Summary, Lectures & Articles - Marketing Performance: MAN-MMA025

OWN SUMMARY MARKETING
PERFORMANCE (LECTURES & ARTICLES)
Lecture 1 – Marketing Performance
Katsikeas et al. (2016)
The article is about assessing performance outcomes of marketing.
This article provides the roadmap for the entire course.


This course focuses on the organization; “What do marketing managers do?”.
The focus is NOT on the consumer (that is Consumer Behavior).
At the end of the course, you will have learned to:
- Assess the performance consequences of marketing actions and strategies
- Identify and discuss wider consequences of marketing (on a societal or systems level)
- Understand drivers of marketing performance


Marketing  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. So, marketing is about exchanging value with customers and other
stakeholders.
Next, it is very important to be able to measure your marketing successes. You want to know
what the impact of your marketing has been on all types of stakeholders (= marketing
performance). Stakeholders are customers, suppliers, shareholders, etc. Because there are so
many different groups, there are many different metrics to measure performance. (e.g. loyalty
measures, customer lifetime value, customer equity, online brand sentiment, etc.)

,KATSIKEAS ET AL. (2016) MODEL
(THE MARKETING-PERFORMANCE OUTCOME CHAIN)




The two white blocks are actions that the organization does. So the resources, strategy, and
actions the organization executes, lead to the realized marketing program. This in turn
leads to marketing performance. The 6 pink blocks are performance categories on the
marketing or individual level. All articles can be classified in one of these 6 pink blocks!
6 PERFORMANCE CATEGORIES:
OPERATIONAL PERFORMANCE:
1) Customer mindset  perceptions and attitudes towards the organization that
customers have (e.g. brand equity, customer satisfaction). Soft metric and therefore
hard to measure.
2) Customer behavior  purchase and post-purchase behavior (e.g. customer retention,
word of mouth)
3) Customer-level performance  economic outcomes that have to do with the
behavior of the customers (e.g. customer profitability, CLV). This allows you to
identify which customers the organization is performing well with.
4) Product-market performance  how the product performs in the market where it is
launched (e.g. unit sales, market share)

,ORGANIZATIONAL PERFORMANCE:
5) Accounting performance  financial outcomes that are stated in financial statements
(e.g. profitability, Cash flow, ROA). These figures are widely used and are also easy
to obtain via databases.
6) Financial-market performance  outcomes related to stock markets or debt markets
(e.g. shareholder returns, bond ratings, equity risk). This is where the money comes
from.


Operational performance    organizational performance
So: operational performance (when you execute your goals) leads to organizational
performance (that you get economic outcomes in return)


Reinvestment (in the Katsikeas model)  organizations reinvest their earned financial
resources back into their business to build and maintain their marketing and other resources
Learning (in the Katsikeas model)  organizations learn by going through the phases of the
Katsikeas model and thus making adjustments to their future marketing
resources/management/programs/actions


The Katsikeas et al. (2016) article discusses a framework to measure marketing performance
outcomes. Such a framework should include the following 5 elements:
1) Theoretical rationale  why does an organization choose something? To what extent
is it based on theory?
2) Conceptual approach (to treatment of performance)  a way in which researchers
view performance theoretically
3) Aspects of performance assessed  the 6 different categories discussed in the figure
with the chain
4) Referents (of performance)  the standard with which the performance is compared
and thus it is determined what the performance is
5) Time horizon  the time in which the performance is measured
The Katsikeas et al. (2016) article distinguishes approximately 1000 studies. This shows that
many different performance outcome measures are used, making it difficult to compare
findings from different studies.
Latent construct  if you need multiple items to measure one construct because it is
difficult, abstract, and complex to measure
Aggregate construct  if you create a scale/score yourself to measure your success. This is
less theoretical than latent
CONCLUSION ARTICLE:

, Many studies approach performance as a single construct (with only 1 measurement, or a
latent variable without looking at the correlations between the indicators). As a result, there is
little correlation between the indicators. It is then difficult to compare results from different
studies, because they measure it very differently. Tip: all 6 categories of the chain of
performance must be used when measuring marketing performance.


OPERANT VS OPERAND
Operant  relationships, services (intangible)
Operand  products & goods (tangible)
Vargo and Lusch (2004) state that marketing is increasingly about relationships, intangibles,
and especially services (operant). It is no longer only about products and goods (operand).
Conclusion: Operant resources are based on operand resources. Operant resources are needed
to really make a difference. This is how you distinguish your service or product from others.
Products that are seen as operant resources are created together with the customers (co-
creation). This change makes it more difficult to map the marketing performance of an
organization.