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Strategies for Measuring Marketing

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“Conviction is the luxury of those sitting on the sidelines. For those of us who choose to play rather than watch, measurement is the compass that guides us through our mistakes.”

Famous dialogue of movie A Beautiful Mind


Business world has become very dynamic in current times. Technological advances are bringing changes in lifestyle of customers. It has generated necessity for introduction of new products in market or drastic changes in existing products so as to meet changing customer needs. It has made job of marketing department more challenging. Assessing customer needs, preferences, satisfaction and expectation level are few important domain, which marketing people has to handle at one hand. Whereas at the other hand, positioning product in market for particular customer segment and launching marketing scheme so as to enhance market share and profitability is other main area of working for marketing professionals. These twin tasks are very much essential for success of any business organization. There are other divisions also in almost every business unit like procurement, production, sales and marketing etc. Each one of these division contribute in making organization run profitability so as to meet the ultimate aim of establishing business i.e. maximizing profit of shareholders. Often there are discussions about contribution of individual departments in making organization successful and resources allotted to respective departments. Though, each and every department has its unique role to play in growth of business, few walk away with greater share of budget allocation while others have to manage their operations with lesser budgetary allocation. It has necessitated that work performance of each division should be measured in terms of revenue generation contribution. It will make budgetary allocation decision on more professional lines. It will also help individual divisions in measuring performance of various schemes and programs internally.

It has been often observed that different work divisions allege for greater budget allocation to marketing division without rational but just on tall claims. Generally marketing professionals come to meetings without facts & s and try to describe their achievements qualitatively. But finance division insists for factual position and achievement in terms of some well defined variable linking performance to financials. Though, marketing professionals have been found resisting this demand of finance professionals in general. But is has made a impact on general board room environment where marketing professionals are asked to bring in more credible feedback about their performance. But performance of marketing efforts cannot be measured simply as is the case of production or sales, where it is easy to make out every evening. So there is a need to first establish a performance metric for marketing, which may vary from one type of business to another type of business. But it is for sure that, once metric is established and performance evaluation for marketing starts, it will bring in more transparency, credibility, accountability and efficiency in marketing department operations. Each marketing efforts cost a lot in terms of manpower engaged and finances. A single slot of just few seconds in TV channel may cost thousands of dollars. So if company gets evaluation of its impact on sales, it may streamline its spending on it. Besides that few expensive media campaigns may be cut short or diverted so as to bring desired outcomes.

A drastic shift in Coca Cola advertisement campaign to shift from costly family entertainment channel to some sport, movie and adventure channel was a result of one such marketing measurement campaign, which not only helped in saving lot of money, but gave better results also in terms of revenue generation. These measures help company in making budgetary allocations more professional and transparent, but are opposed by marketing professionals. It happens as they are made more accountable for expenditure. It necessitates involvement of change management professional also in the whole process. It has been observed that gradual changes supported with workshops and training programs are more likely to succeed then swift changes for marketing management adoption. Benefits of marketing measurement are immense, most prominent being smart use of scarce human& financial resources. These can be deployed on schemes giving best returns rather than schemes of marginal success. It also helps in reviewing performance of schemes at regular intervals and takes corrective action if required.

So we find that marketing measurement is not only trend for present day business, but a necessity to make business more dynamic, result oriented and efficient. It helps in bringing in better coordination among various divisions so as to achieve business target of making organization more profitable.


Gone are the days of stable and predictable business environment. Business world has become very dynamic with new technology playing greater role in our lives. (Kristy Sheppard .2009. Diversify your business to defy the downturn) World has turned in to a village, with the spread of internet and other related information technology far and wide in every part of the world. Communication and transportation is becoming easy and economic day by day. (Data monitor. 2009).It has opened new challenges and opportunities for the businesses all over the world. Companies are facing enhanced level of competition on account of newer options available to customers from other new entrants in market. At the same time companies are getting new opportunities in the form of newer markets. But either it is taking up competition with new entrants or approaching new markets, working of marketing professionals become of utmost importance. (James Walsh. 2009). What is the competitive position of company products with respect to rival companies, need to be analyzed so as to retain and increase present share. At the same time demography of new markets, customer needs and preferences also need to be investigated in details so as to bring in new products suiting customer needs in newer markets. It requires resources in terms of finances and manpower to be deployed so as to bring in positive outcomes out of whole marketing efforts. It is after some initial deliberation on the prevailing issues that funds are allotted so as to launch marketing campaigns in new markets and existing ones. But it can happen only in starting that funds can be allotted with a rough estimate reached on account of judgmental forecasting. But as time proceeds, it is desired that outcomes of previous and current expenditure is measured, before demand of more funds is put forward. It has been observed that divisions of work like sales, production, human resources and procurement etc. comes out with facts and s about performance outcomes leaving marketing division alone which depends solely on qualitative statements about their performance (Michelle 2005). Here comes the issue of measuring performance of marketing division functioning. Decisions regarding budgetary allocation to various business divisions must be very professional. Especially budgetary support to various marketing campaigns must be extended after getting the effectiveness measured in clear financial outcomes of these. In no case allocation should be extended on the basis of only qualitative explanation, tall claims not supported by any real time performance measurement. There is a need to not only measure performance, but it is also required that this measurement must be in terms of such variables, which can link up performance to financials.

