CHICAGO, March 14, 2013 /PRNewswire-USNewswire/ -- A survey of 439 U.S. managers and 1,287 product development and marketing decisions finds that firms can improve such decisions by encouraging use of 84 marketing and financial metrics through metric based compensation and training, and involving non-marketing managers in marketing decisions.
While several professional organizations (Journal of Marketing, Marketing Science Institute, Institute for Study of Business Markets) and practitioners surveyed in 2007 Deloitte and 2009 Lenskold/Market Sphere studies advocate greater need for metrics, there is no attention paid to why some managers use less metrics than others to evaluate product development and marketing decisions and whether use of metrics improves decisions.
In the American Marketing Association's Journal of Marketing's March issue, Mintz and Currim identify 84 marketing and financial metrics, survey 439 U.S. managers about 1,287 decisions on product development and nine marketing decisions (e.g., social media, traditional and internet advertising, direct to consumer, pricing and price promotions, sales force, distribution, and PR/sponsorships) and find two main results. First, managers metric use is not based on characteristics of the manager such as experience or level in the organization, but rather on factors such as firm strategy; metric based compensation and training; other characteristics of the firm (i.e., public vs. private, goods vs. services or B2B vs. B2C orientation); environmental factors (i.e., industry concentration and market growth); and the type of decision made. Second, the authors find that greater metric use is associated with better decision outcomes and that metric use can be encouraged by metric based compensation and training and involving non-marketing managers in marketing decisions.
Ofer Mintz and Imran Currim, professors at LSU and UCI, indicate: "If managers are looking to improve the performance of their product development and marketing decisions, they need to remember one simple equation -- more marketing and financial metrics equal better decision outcomes – and marketing and financial metric use can be encouraged by metric based compensation and training and the involvement of non-marketing managers in marketing decisions."
Mintz and Currim's Journal of Marketing study suggests that to improve the outcomes of product development and marketing decisions, firms should encourage managers to use more marketing and financial metrics by employing metric based compensation and training and involving non-marketing managers in marketing decisions.
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SOURCE American Marketing Association