The problem of how to measure marketing effectiveness is one of the biggest dilemmas of many marketers today. Most often, marketing effectiveness is related to financial metrics, such as Return on Marketing Investment (ROMI) and Marketing ROI.
The concept of marketing effectiveness is largely related to the marketing activities undertaken by companies, as they plan and execute their product, price, place, and promotion strategies for the products or services that they sell. Marketing is usually defined as the process by which organizations create and distribute a product or service that their target customers will not only desire, but will also be willing to buy. Today, the field of marketing has become so broad that it already includes such activities as advertising, distribution, and selling. In addition, marketing has also come to mean anticipating the future wants and needs of customers, as well as monitoring the changes in consumer behavior.
Marketing plays a pivotal role in the achievement of organizational objectives. After all, an effective marketing strategy translates to increased sales; which in turn, leads to larger profit margins for companies. To ensure that all marketing activities achieve their purpose, company managers now see the need to quantify marketing performance or marketing effectiveness.
Modern marketers define marketing effectiveness as the quality by which marketing activities are implemented with the goal of optimizing company resources to achieve desirable short-term and long-term results. In assessing marketing effectiveness, there are four major dimensions that need to be considered namely, corporate, competitive, customers/consumers, and exogenous factors. The corporate dimension focuses on the size and financial capacity of the company to undertake marketing activities. The competitive dimension, on the other hand, centers on how competitors are likely to react or respond to their marketing activities. Competitive marketing information is an important commodity for this particular dimension.
Customer or consumer dimension, meanwhile, considers the need for a company to have a good understanding of how their customers make purchasing decisions. By achieving this, companies would be able to increase their marketing effectiveness. Lastly, exogenous factors refer to factors beyond the control of marketers that could potentially impact the effectiveness of marketing activities.
The level of marketing effectiveness could be improved by employing a marketing strategy that will prove to be more successful than that of one’s competitors. In addition, marketers could also make certain changes in their marketing execution by changing some of its marketing mix decisions without necessarily changing their strategic plans. The same could also be achieved by changing the company’s marketing infrastructure, which means changing the budgeting and agencies of companies, as well as promoting the coordination of marketing activities to gain desired results. Lastly, marketers should also be able to take advantage of certain factors beyond their control, like regulatory environment, seasonality, and interests that may influence the result of the marketing activities they undertake.