The purpose of marketing control is to keep the marketing activities on the right track and align them with the plans and goals of the organization. The marketing control system should be flexible so that it can be adjusted to suit the needs of any change in the environment.
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Process of Marketing Control
Marketing control involves four basic steps as shown in the following:
- Establishment of control standards.
- Measurement of performance.
- Comparison between performance standards, and
- Correction of deviations from standards.
1. Establishment Standards of Performance
Standards represent the criteria for measurement of performance of the Marketing department.
They are the expression of goals of the department in such terms that the actual accomplishment of assigned tasks can be measured against them.
Related: 18 Benefits and Objectives of Marketing Control (Explained).
Standards may be qualitative or quantitative. Determination of standard is a difficult task, therefore; it should be done very carefully. While determining the marketing standards, two aspects must be considered:
First, what are the marketing objectives, and Secondly what are the circumstances under which these objectives are to be achieved.
For example, standards cannot be the same in the case of a new product and an established product.
Marketing standards can be established on the basis of the following:
Marketing Planning
The structure of marketing plans includes situation analysis, determination of marketing objectives, formulation of marketing strategy and developing a future course of action to achieve targets.
For each component of the marketing mix, individual plants can be prepared. Further plans can be developed according to Products, customers and geographical regions.
All these aspects can become a base for the determination of marketing standards.
Marketing managers can periodically collect information to know to what extent these plans are being implemented properly.
Marketing Budget
The marketing budget expresses the anticipated results in numerical terms. It is a statement of planned revenue and expenditure.
It may be stated in time, materials and money or in other units. Budgets can provide a sound base for comparison.
However, the marketing budget should not be based on mere guesswork rather they should be based upon real facts.
Past Sales Records
Sales of a particular day, week, month or year can be taken as a base for comparison for the same period.
However, such a standard will be suitable only when there is no change in the business circumstances during that period.
Number of Activities
Sometimes the activities such as the number of customers contact, number of services rendered, the number of complaints redressed and number of queries handled, etc. may act as a standard for comparisons.
Related: Marketing Audit: Meaning, Process, Characteristics, Objectives.
Market Potentiality
A company can predict the demand for its product in a particular market and use it as the basis of comparison with its actual sale.
However, this base is suitable in those cases where market potentials can be predicted correctly.
Other Basis
Besides above, other facts such as marketing cost, number of customers, per customer orders, return on capital employed, per customer profit and Earning per share can also act as a standard for comparison.
Standards should be accurate, precise, acceptable workable. They should be flexible, like, capable of being changed when the circumstances require so.
They should not be merely based on past performance rather there should be based on scientific analysis.
Related: 11 Characteristics of Effective Marketing Control System (Explained).
2. Measuring Performances
The second step of control is concerned with the measurement of actual performance.
Without having information about the current operations on actual performance, a marketing manager can not exercise control.
It is the actual performance, which is to be compared with the standards of performance to decide further about action.
The quantitative measurement should be done in cases where standards have been set in numerical terms. This will make evaluation easy and simple.
In order cases, the performance should be measured in terms of qualitative factors. Some of the areas where performance should be measured for the purpose of marketing control are:
- Sales volume
- Market share
- Marketing costs
- Marketing standards
- Profits
- Productivity in various marketing activities such as distribution channel effectiveness, promotion, Salesforce, productivity, etc.
Related: How to Choose Right Sales Promotion Programs (Explained).
3. Comparing Performance Against Standards
The third step of the control system is to compare it with predetermined standards.
The marketing managers may have information in the form of data, graphs, charts, written reports, and personal observations to keep him informed about the performance of the department.
Such performance is compared with the standard to find out whether the marketing department is progressing in the right direction.
The comparison may reveal performance higher, lower or equal to standard. This step determines the degree of variation between performance and the standard.
Some variations in performance can be expected in all activities but some deviations are crucial and significant.
Related: Top 12 Strategies & Policies of Pricing in Marketing (Explained).
Therefore, the marketing manager must determine which divisions are critical and need to be corrected.
4. Corrective Actions
This is the last step in the control process. After comparing the actual performance with the prescribed standards and finding out that performance matches the standard no action is needed but when there is a deviation, corrective action is needed and if standard appears to be too high and lower or circumstances have changed, standards are revised.
Corrective action should be taken without wasting time so that a normal position could be stored quickly.
The remedial action that should be taken depends upon the nature and causes of deviation.
Therefore, the manager should also determine the correct cause of deviation.
Related: 18 Reasons and the Importance of Product Innovation (Explained).
Thus, now you know the all complete steps of the process of marketing control.
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