How to evaluate the success of a marketing mix
Finding the right methods to evaluate the marketing mix is key to every firm's marketing strategy
Published by Rina Villaruel. .Planning Bestpractice Internationalisation SME International marketing International marketing
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Having discussed the definition of the marketing mix and its evolution within the various commercial strategies that a firm can use, it is necessary to look at the methods aimed at evaluating its own effectiveness. In order to meet marketing objectives, firms shall indeed establish a process to monitor the performance of each activity. This "control" phase can be carried out through various techniques, which consist of comparing what was intended to be done with what was actually done.
The most popular techniques in this regard are:
- Sales Analysis
- Market Surveys
- Cost Analysis
Numbers don't lie. A general look at the sales trend of one's own product/service provides important clues regarding the degree of achievement of sales targets. This allows to evaluate what has actually worked in a given period as well as to discover what needs to be changed to promote financial and/or brand growth. In addition, sales data testifies to the success or failure of marketing mix choices, becoming directly usable information for the firm. If you decide, for example, to change your pricing strategy to compete in a new market, you'll have a clear indication of how this affects sales, and you'll find out whether the decision to change the price really benefited a given firm. The same concept can be applied to the other elements of the marketing mix as well.
Conducting surveys of your target market is another strategic approach to determining the validity of your marketing mix. In fact, market surveys allow you to optimally acquire a series of information that are of fundamental importance for designing increasingly effective marketing mix strategies. In particular, they are:
- The purchasing behavior of the reference target;
- The impact of products and services on the market
- The effectiveness of product distribution;
- The effectiveness of a company's pricing policy;
- The effectiveness of promotional activities of products and services.
Surveys investigating the marketing mix are also an important tool for identifying which areas of the marketing mix are more structured than others, providing clues as to how to improve or adapt it to a specific audience, within a context of business planning with the four "P" at its center.
In order for a company to be certain that its business strategy really delivers value, benefits should outweigh costs. As a result, you need to look not only at the cost of the marketing campaign, but also at the average of how many customers actually spent within the store, whether physical or e-commerce. In a nutshell, it is important to understand if the cost for customer acquisition (cost per customer acquisition) is lower than the profit that that customer brings, at various times, in the company. Suppose that, thanks to a commercial on the radio, a given company acquires a good number of customers at a relatively low cost, and that sponsored campaigns on social networks cost more, bringing her decidedly fewer customers. If, however, the latter spend twice as much as those coming from the spot on the radio, perhaps it is necessary for the company to ask itself whether communication via radio really brings more benefits, in terms of profit, than the practice of Social Media Marketing.
To ascertain that the benefit brought is actually greater than the cost of acquisition of each customer can therefore offer some rather certain results for a company: in practice, the customer lifetime value, i.e. the profit that the customer brings to the company over its lifetime, must be greater than the cost per customer acquisition, which indicates how much was spent to achieve a single sale. Thanks to this formula it is possible to compare the various channels on which you are currently active and understand towards which ones to allocate the biggest budget.
For many companies, the 4P model constitutes a valid reference point upon which to base their marketing strategy. However, due to the dynamic nature of today's markets and the central role of the consumer, they are forced to provide quick and timely responses to new needs. Defining techniques that constantly evaluate their marketing mix can become a powerful tool for any business.