CASE STUDY ON: MANAGING THE MARKETING EFFORT IN

A GLOBAL ENVIRONMENT

UNITY UNIVERSITY
ADAMA CAMPUS
DEPARTMENT OF BUSINESS ADMNISTRATION
MBA PROGRAM

SUBMITTED BY – HANA TESHOME

ID NO – 0416/22

SUBMITTED TO – DR BOGAL A.
 JULY 2022
CASE STUDY ON: MANAGING THE MARKETING EFFORT IN A GLOBAL
ENVIRONMENT

HOW WELL IS MARKETING PERFORMING?

An important theme of this book has been the need to evaluate the results of marketing
activities. Various forms of evaluation have been discussed, combining objective measures with
more holistic subjective ones. While marketers might be good at measuring certain key
indicators, how can you measure the effectiveness of an organization's marketing function?

The Marketing Metrics research project, sponsored among other organizations by the
Chartered Institute of Marketing, set out in 1997 to look at real-world marketing performance
assessment. It found that only a small minority of UK firms fully assess their marketing
performance, despite most thinking that they do so adequately. Nearly all firms compare actual
sales with sales targets and there is an increasing focus on shareholder value, but relatively few
measures customer value. It seems that few firms assess their total marketing effort. Why don't
firm measure performance- Does it matter?

If marketers have been telling their board of directors that marketing expenditure is an
investment, not a cost, the board is entitled to see the resulting asset and its valuation. The
asset created by effective marketing has often been referred to as ‘brand equity'. The
Marketing Metrics research found that about one-third of UK companies had no language for
this concept. Of those who did, about half regularly quantify brand equity.

The 1999 Marketing Forum, comprising leading UK marketers, found that those claiming to
measure marketing expenditure effectiveness grew from 75 per cent to 83 per cent between
1995–7, but of those, only 14 per cent, growing to 21 per cent, had measures of brand equity.
Part of the problem here is language: some measure brand equity but do not call it that. Some
companies may have systems for major brands but not for minor ones. Measuring the concept
can be expensive, especially where a firm operates globally.
A number of reasons can be identified why firms may be unwilling or unable to measure their
marketing effectiveness:

1, The board is not marketing or customer oriented, with no senior marketing representation
on it. Little board agenda time is made available to discuss marketing issues.

2, Determination and effort may be considered more important than objectivity. To use an
analogy, the First World War would never have been won if the soldiers had known the score—
it was won by sheer determination.

3, Some company boards believe that accountants should be responsible for accounting for all
that matters. Internal measures are interpreted as navel gazing, and are no substitute for
measuring sales and market share.

4, Marketers may argue against having their effectiveness measured too closely by pointing out
that marketing is the business of the whole company, and so they cannot be held specifically
accountable.

5, Marketers are often too busy fighting the next battle and this should take priority over
worrying about the last one. Most promotions, for example, have pre-set targets but only a
minority of those are formally compared with results.

6, In reality, the status of a marketer is determined by the size of his/her marketing budget. Size
of budget, which can be measured, looks more credible on a CV than subjective outcomes.

7, Marketing effectiveness may be perceived as something essentially unmeasurable and that

should be assessed by more subjective ‘feel good' or ‘good news' aspects.

8, Marketers may argue that past experience has shown that marketing expenditure cannot be
related to sales and profits, i.e., profit and loss account measures do not work.

9, The environment changes too fast, so results need to be judged by the new realities, not
those expected when the plan was drawn up.

10, Creating new measurement systems takes too long. The current marketing team will have
moved on by the time it reports.
It is important to note that measuring overall marketing performance is not the same as
measuring marketing expenditure effectiveness. Some marketing-led organizations, such as
Marks & Spencer, have managed with only minimal marketing expenditure budgets. More
importantly, the effectiveness of the marketing expenditure budget cannot be assessed without
measuring the change in the asset of brand equity.

Brand equity is fundamental to assessment. The results of marketers' actions should live on
after the current financial period. Costs today may pay back next year or the year after. Good
marketing may or may not affect sales, but it always increases brand equity. There is plenty of
evidence of organizations whose marketing is ineffective and who have seen their brand equity
diminish. Banks who were once trusted institutions have caused anger among many of their
customers through perceptions of overcharging, incorrect debits, and poor communication.
One result has been that many customers have shifted their bank accounts and credit cards to
supermarkets and other rivals to banks who have achieved high levels of brand equity. Many of
these misgivings about banks can be attributed to operational functions, but this only serves to
emphasize the point that marketing should be a company-wide integrator. Customers may not
care who in the bank is the source of their grievance, but the result is the same—the value they
place on a bank's brand is lower than it was before.

A diminution of brand equity has wide-ranging consequences for an organization and can affect
its ability to charge a price premium (e.g., the premium charged for Coca-Cola compared to
Sainsbury's own-label cola) and reinforces consumers' buying habits.

