Describe the two major methods for evaluating the actual performance of marketing strategies.

Question

What will be an ideal response?

Answer 1

The principal means by which a marketer can gauge whether a marketing strategy has been effective in achieving objectives is by analyzing the actual performance of the marketing strategy. Sales analysis uses sales figures to evaluate a firm's current performance. It is a common method of evaluation because sales data are readily available, at least in aggregate form, and can reflect the target market's reactions to a marketing mix. If sales spike after a particular marketing mix is implemented, marketers can be reasonably certain that the marketing mix was effective at reaching the target audience. Information gleaned from sales data alone is not sufficient, however. To be useful, marketers must compare current sales data with forecasted sales, industry sales, specific competitors' sales, and the costs incurred from marketing efforts to achieve the sales volume. Although sales analysis is critical for evaluating the performance of a marketing strategy, it provides only a partial picture. A marketing strategy that successfully generates sales may nevertheless be deemed ineffective if it is extremely costly. A firm must take into account the marketing costs associated with a strategy to gain a complete understanding of its effectiveness at achieving a desired sales level. Marketing cost analysis breaks down and classifies costs to determine which are associated with specific marketing efforts. Comparing costs of previous marketing activities with results allows a marketer to allocate the firm's marketing resources better in the future. A company that understands and manages its costs appropriately has a competitive advantage.