Operations of Coca Cola in Indian Territory are running in loss on account of smaller sales volume. To boost sales, company launched advertisement campaigns on prime entertainment TV channels. For months, these campaigns continued but sales did not pick up. It was only after few months that a survey was conducted to find out impact of these advertising campaigns. To shock of everybody in company, it came to notice, that actual consumer of Coca Cola, the youngsters, watch movie, sports and adventure channel more and les the news or family entertainment channels. It emphasizes the need of marketing measurement at regular intervals. If company were using marketing measurement at regular interval, this major drawback would have been detected at much earlier stage of campaign. Corrective steps at that stage would have resulted in saving lot of funds and streamlining marketing efforts so as to result in achieving required targets.

Competition is increasing day by day and margins are shrinking, depleting finances in almost every business (Boston Consulting Group. Nov 2007). . As a result availability of funds has come down and there is emphasis on smart use of resources. In such a scenario, it becomes of utmost importance, that funds are used where they are not only needed most but are most productive also. It warrants that the mysterious world of marketing be mapped very carefully, schemes & programs launched evaluated very systematically and free judgment be taken with rational so as to continue, strengthen or cut short designated programs. This will not only help in making smart use of resources, but also weed out less productive schemes and programs.

Rudy Gulianui, former mayor of the Newyork, once said that whatever operations may be, if we do not measure, we cannot manage. Though his comments were more focused towards civic services, but these are equally applicable in business world. Management prime function is to control and direct the organization in right direction. But unless management gets feedback about various business activities I the form of performance evaluation, how can we expect them to give right direction as desired. So all these instances shows that measuring marketing is an essential activity which brings objectivity in functioning of marketing department but also prudent decision making of management.


In everyday life, we see that that all the activities are directed towards some specific objectives. If we look at school children, performance of these is measured by way of examination at regular intervals. Performance of teachers are also measured by the way of results achieved so. Either it is civic authorities, policeman controlling traffic or the house keeping staff of the office, performance of everybody is measured and money spent of their functioning is accounted for. Then why the performance of the marketing professionals should not be put to measurement. There are efforts to determine economic order quantity for procurement department, machine utilization parameters in production floors as well as sales volume generated per sales personnel, then why should the marketing professionals not justify the funds spent in their operations and results achieved out of it. Once measuring marketing mechanism is put in place, it will clearly bring objectivity in the functioning of marketing professionals and enhance level of accountability for them.

Minimizing risk in the business operations is very important. But unless we generate expected results of various marketing activities, we may not be in a position to mark, various marketing activities on the basis of their expected returns (Tim Riesterer 1999). Once we start measuring output of various marketing moves, marketing vehicles and channels, it helps us in assessing the real output of each one. This way, it becomes comparatively lesser risky in starting new moves, as we are already aware of previous output of various constituent elements of a particular scheme to be launched. In measuring marketing mechanism, performance of various schemes is measured on continuous basis helping in controlling, modifying and changing course of action for various schemes. This way, it becomes easy to continuously monitor performance of select schemes and drop the programs not performing up to the mark and proving to be costly as compared to other schemes giving better returns.

There remains divergent view all the time, in all possible areas of operations, if standards are not set so as to measure performance. It applies to marketing as well. If standards are not set, it will let senior level marketing professionals to look for many flimsy and personally convincing excuses to be put forward, as explanation for lesser impact of marketing programs. There are also chances that outcomes of various marketing schemes are mixed so as to show success of few programs for others also, where as not to indicate real poor performance for others. Measuring marketing mechanism let every scheme be monitored for real output of the concerned scheme only. It gives factual success rate of each and every marketing program in transparent way. Measuring marketing moves also reduces the chances of performance being misrepresented in terms other than those which represent true one. Once metric are decided for each specific type of program, it becomes less probable, that performance can be misrepresented.

Once proper measurement takes place for each and every marketing initiative, it becomes more satisfying for the leadership as far as resource allocation and its utilization is concerned. (Demand Metric.2009.Measuring marketing governance maturity). Leadership takes decision regarding budgetary provisions on various facts and s generated out of measuring marketing campaigns. It also helps in midterm review of various marketing programs, especially those which are costly and whose success if critical for the growth of the organization. In today's business scenario, when business is so dynamic and competition so stiff, it is not possible for the companies to wait for long to get results of marketing moves. In such case, measuring marketing helps companies in evaluating the performance on continuous basis and taking corrective measures as and when required without waiting till the end of the marketing programs. It not only helps company in acquiring competitive edge over other rivals, but in making smart use of resources.

Surveys conducted recently by various research bodies have found that companies practicing measuring marketing moves remain confident and clear about their budgetary allocations at various point of time. Their financial decisions remain more prudent and productive as compared to companies not adopting measuring marketing moves. It is also found that marketing operations became more transparent in due course of time since adoption of measuring marketing techniques.

Surveys have also pointed out that top leadership became more confident and positive about their marketing division as every investment made is accounted for. Top leadership also feels confident that metrics chosen so gives performance of marketing team in terms of revenue parameters, which help top management in taking decision regarding investment more rationally without getting entangled in technicalities of marketing.


There are basically three schools of thought for measuring marketing concept. Fist one focuses on return on investment, where as second one focuses on brand equity being created out of adverting campaigns. The third and last one is the concept of considering customer information as asset. In the first school of thought investment in marketing is considered just like any other investment. How much return a marketing campaign will give justifies the investment made there. There is no long term gains considered here in this school of thought. There is very plain relationship of investment and return in particular campaign itself. No looking beyond the life of particularly targeted marketing move. Generating brand value or establishing a brand is not the concept over here. Measurement remains focused on just the return a particular campaign makes. Developing measuring marketing metric is most easy in this type of school of thought as performance has to be evaluated in terms of incremental revenue for every investment made in the marketing efforts.

