29 April 2003
Many large companies urgently need to streamline the measurement of their marketing spend, according to an article in the April edition of Insight, the email newsletter from CIMA.
In the last decade, increased marketing spend has led to increases in sales in only 50 per cent of cases. 80 per cent of all trade promotions are unprofitable.
One major UK brewer was, until recently, unable to say to within £5m how much it spent on promotional T-shirts.
According to the author of the article, Robert Shaw, director of the Marketing Value Added Best Practice Programme at Cranfield Centre for Business Performance, this is because marketing spending is not measured properly - leading to ineffective and wasteful campaigns.
Cranfield started research into marketing spending effectiveness in 1995, and in 1998 it established the Marketing Value Added Best Practice Research Club. Today the club has 20 members, including Diageo, Unilever, HSBC, Barclays, AXA, BT and Hewlett-Packard.
The research club has established three key themes and several practical steps that management can take, as follows:
Rigorously manage spending. Know what marketing spending buys. Cut back marketing waste. Reallocate and challenge spending.
Add focused analytical rigour. Define objectives and tasks. Establish a fact base. Raise standards and consistency of measurement. Test critical marketing hypotheses.
Gain credibility for marketing spending. Analyse cause and effect. Make evaluation transparent. Communicate marketing's value.
For the Marketing Value Added Club or the Cranfield Centre for Business Performance, visit www.cranfield.ac.uk/som/cbp.
If you would like more information please contact Lottie Muir
Phone: +44 (0)20 8849 2407
Email: lottie.muir@cimaglobal.com
Fax: +44 (0)20 8849 2458
