JeļenaŠALKOVSKA–lecturerattheUniversityofLatvia,FacultyofEconomicsandManagement.Researchareas:marketingmanagement, integratedmarketing communications, supply chainmanagement. Phone:+37129615933.E-mail:jelena.salkovska@lu.lv.ElīnaOGSTA–graduatestudent,UniversityofLatvia,FacultyofEconomicsandManagement.Researchareas:marketingmanagement,marketingperformancemeasurement,marketingmetrics.Phone:+37126587964.E-mail:elinaogsta@gmail.comE-mail:elinaogsta@gmail.com.

ISSN 1392-1142 (Print), ISSN 2335-8750 (Online) ORgANIZAcIJų VADYbA:SISTEmINIAI TYRImAI 2014.70http://dx.doi.org/10.7220/mOSR.1392.1142.2014.70.7

Quantitative and Qualitative Measurement Methods of Companies’ Marketing Efficiency

Nowadays, due to ever-changingmarket conditions, increasingly globalmarket place, and consumer em-powerment,oneofthemainmeansofmarketingaccountability,assessmentandcommunicationofspecificmarketingandbusinessobjectivesincompaniesaremarketingmetrics.Theauthorsofthisresearchattemptacriticalevaluationofmarketingmeasurementmethodsbyelaboratingaconceptualframeworkofmarketingmetrics,marketingefficiency,effectiveness,andperformancefromliteraturereview,aswellasimplementa-tionofmarketingmeasurementtoolsinLatvianenterprisesinordertogainanoverviewofcurrentmarketingmanagementissueregardingpracticalmarketingassessment.Theresearchpapercontainstheresultsofre-searchofthemarketingmeasurementpracticeinLatviancompanies,conductedundertheauthors’guidanceinMarch,2014.Keywords: marketingmetrics,marketingefficiency,marketingeffectiveness,marketingperformancemea-surement,marketingmeasurementmethods.

Dėl nuolat kintančių pasaulinės rinkos sąlygų ir vartotojų išprusimo, viena pagrindinių šiandieniniųpriemonių, leidžiančių įvertinti įmoniųpardavimoatskaitomybę,konkrečiusprekybos irverslo tikslusyrarinkodarosrodikliai.Šiotyrimoautoriaibandokritiškaiįvertintirinkodarosvertinimometodus,remdamie-siliteratūrosapžvalga,siekiaparengtirinkodarosrodikliųefektyvumo,veiksmingumoirpanaudojimokon-cepcijosmodelį,taippat,tiriantrinkodarosvertinimoįrankiusLatvijosįmonėse,siekiaišanalizuotipraktinįrinkodarosvertinimą.StraipsnyjepateikiamipraktiniorinkodarosvertinimoLatvijosįmonėse2014m.kovomėnesįatliktotyrimorezultatai.Raktiniai žodžiai:rinkodarosrodikliai,rinkodarosefektyvumas,rinkodarosveiksmingumas,rinkodarosvei-klosvertinimas,rinkodarosvertinimometodai.

Jeļena ŠAlKovSKA Elīna ogStA

Introduction

Though increasinglymore companies rec-ognize the importance of marketing insuccessfulbusinessplanningandprogress,yet in many cases strategic marketingplanning and implementation in business

environment is endangered by myopicmanagement(Jeffrey,2010)orlackofdelib-erative planning and carefully chosen andtailoredsetofmarketingactivitiesortools.Myopic management originates the de-mandsfortangibleassetsandfinancialeval-uationofmarketingactivitiesandfastreturn

Jeļena ŠAlKovSKA, Elīna ogStA92

oninvestment(ROI)or,morespecifically,returnonmarketing investment (ROMI).Common viewpoint considers marketingas costs, although these expenses shouldbetreatedasmedium-termandlong-terminvestments; thisaspect showsoneof themain marketing problems – economicjustification. Even if topmanagement in-creases marketing investment, marketerskeep struggling with delivery of tangiblemarketingresultsbacktotheboardroom.Nowadaysmarketersfacemanychallengesin an increasingly complex marketplaceand addressing the wide range of stake-holders–prospects,customers,sharehold-ers, partners, and vendors (Gao, 2010).Therefore the scientific problem of thisresearch is: which marketing efficiency,effectiveness, and performance aspects atcompanies in Latvia are being evaluated,measured,andbroughttoattention.Defin-ingthevalueandmanagementofeachas-setisacriticaltaskandanimportantsteptowardtheimprovementofthereturnonmarketing investment(ROMI)whichcanandshouldbeachievedwithappropriatelychosenmarketingmetrics andmarketingefficiency measurement methods as it isthenpossibletoevaluatewhethermarket-ingactivityplaysaroleindrivingbasesalesevaluation(Chain,2011).

