Marketing

control
Prof. PUTTU GURU PRASAD
FACULTY MEMBER
INC GUNTUR
pgp4149@gmail.com
 Two aspects
 Milan Kundera, the famous Czech
novelist, playwright, and poet, said,
“business has only two functions
– marketing and innovation”
 The two aspects which are very
important for any organizational
function are: strategy and
execution.
 Marketing control deals with
execution of marketing strategies
and checking whether the
 Types of Marketing
Control
 Strategic control
 Annual plan control

 Profitability control

 Efficiency and effectiveness

control
 Strategic controls
 Schreyogg and Steinmann define
strategic control as “ the critical
evaluation of plans, activities, and
results , thereby providing
information for future action”
 According to John F. Preble , strategic
control has four components:
premise control, implementation
control, strategic surveillance, and
special alert control
 Annual plan control
 Projected values of sales volume,
market share, and profits are some
of the typical performance standards
under this type of control.
 Two important techniques used for
tracking results and comparing them
with the standards are variance
analysis and marketing expenses-to-
sales analysis
 Profitability control
 The strategic profit model is a useful
technique for profitability control, i.e. the
financial performance in terms of profits
and return on investment.
 The two other tools are the segment
margin report that generates separate
income statement from each customer
segment or product line, and the activity
based costing (ABC) system that is used to
analyze the whole marketing efforts by
analyzing the marketing function based on
different activities
Efficiency and effectiveness
control
 Customer satisfaction is one measure of
effectiveness in selling. Conducting
customer satisfaction surveys, tracking
customer attitudes, and analyzing customer
feedback are some of the activates that
help to assess the marketing effectiveness.
 Efficiency control is used to increase
productivity in marketing activities. It focus
on the sales volume, sales generated by
salesperson, number of accounts handled
by each sales person, etc.
 Marketing Audit
 External and internal audits
 Effective marketing audit
 Conducting a marketing audit
 Sales control
 Sales budgets
 Sales quotas
 Sales and cost analysis
 Sales reporting
 Reports from the sales force
 Reports from the sales management
 Sales force compensation and
incentive system
 Sales force management audit
 Credit control
 Receivables management
 Credit rating
 Credit policy
 Credit period
 Discounts and rebates
 Distribution control
 Channel integration
 Vertical marketing systems
 Horizontal marketing systems
 Channel management
 Evaluation of channel performance
 Evaluation of micro-level
performance
 Channel conflict management
 Distribution control
 The distribution function ensures that the
products of the organization reach the
markets. The distribution channel consists
of the manufactures, intermediaries and
end users. The distribution channels can
be controlled in different ways
 One method is through channel integration
and another is through channel
management. Evaluating the channel
performance is another control mechanism
in the distribution function
 Channel integration
 It involves cooperation from the
various channel members. These
include maintaining minimum
inventory levels, improving mutual
relation ships among channel
members, reducing transaction
costs, helping organization to
manage the skill and resources
better, and enabling organizations to
develop a competitive advantage
 Vertical Marketing
Systems
 There are two ways in which channel
integration can be achieved.
 A vertical marketing system is a common
model of channel integration in which one
of the channel members owns the channel
or exerts substantial influence or control
over the activates of the members along
the channel. A VMS consists of
manufacturers, distributor, and retailer
pooling their individual strengths together
to achieve operating economies or a
competitive advantage.
 Companies like Kentucky fried chicken
(KFC) have successfully streamlined
production, distribution, and retailing into
a single efficient system to succeed in the
 Types of VMS
 Corporate VMS:- many petroleum refining
companies, which have company owned,
company-operated retail outlets, have this
type of VMS.
 Administered VMS:- retailers like Marks
and Spencer, which have a strong hold on
small suppliers, use this kind of VMS
 Contractual VMS:- an example of this type
of VMS is seen in McDonald’s, which is the
channel leader for its franchises
 Horizontal Marketing
Systems
 It is an arrangement with in a
distribution channel in which two or
more organization at the same
channel level work towards a
common goal. Horizontal
arrangements have been successful
in hospital supply distribution and
the pharmaceutical and retiling
segments. This type of arrangement
generally formed at the R&D level for
new product development or the at
the wholesalers or retailer level for
 Channel Management
 Efficient channel management helps
organization to reduce cost , reach
potential customers , and make profits. A
number of steps involved in managing the
channels efficiently.
 First, the organization has to recruit and
select the right channel members.
 Second , it has to focus on motivating
channel members and increasing
profitability.
 Third , it has to periodically evaluate the
performance of channel members to
ensure that they remain competitive in the
market.
 Fourth, based on market changes , it
 Evaluation of channel
performance
 It is evaluated at both at the macro level
and at micro level
 Channel efficiency is a channel
performance dimension that judges the
ability of intermediaries to undertake
