Understanding the Marketing Control Process
If you are like most small or medium sized businesses, marketing your company probably includes a basic marketing plan, most likely not written down. You probably have some marketing collateral (brochures) to leave with customers, a website, a social media presence that gets occasional attention, and a sales team. Like a sales analysis performed monthly or quarterly, there may be some control mechanism to determine if you are generating enough revenue to cover costs and earn a profit. If you are like most other firms your size, you are probably falling short of your marketing control process, that is, tools that help you analyze and assess your marketing activities.
What is Marketing Control?
Marketing control is a process where company management or executives analyze and assess their marketing activities and programs. Management then uses the results to make necessary adjustments or changes to their marketing plans. Think of marketing control as the navigation system on an airplane. The pilot sets the course, and the navigation system directs the plane toward its destination. However, due to weather patterns, the plane can drift off course, and the pilot must make adjustments to keep the aircraft on its path, or it can end up in a completely different location. If you are not monitoring your marketing activities and making adjustments along the way, you can end up spending too much money, generating no sales, or both.
For example, if a marketing manager implements a marketing campaign to increase sales for a specific store or product, that manager, or their team, monitors the campaign plan’s progress over a specified amount of time. The amount of time could be one week, a month, or quarterly. The marketing activity could be sales promotions, direct sales for retail floor staff or online ad spend, and conversions on their e-commerce store. If the campaign is not helping the marketing team achieve their established goals based on the team’s analysis, they will make corrections to any one of their campaign’s tactical elements. The process of monitoring and making adjustments to a marketing activity is the marketing control process.
The Marketing Control Process
As with any other business function, there is a process to follow that ensures the marketing control process’s effectiveness. Precisely, the process associated with the annual-plan control (see the explanation of annual plan control below). The process steps include:
- Goal setting – What do you want your campaign or activities to achieve?
- Performance measurement – How is the campaign performing. What precisely is happening. As an example, are you receiving more conversions on your eCommerce website? Are you generating more sales revenue?
- Performance diagnosis – Why is what’s happening occurring? If you are not receiving the projected sales volume, what would you attribute the reason to? What if you are earning more than projected sales? Could it be that your pricing is too low?
- Corrective Action – How will you correct the problem? If your marketing campaign performs lower than expected, what changes can you make to fix the issue? Were your goals unrealistic, or did you miss your target marketing?
4 Types of Marketing Control
There are four types of marketing control marketing managers can use to accomplish their analysis of marketing campaigns:
- Annual Plan Control
- Profitability control
- Efficiency Control
- Strategic Control
|Annual Plan Control
|Senior Managers and Middle Managers
|Determine if planned marketing results are meeting expectations
|• Sales analysis
• Market share analysis
• Sales-to-expense ratios
• Financial analysis
• Market-based scorecard analysis
|Determine where the firm is earning profits and where they are losing money.
|Determine profitability for:
• trade channel
• order size or basket size
|Line and staff management and marketing manager
|Determine marketing expenditures impact by examining and improving the spending efficiency.
|Determine efficiency by:
• sales force
• sales promotion
|Senior managers and Marketing manager or auditor
|Determine if the business is following the best options with respect to markets, products, and channels.
|• Marketing effectiveness rating instrument
• Marketing audit
• Marketing excellence review
• Company ethical and social responsibility review
Annual Control Plan
Annual plan control is responsible for ensuring that the company reaches its financial and other goals. Financials include sales revenue and profits. Using the marketing control process, the marketing management team establishes its monthly, quarterly, semi-annual, and annual goals. Second, they monitor the performance of their goals in the market environment. Third, if any deviations from the objectives exist, management analyzes the problems to determine what and why it’s happening. Fourth, management works to close any gaps between the issue and its goals.
There are four tools for measuring the annual control plan:
The profitability control is where a company measures its products, regions, customer segments, and order sizes to help decide if they need to expand, reduce, or eliminate any products, services, or territories. The instrument used to determine the profitability measurements is a marketing profitability analysis.
Efficiency control’s primary purpose is to use the data from the profitability analysis to educate the marketing staff on the implications of the marketing decisions made for the campaign.
The profitability analysis may reveal that the firm is earning weak profits on certain products, promotions, stores, or territories. Marketers may face decisions that include determining if there are efficient ways to manage the sales force, advertising spend, sales promotions, or distribution channels.
The final part of the marketing control tool is strategic control. From time to time, marketing managers should reassess their strategic approach to the market environment. The approach managers use for reassessing the market environment is the marketing audit. The marketing audit is a comprehensive, systematic, and independent examination of a company’s marketing environment. It also includes the company’s marketing objectives, strategies, and activities. The goal is to determine the firm’s challenges and opportunities to recommend a strategic plan of action that helps improve the company’s marketing performance.
Marketing is not just the arts and crafts department; it’s a control center that analyzes processes and makes adjustments to create efficient processes that yield business results. Without a marketing control process and the analysis tools that accompany the process, your business may lose sales and profits. It is up to the business owner or marketing manager to implement the marketing control process, manage the process, analyze, and make corrections to the strategic marketing plan.