Marketing performance (lecture 1) Flashcards
What is marketing?
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large (AMA definition)
What is marketing performance?
Marketing performance refers to marketing productivity : Resources are deployed tp generate outcomes.
How marketing adds value for customers, the firm, shareholders, all stakeholders
In a broad sense: What is the impact of marketing?
What is the main reason for the study conducted in the article of Katsikas et al 2016 - Assesing performance outcomes in marketing?
Even tough linking a firm’s marketing with performance outcomes is curcial, there has been little/no research on how performance is conceptualized and measured
What is the research aim of Katsikas et al 2016?
Help researchers/marketers how we look at performance and conceptualize performance
What is operational performance (Katsikas et al 2016)?
Fulfillment of goals within different valu chain activity areas of the firm that may subsequently lead to organizational performance.
The economic outcoes resulting from the interplay among an organizations attributes, actions and environment.
Explain the model provided by Katsikas et al
Katsikas et al provide a model to conceptualize marketing performance. In the model 8 blocks can be defined. two of these blvoks are in the white area (Firm’s marketin resources, strategy and actions & Realized marketing programs) These two are the strategy and actions a firm undertakes in order to achieve marketing performance. In the red area, marketing performance is split up into 6 categories:
1. Customer mindset (how do customers feel about a brand) e.g. brand equity, perceived quality, satisfaction
2. Customer behaviour (e.g. retention, word of mouth, acquisition)
3. Product-market performance (How well does the product do. e.g. unit sales, market share)
4.Customer level performance (individual customer; how good is this customer e.g. proftiability, share of wallet, CLV)
5. Accounting performance (e.g. cash flow, profit, margin etc.)
6. Financial market perfoamnce (credit rating, can we pay back loans)
The marketing performance outcome chain can be seen as dynamic, because
- Firms reinvest financial resources they generate to build and maintain their marketing related resources and capabilities (reinvestment of earnings in the comapny again)
- Firms learn by going through the stages of the chain in ways that lead to adjustment to their selection and management of future marketing resources and marketing program actions
What are the critical issues that must be used in a framework for the conceptualization of performance?
- Theoratical rationale (why does an organization chose something, is it based on theory)
- Conceptual approach to treatment of performance (how performance construct is viewed theoretically and treated empirically)
- Aspects of performance assessed (6 categories of framework; customer mindset, customer behaviour, product-market performance, customer-level performance, accountng performance, financial-market performance)
- Referents of performance (standards against which performance is judged)
- Time horizon (Temporal perspective reflected in the outcome measure)
What are the different types of constructs?
Latent construct -> general conception of performance and assumes that its various elements are to large to extent linked (new product performance) als je meerdere items / indicators nodig hebt om één construct te meten
omdat het moeilijk, abstract en complex te meten is, dan is dat een latent construct
Seperate contruct -> distinct aspects exist, but theoretical arguments and empirical analyses pertain to specific aspects (cash flow)]
Aggregate -> well defined composite of mathematical combination of various performance items
als je zelf een schaal / score samenstelt om je succes te meten. Dit is
minder theoretisch dan latent.
What are the main managerial implications of Katsikas et al 2016?
- Managers should select at least one metric within each aspect of performance in the marketing-performance outcome chain based on perceived importance (one metric for each of the 6 categories)
- There are linkages between marketing efforts and the types of accounting/financial performance metrics. However some of these links are negative, thus improving one aspect might lead to degrade another
What is the main finding of the article by Vargo and Lusch (2004)?
Marketing is evolving to a New dominant logic
First there was the goods-dominant view (tangible output, discrete transactions) This has shifted to a Services-dominant view (intangibility, exchange processes, relationships)
Goods-dominant = Operand resources
Services-dominant = Operant resources
What is the difference between operant and operand?
Operand = resources on which operation or act is performed to produce an effect
Operant = are employed to act on operand resources
What is the effect of the new dominant logic?
Because of the shift from goods to services, a challenge arises. If products/services are seen as operant resources, then value is only created in use (co-create). This influences the way marketing perfomance is assessed; what is the impact of marketing actions on’; the firm; the market; all co-crestors; entire society?
What are the aspects of performance according to Katsikas et al?
- Customer mindset
customer perception of and attitudes towards the firm and its value offerings 🡪 customer satisfaction - Customer behaviour
observed customer purchase and post purchase behaviors pertaining to the firm and its value offering 🡪 customer retention - Customer level performance
economic outcomes for the firm of the behavior of individuals or groups of customers 🡪 share of customer wallet - Product market performance
erformance outcomes achieved (unit sales, penetration) in the marketplace in which the product is offered 🡪Market share - Accounting performance
financial performance outcomes specified in firms financial statements🡪 ROA - Financial market performance
erformance as reflected in stockholder or debtholder marketing 🡪 total shareholder returns
What are points of discussion within the article of Katsikas et al 2016, assessing performance outcomes in marketing?
- Many studies treat performance as a signle construct (very single minded about what is performance)
- Correlations between different performance indicators are likely to be low
- How can we generalize results from studies that use performance as a dependent variable (If everybody just uses whatever measure they like how do we generalize results?)
