Summary: The phenomenon of quick success and instant benefit in promotion is often caused by paying too much attention to short-term interests in promotion assessment. According to the characteristics of promotion management, this paper puts forward the contents and specific indicators of performance evaluation by using balanced scorecard method, and points out that balanced scorecard method can effectively help enterprises to implement strategic guidance in promotion management because the promotion management system is based on enterprise marketing strategy.
Keywords: Balanced Scorecard Performance Evaluation Promotion Management
10 Over the years, China's promotion methods have grown from scratch and gained unprecedented prosperity. According to incomplete statistics, from 2004 to the first half of 2005, the promotion rate of large department stores in China on weekends and holidays has reached 100%, and the ways of promotion activities have also developed from traditional discounts to lottery, coupons, gifts and roadshows.
Nevertheless, China's current promotion activities and management are only manifested in the way of behavior, usually based on tactics and skills, while enterprises pay too much attention to tactics and skills, which are very random and have no overall and systematic views, leading to some unplanned and frequent promotion activities and similar promotion methods. In the evaluation of promotion effect, the short-term financial index-the direct profit brought by promotion activities is often used as the judging standard. It seems that promotion has become an activity of taking short-term actions to obtain short-term benefits, which is not conducive to the implementation of the company's overall marketing strategic decision.
So what kind of activity is promotion, and how to evaluate it is more meaningful? This paper analyzes it from this angle.
From a strategic point of view, promotion is a multi-objective decision.
Promotion, as its name implies, is an activity to increase sales quickly in a short time. Based on system thought and three levels of strategy, tactics and operation, promotion activities can be divided into three categories: strategy, tactics and operation.
Strategic promotion is the overall large-scale promotion planned by the company in a unified way, which is generally an annual arrangement. In the annual plan, the promotion elements such as theme, purpose, time and key promotion market are listed in detail. Its main purpose is to reflect the strategic intention of enterprises in the process of brand building, new product promotion and competitive strategy. The most striking feature of strategic promotion is its strategic orientation and strong planning.
Tactical promotion is random to some extent. As a response to unexpected or urgent emergencies in the market, plan management is generally implemented to prepare for emergencies. Such as short-term sudden focus news in the region, public crisis or social impact caused by product complaints, destructive attacks by competitors, etc. Tactical improvement emphasizes the speed and flexibility of dealing with problems under the premise of following the company's strategic orientation, focusing on tactics and skills.
Operation promotion is a general promotion activity carried out in cooperation with regional marketing. The company puts forward the overall scheme requirements, and the region adjusts, selects and implements it according to the actual situation. Its purpose is also very clear, generally focusing on dealing with some standard questions in the market, such as increasing outlets, cracking down on goods smuggling, stimulating sales, and maintaining customer relations. Because companies often have clear solutions to these recurring problems, operation and promotion focus on effectively implementing the company's marketing strategic intentions.
These three levels of promotion activities constitute a complex pyramid-shaped promotion management system. The strategic positioning of the company is the main line of this system. The top of the pyramid is strategic promotion, the middle is tactical promotion, and the bottom is operational promotion, which is the basis of the whole promotion management system. Promotion activities based on different levels have different purposes. Strategic promotion and operational promotion focus on the long-term impact of promotion activities, while tactical promotion focuses on solving short-term problems. Therefore, as an important tool in marketing mix, sales promotion is not only to promote sales in the short term, but also strategic and holistic, thus becoming a multi-objective decision. Its main objectives are:
First, short-term sales increase, which is the most direct goal of promotional activities; The second is to maintain and improve the market share, which is an important indicator to measure the strength of enterprises. Maintaining and increasing market share is not only the first opportunity to seize the competition, but also the most effective means to fight against foreign competition. Third, we must suppress attacks on competitors. A successful promotion will have a deterrent effect on competitors, and when competitors follow up, they have gained a competitive advantage. The fourth is to cultivate a mature customer base, which is a long-term goal. It is not enough to have satisfied customers. To open a shop, we must have loyal customers. How many customers can protect the capital is more meaningful than how much sales can protect the capital, and constantly create reasons for customers to come to us. Therefore, short-term sales volume is not the key point, but the bag carrying rate and customer unit price are the key points. Only by cultivating a group of mature and loyal consumers can we finally maintain a sustainable competitive advantage. Fifth, form a good supply chain alliance. Promotion is the joint action of manufacturers, and the strong support of suppliers, especially the well-known suppliers, plays an important role in the success of the event. Therefore, establish a good cooperative relationship with manufacturers through promotional activities, attract more well-known suppliers to form strategic alliances and improve overall competitiveness.
At present, the emphasis on tactics and skills in promotion activities reflects the mentality of quick success and instant benefit in marketing activities, which not only expands the middle of the promotion pyramid, but also ignores the consistency and systematicness of strategies, resulting in the unclear main line and direction of the whole promotion management system. At the same time, ignoring the operation and promotion activities may make the promotion pyramid system collapse because of the unstable foundation.