The aim of the article is to analysevariouslevelsandcategoriesofmarketingmeasurement methods, grounding thisanalysis in literaturereview,aswellastostudythecurrentstateofmarketingmeas-urementpracticeinLatvianenterprises.

Tasks of the researchare:1. Toconsiderthepointofmatterof

marketingmeasurement,marketingmet-rics, marketing efficiency, effectivenessandperformance;

2. TosurveyrepresentativesofLatviancompaniesaboutmarketingmeasurement,

offeringtoevaluate57marketingmetricsand the usefulness of eachmetric in in-dividualstrategicbusinessandmarketingplanningandrealizationsituation;

3. To evaluate the overall usage ofmarketingmetrics inLatvianenterprisesandtomarkoutthewidelyusedandrare-lyusedmetrics;

4. TodevelopthepossiblegroundforimprovementofmarketingmeasurementstrategyofLatviancompaniesinordertogainmarketingaccountabilityandbetteroverallcompetitiveadvantage.

The research object: quantitativeand qualitative marketing measurementmethods.

Research objectives: the currentstate of marketing measurement imple-mentation in Latvian companies andthe assessment of marketing managers’knowledge of variousmarketingmetricswithinmarketingmanagement and con-trolprocesses.

Research methods:literatureanalysis,quantitative research, survey method –questionnaire of marketing representa-tivesofLatviancompanies.

During the research the authors fo-cusedondifferentcategoriesofmarketingmetricsthathelpedtomeasuremarketingperformance and marketing efficiency.Theauthorsalsoanalyseddifficultiesthatarelinkedwiththeusageofsuchmetricsandmethods,which are stemming fromthe lack of knowledge or ability to sub-stantiatetothemanagementtheneedforsuch metric usage, thus eliminating thedangerofmyopicmanagementthataimsmostlyonshort-termgoals.Thetaskwasto ground the researchonLatvian com-paniesandtheirpractice,thusenablingafurtherpropositionofpossibleoptionsfortheusageofmeasurementmethodsindif-ferentindustries,markets,andamountof

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 93

marketinginvestments,alsotoshowhowrelevantitcanbetobusinessandmarket-ing strategymeasuringnotonly tangibleperformance indicators, but also non-financialones.

Theresearchhaspracticalvalue–ital-lows evaluating current situation, drawssuggestionsforfurtherresearch,andhelpsmarketers to gain more knowledge anddemonstratemarketingefficiencyandef-fectivenesstostakeholders.

Marketing measurement methods – marketing metrics

Ametric is a performance measure thatthecompany’smanagementshouldreviewandevaluateonregularbasis in themostsuitable way. Mostly marketing metricsaredefinedasstrategicallydesignedsetofmarketing measurement and evaluationmethods (Table 1). Usage of marketingmetrics is consideredbeingan important

part ofmarketing evaluation and controlprocess (Cravens, Piercy, 2003; Kumar,2004;Farrisetal.,2010;Jeffrey,2010);met-ricsshouldbedynamicandevolvealong-side business developments (McDermott,2013). Great importance lies within un-derstandingthatmetricisnotjustanotherwordformeasure:metricsshouldbealwaysrelevant,precise,consistent,andsufficientforreviewpurposes(Ambler,2002).

Thesignificanceofmarketingmetricsarises from the expectation that a com-panywillprosperifithasawellandcleardefinedstrategyandbusinessmodel,thusmarketing metrics are strategically im-portant for progress assessment. Theyserveas indicatorsof futurecashflowinthemarket,aswellasofthecurrentcashflow.Marketingmetricsarehelpfulinfu-turemarketing and business plan devel-opment, by evaluating previous market-ingactivitiesanddesigningnewones.

Alsotheimportanceofmarketingmet-ricsandthedatasuchmetricscanprovide

Table 1Definitions of marketing metrics

No. Authors Definition

1. T.Ambler(2000)

Market(ormarketing)metricsarearangeofmeasuresofdifferentaspectsofbrandstrengthandmarketingperformancewithaimtoalignmeasurement(andbehaviour)withstrategicgoals,tomakemarketingmoreaccountable,andtoprovidediagnosticinformationfortopmanagementdecisionmaking.

2. R.Shaw, D.Merrick(2005)

Marketingmetricisanumericalsummaryofobservationscarriedoutonaregu-larbasisaccordingtoagreedstandardsofobservationandmarketinganalysis.

3. P.W.Farrisetal.(2010)

Ametricismeasuringsystemthatquantifiesatrend,dynamic,orcharacteristic.Marketersrequiremarketingmetricsinordertojustifyinnumerictermsthefinancialrisks,benefitsofdecisions,toevaluateplans,explainvariances,judgeperformance,andidentifyleveragepointsforimprovement.

4. y.Gao(2010)Theperformanceindicatorsthattopmanagementuse(orshoulduse)totrackandassesstheprogress–specificallythemarketingperformance–ofabusinessorbusinessunit.