In the second school of thought, brand value has been given the prime focus. Here prime target of the marketing is considered as creating brand value and further value addition to it. It generally happens with the fast moving consumer goods companies that brands are established more prominently rather than anything else including products itself. Here products keep on changing over period of time as per consumer preferences and life style but brand remains the same. Here focus of marketing campaign remains on establishing brand value, which remains there for longer period of time, though the products may keep on changing. Developing measuring marketing metric is most difficult task in this domain. There is no consensus among industry experts as to what are the parameters, which help measure performance of marketing campaigns in the area of brand management. Otherwise also, brands value is not created for certain short period only. It is a long term process to create a brand which benefits company over life time of the business.

Third school of thought for measuring marketing is of consumer equity school. Here focus of the marketing activities remain on generating loyalty of the customer towards company by way of exploring consumer details and customizing services suitable to him. Telecom services and financial services are the most glaring example of this school of thought. Here focus remains on generating information of the customer so as the products can be customized to his needs. It is the information of the customer which helps in retaining him or enabling company in cross selling other allied products to customer. Developing measuring marketing metrics in this domain is comparatively easy as compared to brand equity school, but a bit tougher to return on investment school of measuring marketing concept. Brand equity school of thought proves to be most difficult challenge in developing measuring marketing campaigns. Though in present times, this school of thought has got limited applicability, but in coming years, it is expected to gain not only popularity but enhanced level of applicability on account of increasing domain of customer centric services.


Whenever the issue of measuring marketing is raised and efforts are initiated so as to measure performance of the marketing programs, the most likely answer which comes is the focus being on creating brand and enhancing brand value. Measuring brand value, which is a part of the measuring marketing exercise, is not the job of marketing division, is the way, marketing people comes out generally. It is true also to some extent. Ultimately conducting surveys are not easy and is a reasonably costly affair. So companies, and especially marketing divisions, already in financial stress to meet the expenditure of currently running programs, try to avoid measuring marketing. It is true that measuring marketing do involves the process of survey and then finding out the enhancement in the value of brand as a result of marketing campaign. But dilemma here comes for spending fist to bring in efficiency, which may come for saving later. This dilemma f faced more in medium size companies where investment in marketing campaign is not huge, and conducting surveys to measure performance of marketing initiatives may cost a certain noticeable percentage of total budgetary provisions of marketing department as a whole. In case of smaller companies, measuring brand values through surveys or other applicable techniques may even cost re than creating it. As smaller companies have limited market, so while creating brand they look for targeted markets only. This allows them to create effective brand for themselves in limited market space and in particular segment to create brand in lesser cost. But if the go for measuring its effectiveness, the budget required may go well beyond original allotted for creating and establishing brand.

There are many instances, when company do not benefit by being there, such as trade fairs and exhibitions etc. Company does not get many business leads from few of these exhibitions which may not be very focused or targeted. But even then, general business environment warrants, company presence in these exhibitions, so as to negate any possible rumors about company performance or financial health of company. These are few instances, where company has to invest in marketing moves, even if it knows that not much of return is there by going ahead with these marketing moves. All these exercises do cost company and expenses falls under the head of marketing division only, though the purpose served may be in larger interest of the company itself not the marketing side of the company only. So care, must be taken while putting in measuring marketing mechanism in place, so that these do not discourage some activities, which may not be translating in revenues in immediate times but are for larger interest of the organization.

It is also a fact that in exhibitions, though company may bit get buying leads in immediate future, but it helps in generating profile of the prospective customers in near future. How many people are visiting company exhibition stall, of what age group and with what income level are some crucial questions about demography, which can be answered by collecting data over here. Processing of this data and subsequent business intelligence developed helps marketing division in taking strategic moves, which may be of crucial business importance. So though these exhibitions may not be turning in to revenue generation, but proves to be of utility in other way for marketing people. Measuring marketing mechanism may rate these activities as low profile as these are not directly related to revenue generation but are oriented for long term planning and strategy. So there is a need to take care for this situation, while developing measuring marketing metrics in organization.

It is often argued that not many people respond to the e-mails sent to them asking their feedback about marketing related areas. But the point here is that it does not cost heavy to do online marketing related survey. Besides that a lot many people can be sent e-mails at comparatively less cost. Out of this, if even a fraction of people respond to e-mail campaign, it gives fair idea about the opinion of concerned people. If care is taken is selecting the sample frame carefully, it can lead to generation of very useful information for the further marketing programs. Here stress should be that sampling of the whole sampling population should be done with care that statistical parameters are satisfied so as to give accurate representation of target market.

Another area of dilemma comes from business analysts' side. It is for sure and well established that business analyst do affect the fortunes of company to some extent. They also help leave their impact on some high profile clients, who may be of importance for the company. But main issue raised here is that, it may not happen in immediate time, that analyst meet effect the business. Sometimes it also becomes difficult that which client has been referred by business analyst at at what point of time. So it makes more difficult to measure the net impact of business analyst meet. So there comes a stage of dilemma for marketing professionals, as to what extent these meets are successful in affecting business of company and in turn the growth of revenue.