The most fundamental reason of the problem is that enterprises overemphasize short-term interests and ignore other goals in the promotion performance evaluation. Considering the multi-objective of promotion, the evaluation of promotion performance should not be limited to the short-term benefits afterwards. How to systematically think about the promotion management activities from the strategic level, so as to avoid blindly following the trend and randomness in the current promotion management, and make the promotion truly become a planned, organized and long-term profit-generating activity in the enterprise marketing system. How to choose a more scientific and reasonable performance evaluation method and fundamentally avoid short-sighted behavior in promotion management should be the main problem that marketing managers need to pay attention to.
Strategic-oriented Performance Management Based on Balanced Scoring Method
Kaplan and Norton put forward the balanced scorecard method, the core idea of which is to achieve balance among a series of indicators, namely, short-term goals and long-term goals, financial indicators and non-financial indicators, lagging indicators and leading indicators, internal performance and external performance. Taking the overall goal of the company as the starting point to produce long-term performance, and taking short-term financial indicators as a supplement to the long-term performance, the ultimate goal is to improve long-term profitability. Balance can be achieved by shifting the management's attention from the realization of short-term goals to the realization of strategic goals, from the feedback thinking of results to the real-time analysis of the causes of problems.
This method is different from the traditional performance evaluation method that pays too much attention to financial indicators. This method is divided into four indicators, which represent three interest groups: shareholders, customers and employees, so as to ensure the enterprise to organize and implement the strategy from a systematic perspective.
Financial indicators: the balanced scorecard retains financial indicators that reflect past performance. Financial indicators can not only measure the improvement of profitability by the formulation and implementation of enterprise strategy, but also financial objectives are the focus of the four levels of scorecard.
Customer index: determining your target customers and market segments is the main strategy for enterprises to implement differentiated management. These target customers and their market segments not only represent the company's financial goals and income sources, but also take the market and customer needs as specific goals in the balanced scorecard. Therefore, the results at the customer level include indicators such as satisfaction and loyalty, so as to interpret the mission and strategy of the enterprise and turn it into the specific goals of the target customers and market segments.
Internal process indicators: the internal process of an enterprise is divided into three processes, which can be used for enterprises to establish the same internal value chain model: innovation process: enterprises develop new products or services to meet the needs of customers in market segments. Operation process: it is a value-added process of value creation, from receiving customer orders to delivering products to customers. After-sales service: After-sales service includes warranty period, regular maintenance, return processing, payment procedures or return processing.
Learning and growth indicators: this level provides a means for other levels of performance breakthrough. One of the purposes and characteristics of implementing balanced scorecard method is to avoid short-term behavior and emphasize the importance of future investment. As the greatest wealth of an enterprise, employees should pay more attention to the investment in employee system and business process. Therefore, it includes: employee productivity, employee satisfaction, employee loyalty and other indicators.
The balance of the above four levels of indicators makes the balanced scorecard a performance management system that can realize strategic orientation, that is, the balanced scorecard is used to implement the company's strategy as an interrelated and mutually supportive performance planning system, and the balanced scorecard is integrated into the performance-oriented feedback and assessment incentives, thus promoting every employee of the company to consciously realize the predetermined performance plan, thus ensuring the company's "strategic orientation". Among them, whether the balanced scorecard can be truly integrated into the performance management system and effectively realize the docking with the company's strategy is the key to realize the company's "strategic orientation".
Balanced performance scoring method for promotion from the strategic perspective
Among the multiple goals of promotion, there are both short-term goals of obtaining short-term profits and medium-and long-term goals of expanding market share and improving relations with customers and suppliers. From the perspective of marketing strategy, the ultimate goal of marketing is to obtain profits through customer satisfaction, that is to say, whether promotion can obtain profits is still the core of evaluation. Profit comes from customer satisfaction, so the evaluation of promotional activities not only needs to analyze the short-term promotion effect afterwards, but also needs to pay attention to the long-term profitability obtained through customer satisfaction. Therefore, performance evaluation indicators should cover three main aspects: investigating the current profitability of promotional activities, analyzing the influencing indicators of profitability of promotional activities, and the growth potential indicators of profitability of promotional activities obtained through organizational improvement.
Balance-based scoring method is a performance evaluation method that uses multiple levels to improve long-term profitability. Because the scoring method based on balance can be integrated into the performance management system of enterprises, if it can be effectively connected with the company's strategy, it can help enterprises achieve "strategic orientation." Therefore, applying the balance-based scoring method to promotion management can systematically evaluate the performance of promotion activities from the perspective of marketing strategy.
According to the characteristics of promotional activities, referring to the angles and indicators proposed by Kaplan and Norton, this paper puts forward a balanced performance scoring method (BSC-PM) based on strategic perspective, and evaluates promotional activities from four angles: financial value, customer orientation, internal process and learning growth.
In department stores, it is very common to use coupons to promote sales. The most common way is to spend a certain amount, that is, to give a certain amount of coupons for re-shopping. Taking the coupon promotion activities in the department store industry as an example, this paper expounds the main tasks and specific indicators of each angle in the performance measurement system of promotion balance score.