4. Marketo,Inc.(2011)

Marketingmetricsareusedinameasurementsystem,usedbymarketerstotrackandmeasuretheimpactofallkeymarketingactivities,bothhardandsoft.

5. Ph.Kotler,K.L.Keller(2012)

Marketingmetricsisthesetofmeasuresthathelpsmarketerstoquantify,com-pare,andinterprettheirmarketingperformance.

Source: the authors’ summary.

Jeļena ŠAlKovSKA, Elīna ogStA94

to marketers and managers lies withincognition that nowadaysmarketers alterbudgets fromtraditional todigital chan-nels, they need to be able to determinethe optimal spend acrossmultiple chan-nels in order to bemore accountable tothe topmanagement.With theability tomeasure,marketingcanhaveanaccount-ingvalue(McDermott,2013).Thisfactorenablesmarketers to translatemarketingcosts into associated revenue; by break-ing down each marketing channel mar-keterscanlookatpastreturnsfrompastmarketingactivitiesandsetnewgoalsforreturnonmarketinginvestment(ROMI)theyhopetoachievefromgoingforward.When linking marketing to shareholdervalue and financial performance, mar-keters cannot afford to forget to balanceindicatorsofpastfinancialhealth–finan-cialmetrics–andindicatorsofpotentialfinancialhealth–marketingmetrics(Ku-mar,2004)

Althoughmarketingmetricsaregain-ingmore attention as an important partof marketing measurement and evalua-tionprocess,anddespitecontributionsonthe subject marketing metrics research-ers (Bonoma,Clark,1988;Ambler,2000,2002; Rust et al., 2004; Barwise, Farley,2004;Moeller,Landry,2008;Farrisetal., 2010), the marketing performance andmarketingefficiencymeasurementstudiescouldbeexpandedbyofferingstructuredprocessorframeworkfororganizationofthemarketingmeasures.Marketingmet-rics researchers offer various ways howto categorize these measurement meth-ods and point out mostly used metrics(Table2).T.AmblerandD.Riley (2000)identified the 19most widely usedmet-rics for internal evaluation of marketingperformanceandbrandequity;M.Jeffrey(2010) suggests to concentrate on as few

metricsaspossible thatcapture themostvalueformarketingandheproposes15es-sentialmarketingmetrics;P.W.Farrisetal.(2010)offer11maingroupsofmorethan50marketingmetrics, characterizedwithcentralissuesaddressedbythesemetrics.

Ifweexamineeachmarketingmetricandtheinformationitprovidesforacom-pany,thewaysuchinformationshouldbetreated, marketing metrics can be char-acterized as quantitative (hard metrics)and qualitative (soft metrics), thus theauthors propose following classificationofmetrics:

1. Quantitative marketing meas-urement metrics–evaluatestangibleas-setsandcanbemoreeasilyexpressed inmonetary value, count, percentage. Suchmetrics are: customer count, sales, grossmargins,profitability,marketshare,pene-tration,netprofit,economicprofit(EVA),netpresentvalue(NPV),payback, inter-nalrateofreturn(IRR),impressions,costperclick(CPC),netreach,baselinesales,promotion lift, customer lifetime value(CLV),etc.

2. Qualitative marketing measure-ment metrics –evaluatesintangibleassetswhichoverthelast40yearshavebecomemore significant as drivers of marketvalue (Ocean Tomo, LLC, 2011). Thesemetricsindirectlyderiveatvalue;valueisnotalwaysaboutmoney,instead,itisalsofocusedaroundconsumerreactions.Suchmetricsare:loyalty,awareness,likeability,satisfaction,wordofmouth(WOM),will-ingness to search, willingness to recom-mend,perceivedquality,etc.

There are many metrics for market-erstochoosefromandtheymustkeepinmindthatthereisnotaone“golden”met-ricorevenagroupofsuchmetrics,suita-bleforallcompaniesandallbusinesssitu-ations.Differencesinformsofmarketing

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 95

Table 2Metrics categorization by competent researchers

Researchers Metrics categories Main marketing metrics

T.Ambler,D.Riley(2000)

1.Consumerintermediate

1.Awareness;perceivedquality;consumersatisfaction;rele-vancetoconsumer;perceiveddifferentiation;brand/productknowledge.

2.Consumerbehaviour 2.Numberofnewcustomers;loyalty/retention;conversions.3.Tradeconsumer 3.Customersatisfaction;numberofcomplaints.4.Relativetocompetitor 4.Relativeconsumersatisfaction;perceivedquality.

5.Innovation 5.Numberofnewproducts;revenueofnewproducts;marginofnewproducts.

6.Financial 6.Sales;grossmargins;profitability.

N.Kumar(2004)

1.Products 1.Relativeproductquality;perceivedproductquality;percen-tageofsalesfromnewproducts;productprofitability.

