and measure the value that they bring to the firm. Marketers have blamed themselves for not linking marketing to quantifiable financial outcomes. The magnitude of this problem is such that the Marketing Science Institute made assessing marketing productivity (return on marketing) and marketing metrics the top research priority in 2002, 2004 and 2006. This is significant because the MSI serves as a bridge between the academic and practitioner communities in marketing. Also, the Journal of Marketing devoted an entire issue to measurement of marketing productivity in 2004.

The response from academics has differed with regard to how to approach the challenge of measurement. Some researchers followed the track of fortifying the present accounting measures that are being used. Chief among these approaches has been the economic value added (EVA) (Stewart, 1993), a perspective that goes beyond simple accounting measures and considers expenditures as investments that should be evaluated in line with the return on the investment. Other researchers have taken a different approach and attempted to formulate non-accounting metrics that can be used in conjunction with the already available accounting and financial ...