We find that in all these cases, company faces a situation of dilemma so as to either adopt the measuring marketing for above mentioned situation or go ahead with traditionally accepted norms & practices. But it has been argued all the time by measuring marketing people that measuring or generating some estimate is always better than not to have even a rough estimate of impact, which marketing programs leaves behind. Measuring marketing opens a scope where a selection among the various marketing options can be made more rationally & logically based upon facts & s rather than just on the views of professionals. It also opens scope for midterm review of expensive marketing campaigns and related corrective actions, which can be taken to avoid big failures or less impressive results at last. Measuring marketing mechanism just ensures lightning up the mysterious world of marketing and its impact on company's fortune.


There are various parameters to measure the effectiveness of the marketing programs. One of the most important parameters which show the performance of marketing programs is sales and resultant revenue generated out of it. Prime target of any business establishment is to generate profits, which is possible only when sales are there. Net result of marketing campaigns should come in the form of sales. This is one of the most important parameter to measure effectiveness of marketing programs in immediate future. Other important parameter is generation of leads for sales to take place. It may be that products of company are not very much competitive, cost wise and value these offer to consumer. But if a marketing campaign is able to generate quality leads, we can safely say that marketing campaign is serving the basic purpose for which it was launched. But sales leads so generated must be of potential that if followed seriously then can be converted to actual sales. Especially the exhibitions, workshops and seminars are the events , performance of which can be measured effectively by way of focusing on the leads generated so. Sometimes we find that company has very specific business objectives to be served. In such cases to measure performance of marketing operations, specific parameters related to these objectives are taken in to consideration while developing metrics. But one almost universal goal for any business organization is to get returns of the investment made in it. So, one very objective measurement for performance can be finding out return on the investment made on marketing programs. There have also been seen that out of some mass media campaign, there comes lot of leads for products and services offered by company. But how many of these leads actually get converted to sales reflect, the performance of marketing team. It is also true for business ventures that it is not the volume of total profit, but in essence the profitability of organization, which matters most. Smart investment is the most sought after feature of today business world. So is the marketing efforts resulted in enhancing profitability of organization as a whole, is one such parameter for measuring performance and effectiveness of various marketing programs. Conducting surveys so as to find out awareness about company products and services can also help in measuring performance of marketing programs focused on generating brand value. It is also very important for marketing division to make reach of company in media, which help generate awareness about company in general public. Sales to cost efficiency are another important parameter, which can form the basis to evaluate the overall performance of the company's marketing programs. Stock prices are also taken as a measure of effectiveness of marketing programs, though not directly. Among all the parameters mentioned above, few have high degree of correlation with marketing performance whereas other parameters have comparatively lower degree of correlation with marketing program's performance.

Marketing related data is generated at every stage of customer engagement cycle. This data becomes very voluminous for companies having larger customer base. But not all the data generated is useful and serves the purpose of measuring marketing. There is need to segregate data and categories in such a way, that it can be used effectively and logical inferences about marketing activities can be drawn out of it. In each area of marketing, there are few parameters which can be used to measure performance. For each area, certain parameters are selected to develop metrics. Basically whole marketing exercise can be divided in following domains of activities.

  1. Establishing brand identity and enhancing brand value on continuous basis.
  2. Product and services marketing management
  3. Public relationship of the company
  4. Developing business in newer and unexplored areas
  5. Various advertisement campaigns
  6. Product promotion through various events resulting in leads generation.
  7. Making company website popular, attractive and rich in features
  8. Managing sales operations
  9. Managing customer relationship.

Brand Management

Important variables which can be used to measure performance of marketing performance in this domain are as brand equity, brand awareness, brand preference, brand image and brand loyalty. It becomes imperative that measuring marketing exercise should try to pick up right variables, which reflect true performance of the brand management team in marketing department. Each area of brand management can be evaluated by specific variable, which correlate to enhanced brand value.

Product Marketing Manager

Products and services of the company are most important and pivotal link between customer and company. It is products and services, around which whole business is woven. It becomes of utmost importance that product design is done in such a way, that it meets customer requirement completely. Pricing of the products and services should also be kept at a level which gives customer satisfaction for the needs fulfilled by these. It is prime job of the marketing division that it keeps track of the customer preferences and needs arising out of changing lifestyle of consumer on account of technological advances and other developments. Marketing departments are supposed to keep close track of the level of customer satisfaction. Various important domain, in which marketing team is supposed to work here are like customer satisfaction, market share, price sensitivity, overall sales and sales by various channels.

Public Relations Management

Managing public relations is another important domain for marketing division. Especially the lifestyle of customers has become fast and it is observed that company image do affect buying decisions\. So it becomes more important that customers are made to receive good image of the company as well as its products and services through various public relations programs. Various parameters which can be used to measure effectiveness of the marketing department in this domain are like media mentions, size of audiences for each of such happening, number of interviews conducted on reputed media channels and nature of these occurrences. All these may happen in different media channels like print media, television or magazine etc. But care has to taken as which media channel is popular and effective in targeted population. Elements of reputation and popularity of the channel, in which company is getting mention, should be taken in to consideration. Important point is that channel is popular and reputed among the targeted audience. As a survey found that coca cola was focusing on popular family entertainment channels for public relations management, but it was found later that English movie channel and sports channel were more popular among targeted youngsters forming major customer base. So while forming metric for measuring marketing, care must be taken so as to include all these factors.

Business Development Division

Business development division helps company in exploring possibilities of business opportunities in newer areas. Few important functional areas, where performance can be measured are as follows.

