Page 139 - Marketing Management

116 PART 2 CAPTURING MARKETING INSIGHTS
Canada’s Servus Credit Union
used research to validate the
effects of the spokesperson for
its Young & Free Alberta
Spokester program. Kelsey
MacDonald, shown here, was
the 2010 contest winner.
Kelsey also attends events throughout Alberta where she interacts with the 17- to 25-year-old
crowd in order to better understand their financial needs. Research validated the campaign’s
success, with more than 107 million impressions to the program generated through various
forms of media and thousands of new accounts opened. 54
Marketing-Mix Modeling
Marketing accountability also means that marketers must more precisely estimate the effects
of different marketing investments. Marketing-mix models analyze data from a variety of
sources, such as retailer scanner data, company shipment data, pricing, media, and promo-
tion spending data, to understand more precisely the effects of specific marketing activities. 55
To deepen understanding, marketers can conduct multivariate analyses, such as regression
analysis, to sort through how each marketing element influences marketing outcomes such as
brand sales or market share. 56
Especially popular with packaged-goods marketers such as Procter & Gamble, Clorox, and
Colgate, the findings from marketing-mix modeling help allocate or reallocate expenditures.
Analyses explore which part of ad budgets are wasted, what optimal spending levels are, and
what minimum investment levels should be. 57
Although marketing-mix modeling helps to isolate effects, it is less effective at assessing how
different marketing elements work in combination. Wharton’s Dave Reibstein also notes three
other shortcomings: 58
• Marketing-mix modeling focuses on incremental growth instead of baseline sales or long-
term effects.
• The integration of important metrics such as customer satisfaction, awareness, and brand
equity into marketing-mix modeling is limited.
• Marketing-mix modeling generally fails to incorporate metrics related to competitors, the
trade, or the sales force (the average business spends far more on the sales force and trade pro-
motion than on advertising or consumer promotion).
Marketing Dashboards
Firms are also employing organizational processes and systems to make sure they maximize
the value of all these different metrics. Management can assemble a summary set of relevant
internal and external measures in a marketing dashboard for synthesis and interpretation.
Marketing dashboards are like the instrument panel in a car or plane, visually displaying real-
time indicators to ensure proper functioning. They are only as good as the information on
which they’re based, but sophisticated visualization tools are helping bring data alive to im-
prove understanding and analysis. 59
Some companies are also appointing marketing controllers to review budget items and
expenses. Increasingly, these controllers are using business intelligence software to create
digital versions of marketing dashboards that aggregate data from disparate internal and
external sources.
As input to the marketing dashboard, companies should include two key market-based score-
cards that reflect performance and provide possible early warning signals.
• A customer-performance scorecard records how well the company is doing year after year on
such customer-based measures as those shown in Table 4.4. Management should set target
goals for each measure and take action when results get out of bounds.
• A stakeholder-performance scorecard tracks the satisfaction of various constituencies who
have a critical interest in and impact on the company’s performance: employees, suppliers,
banks, distributors, retailers, and stockholders. Again, management should take action when
one or more groups register increased or above-norm levels of dissatisfaction. 60
Some executives worry that they’ll miss the big picture if they focus too much on a set of num-
bers on a dashboard. Some critics are concerned about privacy and the pressure the technique
places on employees. But most experts feel the rewards offset the risks. 61 “Marketing Insight:
Marketing Dashboards to Improve Effectiveness and Efficiency”provides practical advice about the
development of these marketing tools.