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The article represents the current survey on the nature of markets and their measurability in terms of constant ups and downs of the international indexes in terms of definite deals or their annulment. In this respect the effective and efficient methods are seen to be helpful for making the whole systematic character of this financial sphere stabilized and working. The return on investment (ROI) measure is observed in the article as the mechanism which is applicable for marketing investments and their prior position for the particular gains and profits. Such spheres of managerial mutual interaction are touched in the article as the customer relationship management and knowledge management along with the technological support in solving the raised problems. This is why the author for the purpose of making data more accessible structures the whole article divided into three tiers, so that to make the transition in analysis of ROI for the particular market conditions. These tiers are:
- Profits and ROI;
- ROI Subcomponents;
- Performance Indicators.
In the first part of the discussion the author leads to the significance of maximizing profits in the short and long run. In this respect the theoretical framework is given to make the difference between maximizing profits and maximizing ROI. The thing is that notions of the “investment” and “net value” are highlighted with particular explanation of what is prior within two. On the other hand, ROI is particularly significant for the decision-making process due to the budget allocation procedure and determination of the marketing campaign level. The second part of the article gives the information about the constituents of ROI. Thus, an expert should bear in mind the following components of it, namely: 1) Customer lifetime value (CLV); 2) Total number of customers generated from the marketing investment; 3) Marketing expense, which is the total investment made with the expectation of generating a return. In the third part of the article the performance indicators are used to identify the measurements in terms of market hierarchical nature and changes which can be implied. These indicators are useful and necessary for designing the market strategies in the short or in the long perspectives. This is rather possible along with the implementation of ROI.
The article is helpful for the class due to the updated information about current use of methods for provision of qualitative and quantitative analysis of the situation in the market at the moment. Moreover, he research by Lenskold (2002) gives appropriate information about the use of ROI and its particular place in the sphere of market relations. It is due to the ability of the author to comment on the ideas imposed in the article by virtues of supported diagrams, charts and tables. All in all, the article shapes points of great significance for the class discussion and further evaluation.
As for me, the article seems to be well structured with particular knowledge on the market affairs, and every tier in it discloses the main idea with essential information. In other words, looking through the whole text of the article, I can definitely admit that the concise but rather comprehensive methodology and explanation maintained in the article are helpful for further conclusions and implementation. To say more, the theoretical grounds and practical use of ROI are persuasive in arguments.
Lenskold, J. D. (2002). “Marketing ROI: Playing to win”. Marketing Management. 11(3), 30-34.