Business needs to see the benefits of marketing

THE Supreme Court versus marketing. Not an obvious association of ideas you might say

THE Supreme Court versus marketing. Not an obvious association of ideas you might say. Not an obvious introduction to an examination of how business measures the effectiveness of marketing programmes.

However, a recent Supreme Court decision gave a most telling "thumbs down" to one particular marketing programme.

Five judges ruled that an advertising programme, costing hundreds of thousands of pounds, was not proven to have materially affected the outcome of the Divorce Referendum.

The judgment was an indictment of the effectiveness of an advertising campaign costing £500,000. The campaign has been determined in law not to have influenced the outcome, of what was a very close result.

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Many will argue that the unique circumstances of this case make the judgement irrelevant to the real world of business. However, an important underlying point is being well made.

Marketing specialists cannot "cop out" of the process of measuring marketing effectiveness by claiming that marketing is too difficult, or too ephemeral, to measure.

Having made great claims for the importance of marketing as a business tool, it is hardly surprising that they are now being asked, to justify these in terms of the financial bottom line.

While recognising that we could be engaging in a chicken, versus the egg style of debate, the huge growth in "below the line" marketing can be seen as a response to the demand for measurability.

There has been a lot of discussion about the proportions of marketing funds that are spent "above the line" (media advertising) and "below the line" (direct, marketing/sales promotions).

The consensus is that you can get faster and more immediately obvious results from tactically" good sales promotion or direct marketing programmes than you, are likely to get from national media, image, brand building and advertising.

Sales volumes - before, during and after - a period of free offers, couponing or special value offers are clearly much easier to measure than, say, national advertising campaigns.

Organisations are also beginning to measure another increasingly popular area of marketing, activity sponsorship.

A recent survey has ranked the level of association that customers have for the sponsors of major Irish sporting events.

Perhaps surprisingly, the Benson and Hedges Snooker Championship tops the list. Opel's involvement with the Irish soccer team comes a close second.

It would be unfortunate, however, and would indeed be dodging the issue, if this above versus below the line debate were to be influenced by the easier methodology of the latter.

It is part of the received wisdom of management theory that hat gets measured gets done. But it can only take a small, but very erroneous, shift in logic for this to lead to measuring what is measurable, and, in turn, to doing what is measurable because it is measurable.

Professional marketers know what successful market planning requires an integration of the tactical with the strategic. The measurement imperative must not become the tail wagging the dog, shifting resources from where they are needed to where they are measurable.

This raises the question - how an we measure those marketing initiatives which have a strategic

Most leading businesses believe that investment in brand building is the key to creating long term customer loyalty and value added. So it is hardly surprising that measuring the long term effectiveness of marketing strategies is focusing on brand building.

Companies such as Waterford Crystal use tracking studies to determine customer response to their brand. This enables the company to rank their products in comparison to competitors and, vitally, to chart changes in that rank order.

Market share and profitability can then be correlated with this tracking study enabling positive and negative findings to be fed back into the loop in order to, reinforce, or reinvent, marketing strategies.

It appears likely that Bord Failte too will adopt a similar brand measurement methodology as it applies classical branding strategies to differentiate the Irish tourism product in the international marketplace.

The measurement of marketing cannot take place in isolation. Managements have to set business goals - such as greater profitability, growing market share, increased shareholder value - the achievement of which will be a mark of success.

The marketeer's input towards achieving these goals will be the segmentation of customers to identify profitable niches, the differentiation of products, and matching these to create and retain customer loyalty. Marketing plans will indicate how this is to be done.