  1. How many new business partners have been added so as to develop business in new areas?
  2. Out of new business partners added, how many actively participated in developing business.
  3. How much business have actually been brought by these partners.
  4. How many business partners actively participated and contributed for advertising.
  5. What had been the attrition rate for these business partners.
  6. What had been tales volume through channel partners.
  7. What has been the contribution of these business partners in making business shows?

These are the areas, in which performance of the business developmental activities can be measured.

Advertising Manager

Advertisements are one of the most important constituent of the whole marketing activities at one hand, and a very costly affair at the other. So there is necessity to measure performance in this domain on continuous basis, which can help in improving various advertising schemes. Various counts on which performance of the advertising campaigns can be measured are as follows.

  1. Time slot in which advertisements were released
  2. Reaction of the prospective customers for these advertisements can be assessed.
  3. Press release of the company should be synchronized with advertisements released.
  4. Business partners and channel partners should be informed about press release and the advertisement beforehand, so as they can plan their activities accordingly.
  5. Advertisement and other forms of promotion should be in tuning to each other.
  6. Ability of call center should also be judged on the basis of their services rendered for calls being generated out of advertisement released.

Lead Generation and Promotion Division

Though later part of twentieth century saw steep rise in users of internet, but how much helpful it is in generating business need to be evaluated for investment made in this domain. May be people find it useful for informational purposes, but sales is not driven by it in certain segments. To measure utility and effectiveness of internet and telephonic media, following focuses investigation can help in making picture clear.

  1. How many qualified leads are being generated through e-mail campaigns?
  2. How successful various seminars, workshops and road shows and exhibitions had been I generating quality leads.
  3. How effective it had been to do telemarketing in generating quality leads.
  4. How many of the total leads generated qualified as quality leads and how many out of these total got converted to sales actually.
  5. What was the ration of quality leads to leads closing in sales also shows performance of lead managers.

Web Site Management

Website management is also a very important function for marketing team. There are some areas, where performance depicts the effectiveness of programs very clearly. Few important facts can be helpful here in measuring marketing. Important of these facts are like

  1. Getting details as how many people are visiting company's website.
  2. What are the contents of the website, which got navigated by the customers most?
  3. Which path has been taken up by the visitors mostly?
  4. How many breakdown of the website took place?
  5. How many e-mails have been received by the company enquiring about products, services and other related issues?

Performance of company website in these areas helps in identifying, that how much marketing team had been successful in linking products to customers.

Sales Manager

Sales are the most important function, which generates revenue for the company. There is a need to have very focused approach so as to analyze, the performance of sales professionals and schemes. How sales reams are performing in various sales territories, performance of various sales schemes launched and funds spent on making sales tick are few important issues to be analyzed at various stages. Information need to be generated on various counts so as to evaluate performance of marketing teams. Few important areas of this count are as follows.

  1. Report containing facts and s for sales taken place in various regions.
  2. How much was the target for sales teams in preceding years and how much closely it was achieved.
  3. How much funds have been spent on making sales happen
  4. How many orders were actually booked
  5. In how many leads, invoice have been sent
  6. How much commissions have been paid to get sales orders
  7. How many contracts have been entered for sales

These are some important areas, data on which indicates the performance of the marketing team in sales promotion and execution.

Customer Relationship Management

Customer relationship management is a very important domain of marketing division. Here all relevant information about customer is collected so that retaining old customer can be facilitated. It also helps in analyzing trends in sales and other related activities. As the time is changing, customer life style is also changing. As a result of this, there is change in needs of customers and also new type of needs is arising. So unless, company keeps itself aware about all these customer preferences, likings and newer needs, it may lack competitive edge over its rivals in retaining customers and adding new customers.

Marketing division performance can be evaluated on various count, few important among which are mentioned below.

  1. To which extent, company has been able to retain its customers?
  2. To what extent company has been able to reach targeted customer segment?
  3. Marketing division should have been capable of collecting data regarding customer buying habits, analyzing this data and to give clear-cut recommendations to products division for any necessary change or addition of features.
  4. Marketing division should be capable of identifying factors, which influences buying behaviors of customer's in particular geographic region.
  5. Marketing division should also be able to identify and analyze the buying process of customers, so as to develop an effective sales plan.
  6. At what time and at what place customer prefer to be contacted, should be made out of data collected by marketing team so as to chart out plan for effective sales.
  7. There are various means, through which customers will like to be contacted. It may be on telephone, internet or face to face meets. Marketing team should be able to develop this intelligence for various segments of customers.
  8. There are various types of information, customer look for before making purchase decision. Marketing division is supposed to collect data about it from customer side, so that sales team can be equipped with necessary information. Besides that this information can be incorporated in brochures, leaflets or advertisement, to make these more effective. How successful marketing team had been in doing all this exercise is an area for evaluation of marketing team.

Marketing Executives

Marketing professionals in company entrusted to carry out mandate, should not only be qualified but to also have business acumen and intelligence, so as to make marketing moves efficient and rewarding. Their focus should be to make marketing programs most productive. With the data generated and software tools available for analysis, they should be able to control and direct marketing activities in total. So the overall performance of the marketing programs reflects the performance of the marketing professional heading functioning. Few focused areas to measure the performance of marketing team can be as follows.

