Let us start with an example of Gillette Company. To help its managers develop their marketing plans, the Gillette Company uses information gathered from five different types of regularly recurring research projects. The five projects were designed to provide the managers a complete picture of the razor and blade market, including detailed descriptions of consumers, competition, and distribution. The five projects, and the usefulness of the information they gather, are as follows.
1. Each year a large number of people are selected in a nationwide sample and are personally interviewed in their own homes. The purpose is to determine the brands of razors and blades used by consumers, and to measure consumers’ attitudes toward both Gillette’s products and competitors’ products.
2. The company uses a large panel of shavers who are studied annually through the use of mail questionnaires. These projects are able to measure brand loyalty and brand switching because the same individuals are studied year after year.
3. Annual telephone surveys provide the company with brand awareness and advertising awareness information. These surveys tell the company how it compares with competition on these two important awareness measures.
4. Each month the company conducts two or more consumer use tests, involving both Gillette and competitive brands, in order to evaluate the strengths of all brands. The tests ensure that the company’s products are up to standard and that no claims are made that cannot be substantiated.
5. Inventory audits are taken regularly at both the retail and wholesale levels. These provide the company with information regarding product inventory and display, pricing, out-of-stock, local advertising, and more.
These five projects provide Gillette marketing managers with information on market shares, brand loyalty and brand switching, consumer attitudes, brand and advertising awareness, product advantages versus competition, inventory levels, out-of-stock, retail price and display, local advertising and more. As the data are gathered from recurring studies, the managers have a complete picture of current market and competitive conditions from the most recent set of studies, and they know the recent trends that exist in all of these data. All of these items of information provide the Gillette managers an excellent historical record on which to base the development of their new marketing plans.
MIS to evaluate the Marketing Plan’s Effectiveness:
The type of information needed to evaluate the effectiveness of the most recent marketing expenditures plan for a product. Gross margin, marketing expenditures, and contribution to earnings are recorded for each market area and also totally. This information is also shown for each market (1) as a percentage of the total for all markets and (2) as the dollar amount of change this year compared with last year. Additionally, the total industry sales in dollars, the firm’s market share, the percentage of retail distribution achieved for the product, and television media costs are shown for each market, both for this year and last. With these data management can observe changes in demand ( as reflected in total industry sales); changes in sales, costs, and earnings; changes in competition (as reflected in market share and retail distribution percentages); and changes in advertising costs (as reflected in television media costs). This information is available by market and for all markets. With such information management can reappraise a product’s marketing expenditures plan-as well as the effectiveness of the advertising-sales promotion mix used-and than make changes. For example, in Area A, advertising and promotion expenses of $100,000 produced $260,000 of contribution to earnings, while in Area E advertising and promotion expenses of $400,000 produced only $280,000 of contribution to earnings. This suggests that the company might increase its total contribution to earnings by shifting some advertising and promotion money from Area E to Area A.