MEASURES OF MARKETING SUCCESS: A COMPARISON BETWEEN SPAIN AND THE UNITED KINGDOM.

Transcription

1 MEASURES OF MARKETING SUCCESS: A COMPARISON BETWEEN SPAIN AND THE UNITED KINGDOM. Joan Llonch, Universitat Autònoma de Barcelona Rossano Eusebio, Universitat Autònoma de Barcelona Tim Ambler, London Business School Contact person: Joan Llonch Andreu Universitat Autònoma de Barcelona Departament d Economia de l Empresa Edifici B Bellaterra (SPAIN) Tel: (+34) Fax: (+34) joan.llonch@uab.es Track Chair: Global Marketing Strategy Type: Abstract

2 MEASURES OF MARKETING SUCCESS: A COMPARISON BETWEEN SPAIN AND THE UNITED KINGDOM. Joan Llonch, Universitat Autònoma de Barcelona Rossano Eusebio, Universitat Autònoma de Barcelona Tim Ambler, London Business School ABSTRACT: This paper replicates in Spain some UK research into the relative importance of categories of marketing metrics, e.g. financial and non-financial, customer and competitive. In Spain, respondents saw financial metrics as less important than their UK counterparts and they appeared to be more marketing oriented. In both countries the importance given to metrics categories were consistent with orientation. Spanish managers are more satisfied with the metrics they use to assess marketing performance. 1. INTRODUCTION Despite the importance of measuring a business performance, there is little research on the measures used to evaluate marketing effectiveness. The present research examines the differences in marketing metrics between the UK and Spain. Secondly, we identify antecedents and associations in marketing performance measurement. The research closely replicates Kokkinaki and Ambler (1999). 2. THEORETICAL FRAMEWORK Research points to a variety of marketing metrics (see Clark 1999; Ambler and Riley 2000; Davidson 1999; Meyer 1998). Kokkinaki and Ambler (1999) deduced that marketing activity measures can be summarised in six categories: financial measures, measures of competitive market, measures of consumer behaviour, measures of consumer intermediate, measures of direct customer, and measures of innovativeness. Of the antecedents that may influence the way of measuring marketing effectiveness, we focus on a key aspect of organisational culture: business orientation. We will consider two types: customer orientation and competitor orientation. From this we deduce two of our hypothesis:

3 H1: The greater the customer orientation, the greater the importance attached to customer-based measures of marketing effectiveness. H2: The greater the competitor orientation, the greater the importance attached to competition-based measures of marketing effectiveness. One potential consequence of measurement is its effect on business performance (Ambler and Kokkinaki 1997), and our third hypothesis is: H3: The importance accorded to measuring marketing effectiveness activity conditions the attainment of better business performance. 3. DESIGN OF THE EMPIRICAL INVESTIGATION For this research we conducted a postal survey which was as similar as possible to that in the UK. The survey was sent to 570 businesses of which 166 returned it, a response rate of 29.1% (UK 23.14%, Kokkinkai and Ambler 1999). The study of marketing success measures was based on the classification into six categories established by Kokkinaki and Ambler (1999). Customer orientation, CUSTOR, and competitor orientation, COMPOR, were evaluated on Narver and Slater s scales (1990). Business performance with a 5-position Likert scale on which respondents evaluated their companies performance in comparison with the competition. 4. RESULTS As Table 1 shows, the average satisfaction is 4.44 for Spanish businesses (UK 4.07), out of a maximum of 7. It is observed that these differences are very significant, so that we can state that Spanish managers are more satisfied with their metrics than the British.

4 TABLE 1 Degree of satisfaction with measures for marketing effectiveness Type Mean Standard deviation T test Goods Spain ** UK Services Spain *** UK Consumer Spain ** UK B2B Spain *** UK SMEs Spain UK Large Spain *** UK TOTAL Spain *** UK p < 0.05 **p < 0.01 *** Table 2 shows the mean values of the importance accorded by Spanish and British respondents to the various measures of marketing success. In the UK the most important criteria are financial measures, with an average of 6.51 out of 7, while in Spain the most important criteria are measures of consumer behaviour (5.68). TABLE 2 Importance of metric categories for assessing performance Mean Standard T test* deviation Financial measures Spain *** UK Competitive market Spain *** UK Consumer behaviour Spain ** UK Consumer intermediate Spain UK Direct customer Spain *** UK Innovativeness Spain UK p < 0.05 ** p < 0.01 ***