2.Brands 2.Brandawareness;brandesteem;brandloyalty;brandprofitability.

3.Channels3.Channelpenetration;channeltrust;channelefficiency;marketshareineachchannel;channelprofitability;shelfspace.

4.Customers,segments4.Customersatisfaction;averagetransactionsize;customercomplaints;customeracquisitioncosts;customerretentionrate;customerprofitability.

5.Markets 5.Marketpenetration;marketshare;salesgrowth;marketprofitability.

P.W.Farrisetal. (2010)

1.Shareofhearts,mindsandmarkets

1.Awareness;knowledge;hierarchyofeffects;loyalty;willin-gnesstorecommend;marketshare;brandpenetration,etc.

2.Marginsandprofits 2.Unitmargin;channelmargins;contributionperunit;targetvolume;break-evensales,etc.

3.Productportfoliomanagement

3.Repeatvolume;penetration;cannibalizationrate;brandequity;conjointutilities;volumeprojections,etc.

4.Customerprofitability 4.Customers;retentionrate;customerlifetimevalue,etc.5.Salesforceandchan-nelmanagement

5.Sales;salespipeline;markdowns;workload;compensation;salesforceeffectiveness;totaldistribution,etc.

6.Pricingstrategy 6.Pricepremium;reservationprice;percentgoodvalue,etc.

7.Promotion 7.Baselinesales;incrementalsales;promotionlift;redemptionrates,etc.

8.Advertisingmediaandwebmetrics

8.Impressions;costperclick;click-throughrate;netreach;averagefrequency;costper1000impressions,etc.

9.Marketingandfinance

9.Netprofit;returnoninvestment(ROI);economicprofit(EVA);netpresentvalue(NPV);returnonmarketinginves-tment(ROMI),etc.

M.Jeffrey(2010) -

Brandawareness;test-drive;churn;customersatisfaction;takerate;profit;netpresentvalue(NPV);internalrateofreturn(IRR);payback;customerlifetimevalue(CLV);costperclick(CPC);transactionconversionrate(TCR);returnonadvertisingmoneyspent(ROA);bouncerate;wordofmouth(WOM).

Source: the authors’ summary, with reference to T. Ambler, D. Riley (2000), N. Kumar (2004), P. W. Farris et al. (2010), M. Jeffrey (2010).

Jeļena ŠAlKovSKA, Elīna ogStA96

tools, channels and messages used andtheway they have been usedmaymakeharder application of different metrics,but for better marketing management,implementation,andcontrolauthorssug-gest that companies should apply bothquantitative, and qualitative marketingperformancemeasurementmethodswithpast, present, and future (desirable)per-formanceassessment.

N.Kumar(2004)pointsoutthecorpo-ratenatureofmarketingmetricsaschar-acteristic, common in large enterprisesand companies by saying “Corporatemarketing can influence the definitionoftherelevantmarketingmetricsateachof the five levels of business (products,brands, channels, customers, markets)andensurethateachdivisionandcountrytracks,collects,andreportstheappropri-ate metrics using a commonmethodol-ogy so that executives cancomparedataacrossthefirm”(Kumar,2004).Neverthe-lessmorerecentlyresearchershavepoint-edoutthatdifferentmetricscanbeusedinvariouslyprofiledcompanies forwiderangeofpurposeswithinmarketing-mixmodel–differentmedia(social,print,tel-evision, etc.), marketing activities (cam-paigns, promotions, sponsorships, etc.),channels and so on (Farris et al., 2010;

Smit,Neijens,2011;Flores,Struyk,2012;Bauer Marshall, 2013; Bhattachary, Me-hta,2013).Alsothestudyofcurrentsitua-tioninLatviashowsthatsuchmetricsaregainingincreasingacknowledgementandareusedeveninsmallcompanies,aswellasinmediumfirmsandlargeenterprises,althoughsomegapsinmarketers’andex-ecutives’knowledgecanbenoticed.

Theauthorsofferthereadersareviewofmarketingefficiency,effectiveness,andmarketing performance definitions andcharacterizations in order to gain betterunderstanding about these different as-pectsofmarketingmanagementandim-plementationprocess.

Over the time marketing efficiency,effectiveness, and performance have at-tractedgreatdealofattentioninacademicliterature and within managerial staffof companies. Marketing literature andother publications on marketing issuesaddress these concepts in various ways(Tables3and4).

As it has been pointed out in litera-ture, marketing must focus on deliver-ingeffectiveefficiency:deliveringgreatervaluetocustomersandthecorporationatlowercost (Sheth,Rajendra,2002).Bothefficiencyandeffectivenessarecriticaltomarketingperformance.

Table 3Definitions of marketing efficiency

No. Authors Definition

1. T.Ambleretal.(2001) Theratioofresultstoresourcesused,e.g.returnoninvestment.

2 R.Shaw,D.Mer-rick(2005)

Marketingefficiencyisusuallymeasuredasaratioofoutputstoinputs,forexample,directmailresponserateisameasureofefficiency.