  1. How successful marketing team had been in generating quality leads for given amount of investment.
  2. How much actual sales took place for investment in marketing efforts.
  3. How much stages was there in customer engagement for actual sales to take place.
  4. How much successful , marketing activities has been in enhancing brand awareness.
  5. Change in attitude of personnel working in marketing division also need to be lloked in to while evaluating performance of senior executives controlling it.

Following table can be of help in generating a preliminary view about sources of data needed for measuring marketing



Media buy (TV)

Agency/production costs

Additional personnel during promotional period

Overhead allocation of operational expenses

Cost of goods

Cost of promotional discount

Purchase and maintenance of data warehouse

Development and execution of marcom materials











Incremental sales (revenue)

Incremental sales (profit)

Incremental market share

Incremental customer satisfaction

Incremental customer loyalty



External Agencies

Customer Insights

Customer retention

Jacquelyn S. Thomas. (2005)


Every activity has its own cost to be met with. Measuring marketing also does not come free. It takes reasonable quantity of resources to implement measuring marketing mechanism. Funds are required to get or develop, customer relationship management software, which can collect data and process, so as to generate required information. At the same time, if data generated is very large, it may be that one needs data base management software also, which is capable of serving queries generated by marketing department and at the same time capable of developing information in desired formats, which can be used to develop business intelligence. It is not only acquiring good quality software which can serve the purpose, but manpower also, who can manage measuring marketing mechanism. Many a times, it may be, that person required to head measuring marketing functions cost higher side salary as he must have not only exposure, experience but analytical capability for various marketing domains. As the business world is becoming more and more competitive by each passing day, margins are falling and resources at spare are becoming scarce. It has created a scenario, where there is increasing pressure for smart deployment of resources. So though marketing measurement mechanism help organization in making more efficient, makes financial decision more prudent and benefits organization many ways, but it cost also. So one can say, that though marketing measurement benefits a lot, but it requires some investment initially. Sometimes organizations become myopic and don't look for the returns of measuring marketing giving more focus on saving, they are making by not investing in measuring marketing mechanism.

Marketing is not only about generating financial numbers. There are some intangible dimensions and benefits also attached to marketing efforts. Many a times it does happen, that efforts do not get converted in to revenue increase in short span. But these marketing efforts get translated in to financial terms in long run. Brand establishing is one such exercise, where investment over certain period of time consistently pays in terms of establishing company in market. Buts returns for investment in brand establishment may not be immediate or in a certain product launched in coinciding time, though its benefits are seen for all the products launched afterwards. Besides that there are many marketing professionals, who join this stream of business activities because of creativity, imagination and element of intuition involved in it. If we try to correlate every action of marketing to incremental financial returns, these people may get discouraged, which may not be in business interest of the company.

There have been consistent and serious efforts to establish parameters which can measure performance of the marketing professionals accurately. But even after so much work done in the area, there consensus has been established. One such area is, for example, branding exercise. Though everybody accepts, it is one of the most effective and important marketing activity but there is not a consensus on how to measure its effectiveness at some particular time of advertising campaign. It sometimes creates confusion in the management, that how accurately measuring marketing metrics represent the performance of marketing programs. So there should be made efforts to establish metrics, which truly measures the performance of the marketing professionals.

There is a whole domain of intangible benefits, which are derived in long term and benefits organization a lot. But these are tough to measure on short term basis as effect of some marketing campaigns to enhance these benefits spread over lifespan of the organization. So effect of these marketing campaigns cannot be measured in short term. It shows that in some areas it may be tough to put measuring marketing mechanism.

There are various marketing metrics available in market now days. A rough estimate goes to approximately 200 for these metrics. It depends upon the business model, business objectives and type of market in which company is operating, that which model will suit best. So there can be standards set of metrics for any particular type of business. It remain open to management that what metrics they find best representing the performance of their programs and professionals in increasing profitability of the organization. This flexibility offers advantages and disadvantages both. If the company finds right choice of metrics on account of this flexibility, if benefits a lot. On the other hand, if marketing team uses this flexibility in metrics design in hiding their nonperformance, the basic purpose of getting measuring marketing gets defeated. So we can safely conclude that establishing right metrics for measuring marketing in a important and tough task, which needs a lot of deliberation before being finalized. It requires that views of all concerned should be considered so as to avoid any possible negative impact of measuring marketing initiative on the organization as a whole.

It has been found that there may be various parameters, which can represent the desired performance of the marketing efforts. But out of all these variables, few have got higher degree of correlation with the desired marketing performance. At the same time, other variables may have lesser degree of correlation with performance of marketing initiatives. It may prove a difficult task in itself to select variables which actually and closely represent the desired performance of the marketing efforts. So there is generally confusion as which variables are more important and truly represent performance and hence should be selected.

Business involves not only the marketing division, but many other functional divisions. Performance of each of these divisions is related to each other and overlaps also some times. So to measure performance of the marketing division, it may be that data is needed from other departments also. But it may not be easy to fetch data from all other divisions so easily. Not only the departments of organization, but entities from outside the departments may also be involved in analysis, when performance of marketing efforts, channels and marketing vehicles adopted is to be evaluated. Various entities may provide data which may not be accurate and in fact may be biased towards their own benefit. Overall impact of this type of incidence may be that performance may not get represented truly, but a doctored performance may come out.

It may require making some changes in already existing process of data collection from customer engagement cycle. Sometimes it may result in fast growth of data volume, which may become very tough to handle with, unless new software and hardware is installed. Besides that it may require new set of people with expertise to handle and manage new processes. It may affect the working conditions and set of circumstances with which system is being run presently. All these things generate resistance from the present set of people. So reaction from existing people has to be managed smartly. So facilitate change in people and procedures, expert people may be required.

