by Marketing control marks the last link in the chain of marketing management as it is the terminal function. Marketing planning is the Alpha and control is the Omega of management process. Plans always do not result in desired outcome.
It means that there is need for redirection of efforts. Mere plans and planning represent half the show; what is important is that the plan formulated is to be implemented and to see that they succeed in achieving what is stated.
Analysing marketing performance is the part of a continuing process of developing plans for marketing activity centres, implementing those plans, controlling the performance, and adjusting the plans when the performance gets out of line.
This chapter plans to discuss various aspects of marketing namely, the meaning, the scope, the process, the essentials of effective control, its importance and the methods of marketing control, among other things.
One knows that ‘control’ stands for ‘check’ and ‘corrective measures’. Simply stated, ‘to control’ is to ‘verify and check the actual performance’ with the planned one.
Marketing control is to do with identifying and measuring all deviations from the marketing plan as closely as possible and to identify the root of the problem and provide a mechanism for corrective action.
Succinctly, marketing control is to do with monitoring and feeding back of marketing performance and its measurement and the evaluation against the standard performance to identify the deviations so as to correct them as and when they occur and to make available inputs for plan resetting and refinement.
Marketing control is a multi-dimensional activity because, it is diagnostic and prognostic. It examines the past activities and proposes future improvements.
The Scope of Marketing Control:
The spectrum of the study of marketing control process can be seen in at least four points namely, annual plan control, profitability control, efficiency control and strategic control:
1. Annual plan control:
Annual plan control stands for all those steps taken by the management to check the ongoing performance against the marketing plan over a period of a year and to suggest corrective steps to iron-out the deviations. The heart of annual plan is the system of management by objective.
This MBO comprises of four basic elements namely:
(a) Establishment of clear goals for each responsibility centre in the marketing firm for the ensuing year.
(b) Periodic measurement of performance to trace performance gaps of abnormal nature.
(c) Casual analysis of performance gaps to see whether the standards fixed are wrong or the marketing environment has changed.
(d) Taking corrective measures to reduce and plug the gaps between the goals and the performance. The performance measurement is done by using tools like market share analysis, sales analysis, marketing expenses to sales ratio, financial analysis and customer attitude tracking.
2. Profitability control:
Periodic research is also undertaken to determine profitability of the different components of the marketing inputs. Thus, profitability is ascertained as to the firm’s products territories- customer groups’ trade channels salesmen and other marketing variables. Profitability analysis is basically the task of matching the marketing and non- marketing costs to specific marketing entities, activities and sub-activities to have fish-eye view of the performance in terms of contribution.
This profitability analysis helps the marketing executive to make decisions on suspension, maintenance or extension of a given marketing activity. The base for analysis is income statement which is broken down to marketing variables to have dissected picture.
3. Efficiency control:
Efficiency control is the outcome of profitability analysis and control. Poor profitability results pave the way for improving the efficiency of marketing activities like personal selling, advertising, sales- promotion and physical distribution.
Therefore, the marketing manager is to gauge the efficiency of these specific branches marketing operations namely, personal selling, and advertising, sales-promotion and physical distribution. Good many ratios and percentages are designed to measure such efficiency improvement.
4. Strategic control:
Strategic control is the task of ensuring that the firm’s marketing objectives, policies, strategies and systems are optimally adapted to the present and future marketing environment. There are two basic tools namely, rating review and marketing audit.
Rating review takes into account the ratings on customer philosophy integrated marketing information adequacy of marketing information strategic orientation and operational efficiency. Another is marketing audit that is designed to evaluate the overall marketing strategy, study of the components of the marketing mix.
The Marketing Control Process:
Any definition of marketing control referred earlier has directly or indirectly harped on the four stages or the elements of the control process namely, setting of performance standards appraising of performance correcting the deviations and reformulating the plan. A brief outline of each step will not be out of place.
1. Setting performance standards:
The starting point in control process is setting the performance standards for marketing operations. These performance standards are the parameters of expected performance against which the actual marketing performance is gauged and evaluated. Therefore, standards are the managerial expectations over a plan period. It is a criterion or the acknowledged measure of comparison.
These can be quantitative and qualitative. Quantitative standards define performance expectations in physical and monetized forms or terms such as sales volume, profit or expenses per product region customer audience calls per salesman inventory levels and so on.
On the other hand, the qualitative standards are those defined in intangible and behavioural values like level of consumer satisfaction dealer relations salesmen and supervisor relations change in consumer attitude brand image and so on.
The quantitative standards are difficult to define and easy to apply while qualitative standards are easy to define but difficult to apply.
2. Appraising the performance:
Fixing of performance standards is followed by the appraisal of marketing performance. Performance appraisal calls for collecting and collating the information about performance, analysing it and relating it with the standards with a view to trace deviations and lapses, if any, and the cause thereof.
This is possible only when the organisation has built-in management information system that receives stores and presents authentic, adequate and timely feed-back from the market performance of different components of marketing mix. Such appraisal may be continuous or periodic.
Naturally, latter is preferred. It is worth emphasizing at this level that performance appraisal of marketing operations is much difficult because, the analysts have to deal with good many intangibles and qualitative aspects such as consumer satisfaction, consumer attitudes, brand image where quantification is not feasible though possible.
Further, marketing efforts pay-off is generally of long-run and, therefore, one cannot correlate current input of efforts with the current output results. What is more important is that marketing performance and the results are not the outcome of only marketing efforts because, very often good many environmental forces are at work which are hard to isolate and measure their impact on marketing performance.
3. Correcting deviations:
It is the performance appraisal that reveals the deviations or variations from the standard performance or the planned course of action. These deviations can be favourable or unfavourable.
Favourable deviations are acceptable deviations where actual performance is better than the planned one and indicates the cause or causes for the better performance.
Unfavourable deviations, on the other hand, are unacceptable deviations indicating the bitter performance less than desired giving the cause or causes for such short-fall in the achievement.
Under both cases, correction is needed as actual performance is to be equated or near equated to the standard performance. Depending on the nature of appraisal continuous or periodic corrections are brought about through change in the pattern of input, reformulation and the detouring tactics.
4. Reformulating the plan:
The final phase of marketing control process is reformulating the plan, on the basis of the inputs provided by the marketing information system on the actual marketing performance and its analysis and evaluation. For instance, if every time, there are favourable or unfavourable variances, it means that standards are too low or too high where equalization has not been brought about in terms of zero deviation.
Such feed-back of facts and analysis makes the marketing personnel much alert and wiser about relevance and effectiveness of policies, strategies, targets and resources on one hand and their practical application on the other.