3. y.Gao(2010) Doingthingsright.Comparisonsofoutputfrommarketingtoinputofmarketing.

4. Marketo,Inc.(2011)

EfficiencyismorelikelytoproducequestionsfromtheCFOandotherfinanci-ally-orientedexecutivesthaneffectiveness;efficiencymarketingmetricswillbenodefenceagainsteffortstoprunemarketingbudgetindifficulttimes.

Source: the authors’ summary.

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 97

Marketing performance is character-ized as a multidimensional process thatincludes the three dimensions of effec-tiveness, efficiency and adaptability; theeffectivenessandefficiencyofanorgani-sation’s marketing activities with regardtomarket-relatedgoals,suchasrevenues,growth,andmarketshare(Gao,2010).Tounderstandmarketingperformance,mul-tiplemeasures are needed becausemar-ketingperformancepertainstocustomeracquisitionandretentionwhichisoneofthemainbusinessobjectivesformajorityofcompanies.

Research – usage of marketing metrics in companies in Latvia

Inordertogetaninsightintomarketingmetricsapplicationpracticeandtomake

observationsandfindcoherencebetweenother business aspects such as numberof customers,marketing budget, growthrateinsalesetc.inLatviancompanies’,inMarch2014thesurveywasconductedbyhanding the questionnaire personally byauthors,aswellasbysendingtheonlinequestionnaireto796marketingspecialistsofLatviancompanies;themajorpopula-tion of the research span 11 966 small,mid-sizedandlargebusinesses(StatisticalEnterpriseRegister,2014).

104 responses were received, a re-sponserateof13.1%.Representativesofcompanieswerechosenbysimplerandomsamplemethodfromdatabases.Thesam-ple of respondentswas intended as rep-resentativeoffullrangeofindustrialsec-tors,but,asresultsshow,someindustrieswerecoveredmorethanothers(e.g.retail,wholesale,andservices,financialservices,

Table 4Definitions of marketing effectiveness

No. Authors Definition

1. T.Ambleretal.(2001) Theextenttowhichmarketingactionshavemovedthecompanytowardsitsgoals.

2. T.Ambler(2004)Marketingeffectivenessisthequalityofhowmarketersgotomarketwiththegoalofoptimizingtheirspendingtoachievegoodresultsforboththeshort-termandlong-term.

3. F.T.Mavondo(2005)Theabilityoftheorganisationtomeetshort-termgoalsthatmightpositi-velyimpactfinancialperformancesuchasincreasingmarketshare,incre-asingsales,improvinggrossmargin,successfulnewproductintroduction.

4. N.G.Nwokah, A.I.Ahiauzu(2008)

Theextenttowhichanorganisationacquiresmarketshareovercompeti-tors,advertisingandpromotionalshareofthemarket.

5. N.G.Nwokah, A.I.Ahiauzu(2009)

Functionofimprovinghowmarketersgotomarketwiththegoalofopti-mizingtheirmarketingspendtoachieveevenbetterresultsforboththeshort-termandlong-termobjectives.

6. y.Gao(2010) Doingtherightthing.Comparisonsofperformancetothegoalsformula-tedfromthemarketstrategy.

7. R.Pramaniak, G.Prakash(2010)

Rationamongdifferencebetweenconsumerspriceandproducersprice,andmarketingcost.

8. Marketo,Inc.(2011) Effectivenessconvincessales,financeandseniormanagementthatmarke-tingdeliversquantifiablevalue.

Source: the authors’ summary based on I. Daukševičiūtė et al. (2011).

Jeļena ŠAlKovSKA, Elīna ogStA98

informationtechnologies,foodanddrinkmanufacturing).

The questionnaire addressed the fol-lowingcoreissues:

1. The characteristics of companies(industry,marketsbyterritory,whatcom-panyoffers tomarkets andwhat charac-terizestheircustomers);

2. Usage of internet communicationchannelsandsocialmedia;

3. Evaluation of importance for busi-nessmanagingandmonitoringof57mar-ketingmetrics,giveninnoparticularorder;choices – very important, important, notsure,notuseful,metricisnotusedatall;

4. The changes in customer countoverthelastyear;thechangesinmarket-ingbudgetoverthelastyear;thegrowthrateinsalesoverthelastthreeyears;

5. Marketing planning, implementa-tion and evaluation and managing per-sonnel (marketing activities are plannedforwhatperiodof time;howoftenmar-keting audit is performed; who is plan-ningmarketingactivitiesincompany?).

