01 Introduction

Question 1

What is the big picture framework?

Answer 1

Question 2

What are two Marketing’s threats?

Answer 2

1. Lack of accountability undermines marketing’s credibility and standing in the firm
2. Marketing productivity is underestimated and therefore often misjudged

Question 3

What are 4 challenges in measuring marketing productivity?

Answer 3

1. Relating marketing actions to long-term effects
2. Separating individual marketing activities from another
3. Non-financial metrics are needed to determine marketing’s effect
4. Boards and similar focus on cash flows not revenues

=> “What you can’t measure, you can’t manage!”

Question 4

Name 6 reasons why understanding marketing profitability is important.

Answer 4

1. Marketers are pressured to demonstrate marketing effects
2. Customer insights are still rare despite the data available
3. Need to predict performance of strategic marketing actions
4. Need to value intangible assets in M&A
5. Marketers have to present to CFO or board or want to increase their influence
6. Managers are evaluated based on their performance against some target

Question 5

Name and explain 2 reasons why firms become interested i marketing profitability

Answer 5

1. Because they can: New technology and information sources lead to opportunities for marketing decision-making
2. Because they must: Changing competitive environment forces firms to revise their marketing decision-making
   
   • Diffusion of technology (shorter product life cycle, Big Data
   • Globalization and deregulation threaten competitive advantage
   • Increasing customer sophistication, demand and power

Question 6

3 ways how to prove that marketing is successful

Answer 6

1. Demonstrate cause-and-effect
2. Correlate marketing activities to performance measure
3. Stories of marketing success