Strategic Marketing Management

EXAM PREPARATION 3
STRATEGIC MARKETING MANAGEMENT

Question 1
Measure the marketing performance of an IT company, the developers of various
application Software and check how they formulate marketing strategy from the
feedback to the next year?
Ideally, marketing performance measurement should be a logical extension of the
planning and budgeting exercise that happens before a company’s fiscal year. Evaluating
marketing performance guides future marketing initiatives and helps a company achieve its
goals.
Importance of Marketing Performance Metrics
Marketing performance metrics or key performance indicators (KPIs) are useful not only for
marketing professionals, but also for non-marketing executives. From the chief executive
officer to the vice president of sales, the senior management team needs marketing KPIs to
gauge how marketing activities and spending impact the company’s bottom line. This is
particularly important since companies are prone to reduce marketing budgets during
economic downturns, downsizing, and mergers.
As marketers face more and more pressure to show a return on investment (ROI) on their
activities, marketing performance metrics help measure the degree to which marketing
spending contributes to profits. It also highlights how marketing contributes to, and
complements, initiatives in other areas of the organization, such as sales and customer
service.
Other reasons why companies evaluate marketing performance include:
 Monitoring marketing’s progress towards its annual goals

 Determining what areas of the marketing mix – product, price, place, and promotion –
need modification or improvement to increase some aspect of performance
 Assessing whether company goods, services, and ideas meet customer and
stakeholder needs
Establishing marketing performance metrics is integral to helping brands satisfy customers,

establishing a clear company image, being proactive in the market, and fully incorporating
marketing into the company’s overall business strategy.
Critically examine the benchmarking and the PIMS model as effective analytical tools
for developing marketing strategies?
BENCHMARKING
Benchmarking is the process of comparing business performance against certain reference
points. It is a popular and potentially powerful way to glean insights that can lead to
improved performance.
Benchmarking is a process of evaluation and analysis of different aspects such as

competitors’ products, methodologies or campaigns, whose objective is to implement
improvements that allow you to differentiate yourself from them. Benchmarking, is a
continuous process that will help to be up-to-date with the actions that the companies of
sector carry out and will allow to detect the aspects of strategy you are leaving in the
background and you could improve.
There are different types of benchmarking that can explore and perform to optimize and to
differentiate the company:
 Internal: it will help you to compare different areas of your brand leaving
the competitors aside.
 External: you will compare your brand with your competitors. It is very useful to
optimize your strategy and position yourself in the market.
 Functional: in this case, think globally and perform your analysis with respect
to sector in which you are, comprehensively.
 Integral: this type requires to carry out the previous analysis, but it is only
recommended if you have the necessary human and financial resources to perform it.
Three ways to use benchmarking
Benchmarking, whether internal or external, is used in three key ways. They are:
 Process benchmarking.
This is all about better understanding processes, comparing performance against internal and
external benchmarks, and finding ways to optimise and improve processes. The idea is that,
by understanding how top performers complete a process, you can find ways to make your
own processes more efficient, faster and more effective.
 Strategic benchmarking.
This compares strategies, business approaches and business models in order to strengthen a
company’s own strategic planning and determine strategic priorities. The idea is to
understand what strategies underpin successful companies (or teams or business units) and
then compare these strategies with your own to identify ways you can be more competitive.
 Performance benchmarking.
This involves collecting information on how well you’re doing in terms of outcomes and
comparing these outcomes internally or externally. This can also refer to functional
performance benchmarking, such as benchmarking the performance of the HR team (using
metrics like employee net promoter score or staff engagement surveys) or the marketing
team (measuring net promoter score or brand awareness, for instance).
PROFIT IMPACT OF MARKET STRATEGY (PIMS) MODEL

The Profit Impact of Market Strategy (PIMS) is a project that uses empirical data to
determine which business strategies make the difference between success and failure. It is
used to develop strategies for resource allocation and marketing. Some of the most important
strategic metrics are market share, product quality, investment intensity and service quality
(all measured by PIMS and strongly correlated with financial performance).
The main function of PIMS is to highlight the relationship between a business's key
strategic decisions and its results. The PIMS database can help managers gain a better
understanding of their business environment, identify critical factors in improving the
position of their companies, and develop strategies that will enable them to create a
sustainable advantage. PIMS principles are taught in business schools, and the data are
widely used in academic research. As a result, PIMS has influenced business strategy in
companies around the world.

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EXAM PREPARATION 3

STRATEGIC MARKETING MANAGEMENT

Importance of Marketing Performance Metrics

Other reasons why companies evaluate marketing performance include:

 Monitoring marketing’s progress towards its annual goals

Establishing marketing performance metrics is integral to helping brands satisfy customers,

Benchmarking is a process of evaluation and analysis of different aspects such as

Three ways to use benchmarking

Benchmarking, whether internal or external, is used in three key ways. They are:

PROFIT IMPACT OF MARKET STRATEGY (PIMS) MODEL

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