Maintrendsandinformationderivedfromthesurvey–34%ofallrespondentsrepresented large companies (character-ized as companies with more than 250employees);27%–mid-sized(50-249em-ployees);24%–smallbusinesses(10-49employees),and14%representedmicro-businesses(upto9employees).Themostrepresentedindustriesintheresearcharetrade and services (31 %) and financialservices (16%).47%ofrespondentsof-fercustomersbothproducts,andservices;54%dealswithbothbusiness,andprivatecustomers. The most common internetcommunication channels are company’sweb page (32 %) and Facebook (23 %);15 % of Latvian companies use Twitter,but3%said that theydonotuseanyofinternetcommunicationchannels.

Given the possibility to choosemorethan one option, respondents indicatedthat most of the companies operate inLatvia(32%);onlyincapitalRigaoperate15%ofrespondents;Europe–18%;CIScountries – 14%; 11% of the respond-entcompaniesoperate inglobalmarkets(mostofthemareglobalcompanieswithfranchises or agencies in Latvia); 3 % –Asia;7%arerunningtheirbusinessesinregions of Latvia, majority of them aremicro-companies. These results allowconcluding that companies in Latvia areoperating in different markets, they areadaptive todifferentscopesandthus theneed for marketing efficiency measure-mentmethodsshouldbeapprehended.

Theresearchclearlyshowsthe impor-tance for companies in Latvia to meas-ure mainly financial performance, moreconcentrating on tangible assets like cus-tomers, net profit, return on sales, etc.(seeFigure1).Frommarketingmetricsthatmeasureintangibleperformancemeasures,highlyevaluatediscustomersatisfaction–correlationexistsbetweenservicecultureinLatviaoverallascustomerserviceiswidelyappreciated and encouraged (e.g. everyyearMarchisServicesAwarenessmonth),thusitiswidelyacknowledgedthatthebestservicecompaniesinLatviatendtothriveandgainbetterreputationwhich leads tobettersales,greatermarketshare,superiornetprofit,andothercritical tobusinessessetsofmeasures.Studyalsoindicatesthatcompanies in Latvia tend to assess cus-tomers’willingness tosearchandwilling-nesstorecommend–twometricsthatarealso linkedwithbrandand/ornewprod-uctdevelopmentpossibilities,presentandfuturecashflows.Thesemetricscantellacompanymuch about the attitudes of itscustomersandwhetheritspositioninthemarketisdefensibleagainstpressurefrom

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 99

competitors; if customer is satisfied witha product, customer ismore likely goingtorecommendit tofriends,relatives,andcolleagues, thus increasing the competi-tiveadvantageofacompany(Farrisetal.,2010).

Regardingsocialpresenceviavariousinternet communication channels andtools, it can be assumed that companiesacknowledgetheneedforsocialpresence,butnotsomanyofthemevaluatethefi-nancialvalueaddedtobusinessfromus-ageofsuchcommunication,forexample,the impact of word of mouth (WOM);neverthelessthisaspectmaybeaddressedin further studies.There are elements ofthemarketing and communicationsmixthat doprovide rich customer-level dataand return on investment. Social mediaprograms are highly targeted, measur-able, and effective, but company shouldnot rest of marketing tools just becausetheyseeminglydonotprovidereturnoninvestment.As study shows,many com-panies inLatvia focusondifferentsocialandinternetplatformsastheirmarketing

communication tools, but not so manycompaniesrealizestheimportanceofso-cialpresence,andthereforeitisnotmeas-uredinanyway.

Figure 2 shows the most confusingmarketing metrics for Latvian market-ing specialists,managers and executives,thesemetrics arenotused incompaniesat all or respondentshave indicated thattheyarenotsurewhethersuchmetric isimportant for their marketing perform-anceassessment.Therealproblemmightbethatmostcompaniesstruggletodrawconclusionsfrompositiveresultsinintan-gible asset studies from their market totheirbusinesses.

Marketing efficiency and companyperformance are assessed better if mar-keting metrics complement traditionalfinancialmetrics.Particularly,marketingmetrics can work as leading indicatorsof problems, opportunities, and futurefinancialperformance. Study shows thatin 70% respondent companies over thelast year have acquiredmore customersand thus have the opportunity to gain

60 61 60 63 54 5336

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Fig. 1. Marked out as most widely used marketing metrics in Latvian companies

Source: according to the results of the survey carried out by the authors in March 2014.

Jeļena ŠAlKovSKA, Elīna ogStA100

better competitive advantage, but at thesametimemarketingbudgethasnotbeenalignedtotheexpandingcustomerbase,leadingmarketerstoworkwithlargercus-tomerscopewiththesameornotequallyincreased budget. Figure 3 shows thepercentageofthebestbusinessperform-ances and the link between marketingbudgetandgrowthrateinsalesinLatviancompanies.Thecoherencebetweentheseindicators may be treated as marketingspecialists’abilitytospendlessandcreate

greatervalue;aswellastheirinabilitytosubstantiateneedforincreasedbudget.