Resources are always scarce in business organizations. Scenario is worsening day by day, as competition is increasing resulting in increased pressure on margins. In emerging times, it has become of utmost importance to use resources very smartly. It is not only the finances, but other type of resources also, such as manpower and infrastructure available, which gets burdened with new initiatives. So care should be taken while taking any initiative. It may get opposed unless, management and people get convinces about the benefits, which any such initiative is going to offer in lieu of investment being made for it. There has been fight for resources among various departments all the time so as to get more budgetary support for their activities. In such a scenario, a very strong presentation of case for measuring marketing initiatives is required.

Measuring marketing activities makes functioning of marketing department more transparent and professional. Professionals become more accountable for each dollar spent. It results in wiping out whims of individuals while working for company's objectives. There has been a tendency in marketing department as well as in other functional domains that while giving contracts for new projects, a bias does take place in favor of old contractors. But this does not serve the objectives of the company, which happens to be maximizing profit of shareholders demanding in turn true professional functioning in interest of company. There is no scope of being biased in favor of anybody, who is not giving best possible results, whereas somebody else can give the same. This elimination of scope for using discretion in awarding contracts and being biased, makes people uncomfortable many a times, when measuring marketing mechanism is put in place. This leads to some element of displeasure or being uncomfortable in the existing marketing professionals in company. But in the larger interest of the company, bringing in transparency is always preferred. So efforts are being put in to manage this element of dissatisfaction with the help of change management and committed support of top management.


There are many marketing initiatives taken up by marketing department of the companies every year. Not all of these marketing initiatives result in actually enhancing company profitability, expanding company's customer base or in increasing revenue. In some cases it has also been observed that many of the marketing initiatives do not fall in line with the company objectives. It happens when company objectives are not kept in focus and marketing executives do not function on professional way. Personal whims, biases and other unethical elements creep in. To reduce possibility of any such non performing attitudes setting in and to avoid such incidences taking place, it becomes of critical importance that only those marketing initiatives and moves need to be given financial support and other types of resources allocation, which are in line of company's objectives. Only those marketing programs need to be provided budgetary support and other resource allocation, which fall in line with the company objectives most important among which is to increase shareholders value. Prudent spending norms lays down that only those marketing programs which fits into strategic and tactical goals of the company, should get resource allocation. Measuring marketing moves help in evaluation of various marketing moves making the functioning more transparent and people controlling these operations more accountable. But to make it possible it is required that data is collected at every stage of customer engagement cycle and analyzed in required way so as to generate business intelligence, which can be used so as to direct marketing operations in required way. Measuring marketing helps in making marketing department functioning more disciplined and focused. Intuition and creativity are must for keeping innovative ideas flowing in, but these should be in tuning with set objectives of the business. In fact very good results can be achieved if a right blend on intuition and measuring marketing technique is put in place.



Measuring marketing is very helpful for business organizations in making investment decisions for marketing domain very rationale and target oriented. It helps organizations in prioritizing various marketing programs as per their respective performance outcomes. But establishing the necessary framework for measuring marketing mechanism requires very careful analysis of organizational needs, processes and procedures. The very first step is to define role of marketing activities of organization with respect to growth in organization. Sometimes there is confusion in the minds of senior management professional, if the marketing activities are really contributing in organizational growth. Generally there is also divided opinion in the minds of the executives as to how much contribution in organizational growth can be attributed to marketing activities. This purpose is best served by implementing measuring marketing techniques. Once measuring marketing mechanism sets in, it helps in identifying marketing ROI. That gives enough space to justify, expenditure incurred on marketing activities. It also helps in planning for further ROI in marketing as well as overall corporate ROI.

There are few questions, for which answered must be looked in to honestly so as to facilitate the process of implementing measuring marketing mechanism effectively and with clear objectivity. The very first thing should be to find out, understand and let everybody concerned communicated is to benefits of measuring marketing mechanism in organization. Everybody concerned should also be very clear as to what loss establishment as a whole may incur, in case measuring marketing is not adopted in the organization. Another very important issue in the process of initiating measuring marketing is to decide as to who will be in charge for measuring marketing activities. This is also a very tricky affair. Because it focuses on measuring performance of the marketing division on a whole as well as measuring performance of individual marketing programs, for which particular marketing executives may be responsible. Care must be taken so as to ensure that a person who is directly involved in marketing programs and budgeting is not the person, being made in charge for measuring marketing activities. Otherwise there are chances, that measuring performance may get biased and true performance may not come out defeating the very basic purpose of creating measuring marketing initiatives. Efforts should also be made so as to identify possible hassles and challenges, which may come up during implementing and adopting measuring marketing initiatives. It helps in taking some preventive measures, which may make the whole process of transition smooth and fast.

Now comes the second stage, when individual organization, has to look at measuring marketing process from his own organizational point of view. In modern times, businesses are so divergent that a common approach or a generalist view cannot be adopted. Every business has its own unique set of characteristics. It becomes very important at this stage that organizational objectives and strategies adopted to achieve these are analyzed in detail. What is desired to be achieved from marketing functions must be clearly spelt out. It is only if organization is clear about its objectives, marketing programs adopted and expected outcomes of these programs, those parameters to be measured can be identified. Developing metrics for measuring marketing performance should be very thoughtful exercise and specific to individual business. In no way, there should be effort to copy metrics from some other organization, as every establishment have different set of objectives, procedures, set of people and way of achieving goals. Different industry has different outcomes for their marketing activities. For example, in a FMCG company, brand value may be of utmost importance, whereas for a company engaged in custom built software, it be queries generated from client side, which may be of greater importance.

