Reference no: EM133200964
Running Case: TSL | Measuring Marketing Effectiveness
The Culture of R&D at TSL
From its beginning, TSL sought to push boundaries. The company encouraged angular thinking and cultivated a culture that did not fear failure. From CEO Ryan Devlin on down, the company embraced the unexpected and built the business on trying new things. For each measure of forward-thinking, however, came the need for an equal measure of accountability. In addition to the usual sets of stakeholders, TSL employees also felt great accountability to the children around the world who received the life-sustaining nutrition that was central to the TSL mission.
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These company priorities, creativity, and accountability produced a culture that valued research and development, particularly with respect to understanding consumers and creating great products. As Ryan points out, product R&D is essential to keeping TSL's product lines fresh and innovative. TSL's value proposition includes the important idea that TSL customers should not trade product quality in order to contribute food for the hungry. In other words, TSL enjoyed a premium quality position in its own right. This point is particularly important because it reflected the R&D culture at TSL. The company's premium products resulted from careful research into consumer tastes, a willingness to branch out and try different ingredients, and a belief in the value of keeping the product line fresh and innovative. A brand built on a fresh idea could not survive marketing a stale product line. Product R&D remained essential to the brand's continued growth.
While product R&D occupied a central role in TSL's overall long-term strategy, researching the short-term success of its marketing tactics received less attention from the marketing team. However, the team was learning that the creativity that drove their tactical activities, particularly with respect to promotion, lacked some of the planning present in other parts of the company.
The team rightfully wondered whether their promotional efforts produced maximum results. In other words, the team needed a process of marketing research and design). Fortunately, the team was considering an upcoming college tour promotional plan that could lay the foundation for developing the MR&D program the company needed.
The Need for MR&D at TSL
MR&D could prove to be especially useful at TSL on two important fronts that mirrored the emphases in their promotional programs. First was in retail supply chains, and in particular between TSL and its retail partners. As TSL grew toward national brand status, the network of retailers carrying the brand would require more in the way of sales performance while also demanding that TSL hold the line on prices. No matter how good retailers felt about the charitable part of TSL's mission, TSL could expect to be squeezed by powerful retailers. Mission or not, business was business. MR&D could provide a means by which TSL could evaluate the relationships it developed with retailers as well as the data that could help manage those relationships. High-performing products gave TSL some leverage against powerful retailers such as Amazon and Target that TSL dealt with more regularly.
Second, and perhaps more important, as TSL grew, MR&D could help the company fine-tune its promotional efforts toward consumers. The company's approach had been to rely on an outside digital and social media marketing agency for large projects, but the day-to-day nuts and bolts of TSL's social media strategy were handled internally. At both levels, the marketing team needed to know not just whether the efforts felt successful, but also what data told them about the success of their efforts. Whether the efforts were carried out by an agency or internally, social media was a pillar of marketing strategy. It had to be accountable for the resources it used.
Importantly, the team had long used social media analytics tools to track their performance. However, gaps in their use existed in two areas. One, they lacked systematic integration with short-term objectives. In other words, the marketing team typically thought of ideas for content, executed the ideas on social media, and then used analytics tools to see how they worked after the fact. What was missing was setting goals for short-term success, devising metrics to use to measure success, using the goals to guide content creation, and then judging the effectiveness of their plans. The team looked back at their holiday remarketing campaign (see Chapter 12). The hard numbers provided by social media let them estimate the brand's exposure on Facebook and then determine the cost per sale. What was missing was a sense of whether the campaign met expectations.
The other gap existed in how TSL used MR&D to tie together different parts of their marketing efforts. While the company looked closely at data from social media platforms, they rarely tied these data to other areas of performance. For example, they did not track performance data from social media to performance data at public relations events. They did not tie together social media or public relations exposure to retail store metrics. These were only two examples of how MR&D could be used to measure short-term performance and respond more holistically to the results.
An MR&D Plan for TSL
In general, marketers use objectives to determine the effectiveness of their efforts. Objectives set the expectations that define what success actually is. Research helps quantify effectiveness by gathering the data needed to compare actual performance to desired or expected performance. Overall, TSL utilized marketing objectives well. The company set overall sales objectives, distribution objectives, product development objectives, and pricing objectives to help management better understand how effectively they allocated company resources.
However, the marketing team knew that one area with room for improvement was in promotion, and especially in digital and social media performance. While the marketing team was always eager to see and use the numbers generated by digital and social media, they were generally not used as part of a larger plan guided by objectives and carefully selected tactics. That said, the marketing team remained optimistic that MR&D could be quickly applied to its social media and PR activities because data were so easily obtained.
The short-term time horizon typically associated with MR&D simplified the task of setting up an MR&D program. The process of implementing MR&D begins with setting short-term or tactical objectives. Naturally, these objectives must be consistent with longer-term overall marketing and company objectives. However, that was a separate issue. The tactical objectives themselves could be applied to many of TSL's regular promotion activities ranging from social media content to special events.
Once the objectives were in place, the team could then establish metrics for success and a data-collection plan to implement the program. While effective MR&D programs required a thoughtful approach on the part of marketers, the short-term time horizon meant that the benefits of the program could be realized quickly.
Social media provided a natural laboratory for testing different approaches both in terms of the media itself and in terms of message content. The highly interactive, immediate, and fluid nature of digital and social media meant that MR&D could be applied, tested, and evaluated quickly. For example, the company could systematically examine different social media content across different platforms. Do some messaging strategies prove more successful than others when run on different platforms? Of course, properly addressing this and many other questions required that the team develop an MR&D plan.
The College Tour: Putting the MR&D Plan in Place
A good point to begin the MR&D process in earnest arose with a plan to take the TSL show on the road to college campuses around the country. At various points during the year, many colleges and universities hold on-campus events that surrounded important days in the campus communities. Campus events included local festivals, new student orientations, finals week, and other celebrations where crowds of students presented marketers with opportunities for great visibility.
Initially, the marketing team wanted to select events on 15 campuses where TSL would set up tents or booths and representatives could share the company's message with students and distribute TSL promotional merchandise, free samples, and coupons. Along with flyers distributed to students, social media would be key in making campus communities aware of TSL's mission and its involvement with the events.
The marketing team was excited, not only for their outreach to college students, but also for the opportunity to use the events to start putting in place an MR&D program. The team met to map plans not only for this event strategy, but also for how to use it to develop a framework for MR&D efforts going forward.
Application Exercise
1. Think about the college tour being considered by TSL. Develop an MRD plan to evaluate the success of the promotion. In doing so, consider the following:
2. Given your own experience observing on-campus events, what performance metrics should TSL use to judge whether an event is successful? Suppose the company planned to visit your campus. Use the metrics to set tactical objectives for the event. In doing so, think about the costs associated with putting on such an event. What metrics might be useful for calculating the return earned from the resources spent?
3. In the weeks following an on-campus event, what metrics can TSL use to see whether the larger objective of raising brand awareness has been accomplished? Consider all points of distribution the company uses.
4. In the weeks preceding an on-campus event, what metrics can the company use to assess whether their efforts to promote their appearance at the event have been successful? In other words, prior to the event itself, is there any way that the company can judge whether students know that TSL is coming to campus?