Strategic Management: Formulation and Implementation

Other Measurement Techniques

Selecting the appropriate measurement technique is predicated directly on the performance factor to be measured. Several measurement techniques are discussed.

Marketing Oriented Measures

Five major categories of marketing performance measures and analysis can be distinguished:

* Sales analysis involves analyzing and comparing actual sales with sales goals.

* Market share analysis focuses on calculating and analyzing the relationship of a firm's sales volume to that of its competitors. Four basic markets share measures are: (1) overall market share, (2) share of target market, (3) share as percentage of combined sales of top three competitors, and (4) share as percentage of leading competitor.

* Marketing expense-to-sales ratios helps to ensure that the firm is not overspending to achieve its sales goals. The component ratios for overall ratio might include: sale force/sales, advertising/sales, sales promotion/sales, marketing research/sales, and sales administration/sales.

* Efficiency analysis is focuses primarily on controlling the efficiency of the sales force (e.g., the average number of sales calls per day, average revenue per sales call), advertising (e.g., the average cost per thousand customers reached, number of inquires per ad), sales promotion (the percentage of coupons redeemed and display costs per sales dollar), and distribution activities (cost per delivery and average number of deliveries per day).