276 Strategic Marketing: Planning and Controlmanagement to optimise the process and take a strategic view. Typical
inputs include:
● Finance: Investment, working capital and cash.
● Operations: Capacity, usage, efficiency and application of machines,
systems and other assets.
● People: Numbers, quality and skills of staff.
Output is measured in terms of overall system performance. Performance
is derived from a combination of efficiency and effectiveness.
● Efficiency: How well utilised are the inputs? Do we make maximum
use of finance, minimise cost and operate at optimal levels of capacity?
● Effectiveness: Are we doing the right things? This relates to actual per-
formance and will include sales revenue, profit, market share and
measures of customer satisfaction.
Remember, it is better to pursue effectiveness. For example, a company
may be a very efficient producer (low cost, high volume, etc.) but rela-
tively ineffective at finding buyers for its goods.
Control systems can operate as simple feedback loops. Figure 14.1 illus-
trates the concept. However more sophisticated systems of feed forward
controlare possible.Input ProcessAdjust PerformanceActionPre-set
targetCompare MeasureOutputFigure 14.1
Feedback control
Such systems try to pre-empt problems by anticipating the effect of
input(s) on overall performance. However, such systems are more com-
plex and consequently more difficult to set up.
Figure 14.2 illustrates the application of a basic control loop to the mar-
keting management process. Here marketing objectives, such as increas-
ing market share, are translated into performance targets. These targets
define a specific measurable basis against which managers will be judged.
The objective of increasing market share would be quantified. For example,
we may aim at a 7 per cent increase over 12 months. Responsibility for
achieving the target is assigned and actual performance is evaluated
against planned performance. The adjustment of the process is achieved