Building brand equity is the primary marketing function and is likely to be developed by the
following:

 Getting top management to empathize with customers, to understand what they value
in a brand.
 Having a shared language internally and with advertising and other marketing service
agencies.
  Developing a more realistic set of targets than sales.

 Using brand equity as a basis for rewarding managers.

If the maintenance of brand equity is a crucial measure of marketing effectiveness, it might be

expected that marketing managers' pay would be related to changes in brand equity. Yet there
is little evidence that this takes precedence over more conventional reward systems based on
sales and profitability.

Adapted from Tim Ambler, ‘Why is Marketing not Measuring Up-', Marketing, 24 Sept. 1998,
pp. 24–5.

CASE STUDY REVIEW QUESTIONS

1. Given the importance of measuring marketing effectiveness, how do you explain

the success of apparently intuitive marketers such as Richard Branson?

2. What is the difference between marketing efficiency and marketing

effectiveness?

3. To what extent is it desirable, or feasible, to use brand equity as a measure of

marketing effectiveness?
1, Given the importance of measuring marketing effectiveness, how do you
explain the success of apparently intuitive marketers such as Richard Branson?

It is important to measure marketing effectiveness in order to ensure that marketing campaigns

are achieving their desired objectives and are providing a positive return on investment (ROI).
By measuring marketing effectiveness, businesses can fine-tune their marketing strategies and
tactics to improve results. Additionally, measuring marketing effectiveness can help businesses
to allocate their marketing budgets more effectively.

 There are a number of factors that contribute to the success of apparently intuitive marketers
such as Richard Branson. One factor is that they have a deep understanding of their customers
and what they want and need. Additionally, they are able to tap into trends and understand
how to market to their target audience. Additionally, they are able to take risks and be creative
in their marketing campaigns.

Another factor that contributes to the success of apparently intuitive marketers is that they are
able to learn from their mistakes. They are not afraid to experiment and try new things.
Additionally, they are always looking for ways to improve their marketing campaigns.
Additionally, they are able to adapt quickly to changes in the marketplace.

2, What is the difference between marketing efficiency and marketing

effectiveness?

 Marketing efficiency is a measure of how well a company's marketing resources are

being used
- concerned with how well a company uses its marketing resources
- looks at how well those campaigns and activities are planned and executed.
 - is all about delivering marketing programs at the lowest possible cost
- Typically expressed in dollars and are usually ratios, e.g., Cost per enquiry, cost per
sales.
- focuses on minimizing the resources or time needed to complete the process
- It is doing things right

 Marketing effectiveness is a measure of how well the company's marketing is working.

-is concerned with how well the company's marketing actually works.
- looks at the results of marketing campaigns and activities,
- is the extent to which marketing actions have supported the company to achieve its
business goals.
- It is the measure of producing the required results
- The measure of marketing effectiveness tends to be absolute numbers. E.g., number of
sales
- It is doing the right things.
- Focuses on the attainment of the goals of the business

In general, a company wants to be both efficient and effective in its marketing. However, there
may be times when a company needs to focus more on one than the other. For example, a
company may need to increase its marketing efficiency if it is not getting the most out of its
marketing budget. Alternatively, a company may need to increase its marketing effectiveness if
its marketing campaigns are not achieving the desired results.

3, To what extent is it desirable, or feasible, to use brand equity as a measure

of marketing effectiveness?

Brand Equity is an asset. It is most desirable to have brand equity. Brand equity helps is
charging premium or generating more sales. Once brand equity is developed less marketing
effort is required to achieve the desired results. Hence brand equity helps in achieving
marketing effectiveness.

Marketing effectiveness is the extent to which marketing actions have supported the
company to achieve its business goals Richard Branson is a founder of Virgin group in 1970s
and controls more than 400 companies today. He explained that there is no shortcut to
success. So, creating success and profitable business needs time since it is the process of
building good name as customers learn to trust and relay on the products and services
offered to them. The success of virgin group is endorsed to high regard placed on customers
in addition to marketing strategy. The firm has a very clear strategy in pricing, positioning,
product and promotion. Hence his success could be explained from the importance of
measuring marketing effectiveness point of view as follows.
 Creating useful product or service - there should be a better reason, considering the
benefit of the society as a whole, than money to run business. This in turn, resulted in
capturing customers, connect with them and keep them coming back, as he stated.
Moreover, his success in creating products and services relay on conducting research to
identify the gaps or areas ready for innovation to make the business in different way
 Simple way of communicating - He advised that messages should be easily
understandable
 The Way of promoting the business / sell yourself / - knowing brand and doing the
things in own way resulted in followers so that free advertising will come soon.
 Use advantage of social media - media such as twitter and Facebook play an important
role in communicating messages to wide range of audience with in cost effective and
efficient manner and also to have opportunities for innovative engagement with
customers.
 Enjoy the ride - move on, expand to new territories to do anything interested in.