Some of the important parameters, which can be identified so as to measure performance of marketing performance in terms of revenue growth are such as net p[resent value of firm, gross margin, incremental customer value, customer .life true value, threshold value for ROI, incremental cost Vs incremental revenue and previous marketing expenditure. These are some of the very important marketing and financial parameters, which are related to performance of marketing professionals. What so ever metric is chosen for measuring performance of the marketing professionals, these must be related to above mentioned variables. Based upon these variables only, there should be made efforts with due care to develop a model for measuring performance. Clear concepts should be developed so as to measure return on marketing investment.

There should also be made very serious efforts so as to develop concept of return from marketing activities. Whatever efforts are being made in the domain of marketing, there must be clearly spelt out expectations, from each of these activities. There should not be any marketing myopia but at the same time returns should also not be underestimated. Efforts should be made so as to develop a rationale estimate of returns from investment on marketing activities. It will help at later stage in making balanced budgetary decisions. There is a need to take care for estimating returns on various marketing schemes and vehicles (such as TV, print media, internet etc.), so as to estimate returns on each one of these separately.

When measuring marketing mechanism is put in place, it generates a lot of data at every point of customer engagement cycle. This data becomes voluminous very soon especially in companies, which are in customer service business like telecom service providers. There is not of mush use of this whole data in raw form. It becomes useful, only when processed so as to generate useful information out of it. Even at this stage, we found that information developed out of this whole data becomes very large. It becomes difficult to extract useful decision supporting information out of it. So it becomes further important to process this bulk of information and draw sensitive information, which can be used for the process of business intelligence. This business intelligence helps companies in deciding strategic moves, which companies takes to compete with its rivals.

This necessitates the need of having a data base management software, which is not only able to process bulk of in\formation fast, but is also capable of processing different queries on this data. It is only possible, when data base management software is efficient, fast, customized to organizational needs and metrics for measuring marketing is well defined.

Once we get the required measuring marketing metrics defined, software for collecting data from different point of customer engagement cycle installed and data management software also in place which processes all data so as to generate information in such a way that it can be used to support decisions at corporate level, organization becomes ready to incorporate measuring marketing measurement. Now is the stage, where one has to assess the present scenario in the organization and its readiness to accept measuring marketing mechanism. There are different levels in organization such as corporate, tactical, strategic decision taking and operational level. While accessing present scenario, it has to be operational and tactical area of operation, which need to be given most careful attention. These are the areas, from where most of the resistance may come. It has been observed that most of the routine changes in functioning as well as evaluation will come from these functional areas. Generally strategic business unit and corporate level entities do not make any resistance, but actually favors measures which make functioning of various divisions more transparent and functionaries more accountable for their actions and expenditure incurred thereon. These measures help the corporate level decisions more rationale and also help strategic business unit in making logical moves backed by factual situation based upon revenue s.

Then comes a stage, where one has to chart out a actual implementation roadmap. It includes identifying key personnel to be involved in measuring marketing operations, their training needs, orientation programs required and necessary infrastructure. It is also required to make a decision so as to buy or in-house develop measuring marketing software. It is also required to identify and engage change management professional at this stage, if need is felt for the same at this stage.


1. Possible resistance to change

It is observed that over a period of time, people become accustomed to the procedures and practices being followed in organizations. Especially, when procedures give opportunity to make functioning non-transparent and reduce accountability. This is the case typically with marketing department. Over the years, expenditure in marketing division has been justified on qualitative explanations, not on hard facts and s. Marketing measurement practices puts a system in place, where functioning of marketing professionals becomes more transparent and professional. Though it gives credibility to the working of marketing division, but also makes them accountable for funds spent on various marketing activities. This is where marketing professional may feel uncomfortable. To facilitate change in attitude and working of finance professionals, change management elements may be put on the job. As this resistance may come not only from lower management people, but even from higher functionaries, commitment from top management will be a must. Suitably designed workshops and training programs may be conducted so as to facilitate change management. Adopting software able in capturing required data at every customer engagement cycle can help in lessening dependence on attitude of marketing professionals. (Jacquelyn S. Thomas. 2005)

2. More accountable marketing department

It has been seen that in most of the board meetings, marketing executives approach management for enhanced budgetary allocation on the basis of annual increase in percentage. They simply want budgetary allocation of last year to be increased by certain percentage for current year. Another way of getting budget allocation by marketing professionals is to ask for certain percentage of total budget for marketing division. But in modern times, when every dollar is accounted for its productivity, this is not justifiable. Marketing professionals must come forward with clear cut program in current year along with expected outcome in terms of financial implication, while asking for budgetary allocation. Marketing division should also measure performance outcomes of its previous year programs so as to give more credence to its activities and hence justification to its current demand. Top management will also be able to take more prudent financial decisions based on certain rationale. Once measuring marketing techniques are in place, contribution of marketing department in organizational growth, becomes clear and visible, to management in financial terms.

3. More credible marketing programs

Marketing departments are generally found unable to come out with numbers giving credence to their claims. What so ever claims, marketing people make, about their contribution towards achieving business objectives, are seen with suspicion by other departments. It happens mainly because marketing

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