necessary channel function by incurring
minimal cost.
 Channel effectiveness is another
dimension that measures channel
performance and considers its ability to
satisfy the customer needs. It focuses on
issues like lot size, delivery time, location
convenience, and assortment breadth.
 Channel equity refers to the distribution of
opportunities available to all customers in
Channel conflict management
 Channel conflicts can arise from either
structural causes or attitudinal causes.
Faulty channel design is probably the most
important cause of channel conflicts. Goal
divergence or goal incompatibility among
channel members is another important
cause.
 Conflicts can also arise from clashes over
domains, the domain clashes may be in
terms of range or products handled ,
coverage of territory or customer
segment, and responsibilities for
performing different channel function .
 The difference in attitudes and perceptions
among channel members are another key
source of channel conflicts. Unexpected
changes in the competitive environment ,
 Conflict Resolutions
Strategies
 Efficient cooperation and
coordination among channel
members can help prevent channel
conflicts, and resolve them when
they arise. The commonly used
conflict resolution strategies are
negotiations, and bargaining ,
problem solving strategies ,
persuasion, political strategies and
co-optation.
 Marketing communication
control
 Advertising
 Sales promotion
 Direct marketing
 Public relations
 Marketing communication
control
 To market a product successfully , it is not
enough to ensure that it is the right
product , available at the right place at the
right time; information about its
availability, utility, and price must also be
effectively communicated to prospective
buyers.
 Although this may sound simple, in a
competitive environment with increasing
similar products and services, proliferation
of media options, and complexity in
segmenting audiences, it is very difficult to
 Advertising
 Advertising can be defined as a paid
form of communication in various
media used to convey information
about products or services in a way
that can persuade people to make a
purchase.
 The common forms of
advertisements are newspapers ads,
magazine ads, television ads, radio
ads, hoardings , and online ads.
 Measuring advertising
effectiveness
 A commonly used method for
measuring effectiveness of the
advertisement is copy testing or
message testing. (pre & post tests)
 The effectiveness of advertisement
can also measured by monitoring the
following parameters: recognition,
recall, persuasion , purchase
behavior
 Marketing control in
Branding
 Brand equity and brand
measurement
 Brand portfolio management
 Brand audit
 Marketing control in
branding
 A brand is the proprietary, visual,
emotional , rational , and cultural
image that one associates with an
organization or a product. It is always
associated with a communication
message, which it communicate to
the consumers.
 It is this communication that binds
the consumers in some psychological
aspects to a brand , thus enhancing
the brand image , brand personality
 Brand equity
 It denotes the value of the brand to
the customer and the organization.
Organization try to leverage the
equity of an established brand to
enter other categories of products.
Brand equity not only creates a
positive brand image but also drives
demand because customers are
often attracted towards a brand with
better brand equity. Brand equity
can be understood in terms of three
under lying concepts, brand assets,
 Brand measurement
 It used to evaluate the brand equity
of a brand. It helps in integrating the
brand with the organizational
performance. It can be conducted
through different types of
measurements, perception
measurement , performance
measurement, and financial
measurement
 Brand portfolio
management
 It includes all the brands that are
managed by an organization .
Generally , it is seen that less than
20% of the brands in the brand
portfolio contribute to the
organization profits.
 For example as of 1996, Nestlé had a
portfolio of 8,000 brands of which
only 200, that is 2.5 percent of the
brand portfolio, contributed to the
 Brand audit
 All the brands in the portfolio should
be reviewed in terms of their
respective market shares, their
percentage contribution to the yearly
sales and profits, and their
positioning in the market.
 The brands which are not ranked
high are the once that have to be
removed from the portfolio through
merge, sell, milk, and kill.
 Information systems for
marketing control
 Marketing decision support system
 Marketing intelligence
 Sales force automation
Marketing decision support
system
 The MDSS is a set of decision models
with supporting hardware and
software made available to
marketing managers to assist them
in analyzing relevant business data
and making better marketing
decisions.
 MDSS detects the performance of the
marketing function and its various
sub-functions and tracks down any
 Marketing intelligence
 Marketing intelligence systems help
mangers monitor the performance of
their sales force and assess the
contribution of the marketing
function to the organization's profits.
 It involves collecting information
through human, electronic, or other
means and analyzing the information
with respect to both the internal and
external environment.
 Sales force automation
 Sales force automation brings about
standardization in the way the business is
done. It may help in preventing the sales
force from giving unwarranted and
unacceptable discounts to customers.
 It increases the interaction between
mangers and sales force
 It encourages the responsibility of the
sales force for their actions
 It also helps the sales force by allowing
them to voice their questions and
concerns easily and to get answers faster.