Controlling marketing activities

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To achieve both marketing and general organizational objectives, marketing managers must control marketing efforts effectively. The marketing control process consists of establishing performance standards, evaluating actual performance by comparing it with established standards, and reducing the differences between desired and actual performance. Although the control function is a fundamental management activity, it has received little attention in marketing. Organizations have both formal and informal control systems. The formal marketing control process, as mentioned before, involves performance standards, evaluation of actual performance, and corrective action to remedy shortfalls (see Figure 2.7). The informal control process involves self-control,  social or group control, and cultural control through acceptance of a firm’s value system. Which type of control system dominates depends on the environmental context of the firm.We now discuss these steps in the formal control process and consider the major problems they involve.

Establishing Performance 

Standards Planning and controlling are closely linked because plans include statements about what is to be accomplished. For purposes of control, these statements function as performance standards. A performance standard is an expected level of performance against which actual performance can be compared. A performance standard might be a reduction of customers’ complaints by 20 percent, a monthly sales quota of $150,000, or a 10 percent increase per month in new-customer accounts. Toyota, for example, had a goal of selling 175,000 Prius hybrid-electricvehicles in the United States in 2007.55 As stated earlier, performance standards should  be tied to organizational goals.

Evaluating Actual Performance 

To compare actual performance with performance  standards, marketing managers must know what employees within thecompany are doing and have information about the activities of external organizations that provide the firm with marketing assistance. For example, Saturn, like many automakers, evaluates its product and service levels by how well it ranks on the J. D. Power and Associates Customer Service Index. In 2006, Saturn ranked number 7 among all automakers, down from number 3 in 2005, behind Lexus, Buick, Cadillac, Jaguar, Lincoln, and Mercury. Records of actual performance are compared with performance standards to determine whether and how much of a discrepancy exists. For example, if Toyota determines that only 162,000 Prius were sold in 2007, a discrepancy exists because its goal for the Prius was 175,000 vehicles sold annually.

Taking Corrective Action 

Marketing managers have several options for reducing a discrepancy between established performance standards and actual performance. They can take steps to improve actual performance, reduce or totally change the performance standard, or do both. For example, when Motorola introduced its Q mobile phone, competition lowered the price of its products, requiring Motorola to lower the price of the Q by $100. To improve actual performance, the marketing manager may have to use better methods of motivating marketing personnel or find more effective techniques for coordinating marketing efforts.

Problems in Controlling

 Marketing Activities In their efforts to control marketing activities, marketing managers frequently run into several problems. Often the information required to control marketing activities is unavailable or is available only at a high cost. Even though marketing controls should be flexible enough to allow for environmental changes, the frequency, intensity, and unpredictability of such changes may hamper control. In addition, the time lag between marketing activities and their results limits a marketing manager’s ability to measure the effectiveness of specific marketing activities. This is especially true for all advertising activities. Because marketing and other business activities overlap, marketing managers often cannot determine the precise costs of marketing activities. Without an accurate measure of marketing costs, it is difficult to know if the outcome of marketing activities is worth the expense. Finally, marketing control may be difficult because it is veryhard to develop exact performance standards for marketing personnel.

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