Financial value
As an important result indicator of promotional activities, financial value reflects the center of all the goals that promotional activities need to achieve. The completion of the profit target will get direct benefits, so the input-output ratio in promotion activities is the most critical indicator.
Promotion expenses indicator Promotion expenses: refers to the expenses that the shopping mall bears or shares with suppliers in order to make the activities more popular and promote more.
Promotion cost indicator Promotion cost: refers to the advertising cost, POP production cost and promotion and display arrangement of newspapers, television and other media, including promotion background board, promotion modeling, special promotion platform construction cost, roadshow cost, etc.
Management fee for promotional activities: refers to the expenses of temporary personnel specially hired for this promotional activity and the extra expenses of overtime.
Sales promotion output indicator Operating income during the activity: refers to the total sales income of the shopping mall during the promotion period. Activity period profit: refers to the total profit of the shopping mall during the activity period. Invoiced quantity during the activity period: refers to the total quantity of sales orders issued by the mall during the promotion period. Average customer unit price during the activity: refers to the average total amount of shopping by consumers during the promotion period. Customer bag carrying rate during the activity: refers to the proportion of consumers who buy goods during the promotion period.
Customer orientation
For merchants, customers include both customers and suppliers. Cultivating mature customer groups and forming a good supply chain alliance are the main goals of promotional activities. For customer groups, such indicators aim to understand the needs of target customers and evaluate the ability of enterprises to meet customer needs; For suppliers closely related to promotion, such indicators aim to reflect the degree of friendly cooperation between suppliers and merchants in promotion activities, so as to adjust the ways and strategies of promotion activities. Therefore, the selection of evaluation indicators should not only reflect customers' willingness to participate in promotional activities, but also reflect customers' needs, such as coupon distribution rate, customer satisfaction and other indicators, as well as the degree of cooperation between manufacturers in the promotion process, such as the degree of cooperation between manufacturers.
Internal process
As an outcome indicator, the improvement of financial value and customer orientation of promotional activities must depend on the realization of driving indicators. The internal process is to promote the promotion result index from the perspective of * * * enjoyment and coordination within enterprises, between enterprises and between enterprises and customers. We can design related indicators of internal processes from the perspectives of innovation process, operation process and service process. The innovation process focuses on evaluating new promotion methods that can meet the needs of target consumers. The operation process reflects the internal coordination and implementation of the promotion activities, and finally reflects the service level of the enterprise in the process of promotion activities through the service process.
Innovation process indicator: the ratio of innovative promotion methods to the total number of promotion activities: this indicator reflects the ability of merchants to meet the needs of target customers through innovation in promotion methods. Lead time of innovative promotion: this indicator reflects the time when the company adopts new promotion compared with its competitors.
Operational process indicators: average preparation time of promotional activities: the preparation of promotional activities is mainly completed by the marketing department, but the assistance of other departments is also essential. This index reflects the cooperation status between various departments within the enterprise.
Promotion response time: the time for an enterprise to take action after a competitor launches a promotion activity.
The ratio that the promotion activity fails to complete the planned target: the planned target refers to the result target in the promotion activity. Through the analysis of this goal, we can find the gap between the plan and the reality, which is convenient for future planning and gap analysis.
Average waiting time for customers to redeem coupons during service: The average waiting time is related to the working efficiency of staff, the setting of service stations and the complexity of coupon redemption procedures.
Learning and growth The learning and growth of sales promotion activities are related to the long-term benefits that can be brought by the company's sales promotion management system. A healthy and stable promotion management system can bring lasting long-term benefits. From the perspective of the structure of the promotion management system, the three types of promotion activities should maintain a reasonable proportion pattern, and the elements of promotion activities should be consistent with the company's marketing strategy. At the same time, employees are the most important factor for the company's future development, and employees' satisfaction and the cultivation of employees' quality in promotional activities should also be concerned.
Proportion of strategic promotion, tactical promotion and operational promotion: the proportion of various promotion activities in the total promotion activities during the analysis period.
Staff training quantity: an effective way to improve staff skills and quality.
Employee satisfaction: The satisfaction of company employees with promotional activities will reflect their enthusiasm for promotional activities and work efficiency.
In the pyramid-shaped promotion management system, emphasizing the "strategic orientation" in promotion activities can ensure the unity and coordination of promotion activities and improve the overall efficiency of promotion. As a performance management system that can realize strategic orientation, balanced scorecard method has been widely used in enterprise strategic management. Based on the balanced scoring method of Kaplan and Norton, this paper puts forward an improved balanced scoring method (BSC-PM) and the corresponding evaluation indicators to provide performance evaluation for promotional activities.
References:
1. Robert s? Kaplan from David P. Norton. The comprehensive scorecard is a revolutionary evaluation and management system [M]. Xinhua Publishing House, 1998
2. Wang Liying. A new enterprise strategic management system --SEMS balanced scorecard. Journal of Ji Liang University in China [J]. 2003
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