Themajorquestions tobe frequentlyasked in order to assess the marketingperformance and efficiency are given inFigure4.Marketingspecialistsmusthaveclear answers to thesequestions, analyz-ing such aspects frequently and system-atically. Itwillhelp tochooseadequatelymarketingmetrics that canwork for in-dicatingandtreatingissuesthatendangertheoverallhealthofbusiness.

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Fig. 2. Marked out as most rarely used marketing metrics for Latvian companies

Source: according to the results of the survey carried out by the authors of the article in March 2014.

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Number of customers over the last yearhas increased

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Fig. 3. The coherence between number of customers, growth rate in sales and marketing budget

Source: according to the results of the survey carried out by the authors of the article in March 2014.

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 101

Thisstudywasanexpedientfirststageforfurtherresearchasitgaveasubstantialinsight into current situation in Latvia –how marketing metrics tend to be usedin Latvian companies, as well as showedsignificant links betweenmarketingmet-rics’ application andmarketing planning,implementation,andoverallmanagementprocess.Basedongathereddata,ongoingresearch phases may be developed in aparticularly corresponding way. Researchalso can be considered as important toolforraisingoverallawarenessaboutmarket-ingmetricsbetweenmarketingspecialistsinLatvianfirms–asauthorsviaquestion-naireproposedforcompaniestoassess57differentmarketingmetrics,manyofthemasaresultweremarkedoutaslessknown,authorshopethismarketingspecialists’ob-scurityatsomepointwillencouragethemto inquiremore information and currentknowledge about marketing metrics andbringmorevaluetotheirbusinesses.

Conclusions and proposals

Basedontheconductedresearch,theau-thorsmakethefollowingconclusions:

1.Marketingmetricsoverthelastdec-ades have gainedmore attention in aca-demiccircles,yetmarketingperformanceand marketing efficiency measurementinpracticeisvaguerassurveyofLatviancompanies’ shows – marketing repre-sentatives from104 inmanycases strivetounderstandorknowvariousmarketingmetricsform57proposed.

2. Three different perspectives aretaken into accountwhenmeasuringandevaluating marketing performance – ef-ficiency, effectiveness, and adaptability.Thecontributionofmarketingonoverallbusiness performance and shareholdervalueisevaluatedintermsoffivelevelsofimpact–thecompany,customer,market,financialandshareholder.Alloftheseap-proaches and levels ofmeasurement are

Fig. 4. Questions for assessing adequacy of marketing performance and efficiency measurement methods

Source: the authors’ proposal with reference to T. Ambler (2000).

Jeļena ŠAlKovSKA, Elīna ogStA102

incorporated in marketing performancemeasurementsystem.

3. Nowadays business objective is todevelop comprehensive, credible andadaptablemarketing performancemeas-urementsystem.

4.Marketing efficiency and companyperformance are assessed better if mar-keting metrics complement traditionalfinancialmetrics.Particularly,marketingmetricscanworkasleadingindicatorsofproblems, opportunities, and future fi-nancialperformance.

5.Latvianenterprisesaremorefocusedonmeasuringfinanceoutcomes,buttherecanbeobservedatendencyofendeavourstomeasurehardermeasurableaspectsofmarketing performance, such as formedcustomer attitudes, beliefs and willing-nesstorecommendorsearch.

6.Financialresultsinmanycaseshavelittletodowithsustainableandlong-termbusiness development, therefore Latviancompanies also acknowledge the neces-sity to assess customer beliefs, attitudes,andbehaviourbymeasuringthecustom-ersatisfactionlevel,willingnesstosearchandwillingnesstorecommend.

Basedontheconductedresearch,theauthorsofferthefollowingproposals:

1.Futureresearchmustbeconducted;it should focus onmethodological baseof calculations ofmarketingmetrics, aswell as specific empirical investigationofmarketingeffectivenessandefficiencyin Latvian companies must be carriedout by implementation of in-depth in-terviews and more specifically adaptedsurvey.

2.Inordertoevaluatetheoverallmar-keting performance, a multidimensionalset ofmarketingmetrics is required, in-cludingbothfinancial andnon-financialmeasures that address both marketing

inputsandoutputs.Thesemeasuresneedtobeevaluatedagainstbothinternalandexternal (if possible) benchmarks, ad-justed for the effects brought forwardfrompastandcarriedforwardforfutureperiods.

3.Thecompaniesmustkeep inmindthatthereisnouniversal,onesetofmar-ketingmetrics,suitableforallcompaniesin one industry or in onemarket – therightmetricsdependuponthespecificsofwhatmarketingfunctionisheldaccount-ableforandthemost-criticalquestionsforwhichmarketingneedstoberesponsible.

4. Companies in Latvia should focusonmeasuringwhatisthemostrelevanttothem,notonlywhattheycanmeasure–asonegetswhatismeasured,companiesmust identify the key indicators whichareutmostimportantforsustainableandlong-termdevelopment.