5 TABLE 3 Frequency of benchmarks used (valid percent, when measure category used). Spain-U.K. comparison with the chi-square test. 7 Previous year Marketing plan Specific competitor Other units in the group Spain UK Spain UK Spain UK Spain UK Financial *** ** *** Competitive market *** *** ** 6.6 Consumer behaviour *** 15.1*** 6.4 Consumer intermediate 52.4*** ** 15.1*** 5.1 Direct customer ** ** Innovativeness 34.3*** *** Chi-square test significance: * <0.10 ** <0.05 *** <0.01 For Spanish businesses the previous year is the principal benchmark (see Table 3). The principal differences appear in the use of the marketing plan to assess financial performance (85.1% of British respondents against 57.8% in Spainish). TABLE 4 Regression of measure category importance on customer, competitor orientation, business size and industrial sector (Spain). CUSTOR COMPOR SIZE SECTOR Variable If R 2 Competitive measures 12.82*** *** Consumer behaviour 13.36***.26.58*** ** Consumer intermediate 12.23***.24.57*** Direct customer 8.14***.18.29**.52***.31.63*** p<0.05 ** p< 0.01 *** Size: 0 (SMEs) 1 (Large) Industrial sector: 1 (Consumer) 0 (B2B) Table 4 shows the results of estimating models of regression. As can be observed, there is a positive and significant relationship between customer orientation and the importance accorded to customer-based measures. The first hypothesis is therefore verified. We found a positive and very significant relationship of 0.43 (UK 0.26) between competitor orientation and the importance accorded to measures of competitive market. Hypothesis 2 is therefore also verified. To test the third this hypothesis we regressed the importance of the various metrics categories on business performance. Although this proved significant in the UK, it did not do so in Spain and the hypothesis is not here supported.

6 5. CONCLUSIONS We found notable differences between Spanish and British managers in the way their firms assess marketing effectiveness. In particular, the results indicate a disparity in the importance given to metric categories in evaluating marketing performance. There are also differences in the types of benchmark used for comparison of marketing performance. Among Spanish businesses, the principal benchmark is the previous year, while in the U.K., the marketing plan is more often used. Spanish managers are more satisfied than the British with the metrics they use to assess marketing performance. Differences also exist in the associations between business orientation and the measurement of marketing effectiveness. Finally, the UK relationship between measurement, i.e. the use of metrics, and business performance was not replicated in Spain. REFERENCES Ambler, T. and D. Riley (2000) Marketing metrics: a review of performance measures in use in the U.K. and Spain, London: London Business School, draft paper, pp Clark, B.H. (1999) Marketing performance measures: history and interrelationships, Journal of Marketing Management, V. 15, pp Davidson, J. H. (1999) Transforming the value of company reports through marketing measurement, Journal of Marketing Management.V. 15, pp Kokkinaki, F. and T. Ambler (1999) Marketing performance assessment: an exploratory investigation into current practice and the role of firm orientation, Marketing Science Institute. Working paper No , Cambridge, MA. Meyer, M.W. (1998) Finding performance: The new discipline in management, Performance Measurement-Theory and Practice. V. 1, Cambridge, England: Centre for Business Performance, xiv-xxi. Narver, J.C. and S.F. Slater (1990) The effect of a market orientation on business profitability, Journal of Marketing. V. 54 (October), pp

7 Information about the autors: Joan Llonch Andreu is Associate Professor of Marketing. Universitat Autònoma de Barcelona (Spain). MBA (I.M.D. Laussane) and Phd (Universitat Autònoma de Barcelona -Spain). Rossano Eusebio is Assistant Professor of Marketing and Advertising. Universitat Autònoma de Barcelona (Spain). BA in Commerce (Università di Torino Italy) and Business (Universitat Autònoma de Barcelona Spain). Phd (Universitat Autònoma de Barcelona -Spain). Tim Ambler is Senior Fellow of Marketing. London Business School (UK). MA (Oxford-UK) and SM (Sloan School-MIT)