5.Usageofmarketingmetricsiscon-sideredbeingan importantpartofmar-ketingevaluationandcontrolprocessanditisimportanttounderstandthatmarket-ing metric is not just another word formeasure: metrics must be relevant, pre-cise, consistent, and sufficient for reviewand analysis purposes for companies inordertogainbetterunderstandingaboutmarkets, customers, business and valuedrivers.

6. By the following qualitative study(in-depth interviews, case studies etc.)and communication with respondentsfrom Latvian companies would ensurethatoveralllevelofawarenessaboutmar-ketingmetricsandopportunitiestheyof-fer to businesses and the value they cancreateisraised.

7.Theauthorsacknowledgethattherearecountry-specificdifferencesintheuseofmarketingmetrics(e.g.whatworksinUSA, doesn’t work in Latvia); therefore,

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 103

throughfurtherresearchaframeworkofmarketing metrics, suitable for Latvianenterprises,shouldbedeveloped.

8.Marketingmeasurement is a com-prehensive and ever continuingmarket-ing evaluation and control process as

companiesmustadapttochangingmarketsituations, so theymustbeable toadapttheirsetofsuitablemarketingmetricstochanges in current situation, keeping infocus theoverallbusinessobjectives andmarketingrolewithinacompany.

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Thepapersubmitted:May9,2014Preparedforpublication:June5,2014

Pastaruosiuskelisdešimtmečiusrinkodarosveiklosvertinimasbuvolabaiaktualitemarinkostyrimuo-se, daugelis autorių ir mokslininkų didelį dėmesįskiriarinkodarosrodikliamsirpraktiniamjųįverti-

nimuiversloplanavimoirrinkodarosįgyvendinimoprocesuose.Pripažįstama,kadrinkodarosstrategijaturi reaguoti įnepastoviąversloaplinką irkonku-rencijos sąlygas, todėl įvertinimas, kontrolė ir tin-

Jeļena ŠALKOVSKA, Elīna OGSTA

KIEKYBINIAI IR KOKYBINIAI ĮMONIŲ RINKODAROS RODIKLIŲ VERTINIMO METODAIS a n t r a u k a

QUANTITATIVE AND QUAlITATIVE mEASUREmENT mEThODS Of cOmPANIES’ mARkETINg EffIcIENcY 105

kamaipasirinktiveiklosvertinimometodaipadedaišlaikytitinkamąstrategijąirparodo,kadapakeiti-maiyrareikalingi.įvairūsrinkodarosrodikliai,kaippriemonės,leidžiančiosįvertintirinkodarospoveikįvisamverslui, turi būtinaudojami vadovybės, sie-kiantnustatytipriežastiniusryšiustarprinkodarosveiklos ir finansinės grąžos. Vienas iš svarbiausiųstrateginioversloplanavimo,valdymoirkontrolėsprocesoaspektųyramatavimometodai,naudojamirinkodaros efektyvumo ir rinkodaros veiklos ver-tinimui,tačiaupastebima,kadįmonėsdažnainėralinkusiosdalintissavorinkodarosveiklosvertinimopatirtimi,todėlrinkodarosrodikliųnaudojimasturibūtiįvertinamaskokybiniaisirkiekybiniaisvertini-mometodais.

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dinamiška ir nuolat besikeičianti, todėl gebėjimasįvertinti rinkodaros veiksmingumą ir efektyvumąyra labai svarbus siekiant sėkmingo verslo ir ilga-laikės plėtros. O žinių trūkumas (kaip išmatuotirinkodaros poveikį; kaip įvertinti visus svarbiusaspektus,kurie lemiavartotojųpožiūrį ir įsitikini-mus,beiturididelįpoveikįjųpirkimoirvartojimosprendimams) gali padaryti įmonę labiau pažei-džiamąkonkurencingojerinkosaplinkoje.Siekiantpagerinti strateginę, ilgalaikę įmonės orientaciją,autoriai siūlo įmonėms plėtoti individualius, kie-kvienai labiausiai tinkančius, rinkodaros rodikliųvertinimometodus.

Atsižvelgiantįvisusaukščiauaptartusaspektusbei mokslinėje literatūroje aptariamus skirtinguspožiūriusįrinkodarosrodiklių,rinkodarosefekty-vumo ir veiksmingumo vertinimą, šio tyrimo au-toriai sukūrė konceptualų rinkodaros efektyvumomatavimo metodą. Autoriai bando kritiškai įver-tintirinkodarosefektyvumovertinimą,taippatiš-analizuotirinkodarosrodikliųnaudojimopraktikąLatvijosįmonėse,todėl2014m.kovomėnesįbuvoatliktaskiekybinisrinkodarosspecialistų,vadovųiršakosatstovųtyrimas,siekiantįvertintirinkodarosrodikliųLatvijojenaudojimą.