Xiaoning Liang, Johanna Frösén and Yuhui Gao
Despite the availability of many metrics and tools for marketing performance measurement, the way in which firms use their marketing metrics remains underexplored. This study aims…
Abstract
Purpose
Despite the availability of many metrics and tools for marketing performance measurement, the way in which firms use their marketing metrics remains underexplored. This study aims to address this gap by empirically establishing the differing effects of the diagnostic and interactive uses of marketing metrics on firms’ market-sensing capability, contingent on competitive intensity and focus on market-related metrics.
Design/methodology/approach
This study builds on survey data collected from 210 Irish-based firms, complemented by 21 in-depth interviews with business managers. Survey data are analysed using regression analysis.
Findings
This study finds that firms using marketing metrics interactively to communicate organizational focus are better able to sense their markets, especially under high competition. The authors observe a positive impact of the interactive use of metrics on market-sensing capability, but a U-shaped impact of their diagnostic use, the magnitudes of which further depend on competitive intensity and firms’ focus on market-related metrics.
Research limitations/implications
This study provides a nuanced view of marketing performance measurement (MPM) practices within firms, particularly focussing on diagnostic versus interactive uses of marketing metrics. It also sheds further light on how two diverse uses of marketing metrics – diagnostic and interactive uses – influence a firm’s market-sensing capability. Moreover, the identification of boundary conditions also contributes to the discussion of contextuality in MPM, highlighting the importance of aligning a firm’s uses of marketing metrics with its business environment.
Practical implications
This study provides novel insights into how diverse uses of marketing metrics may benefit firms. The differing effects of diagnostic and interactive uses of marketing metrics on market sensing highlight a primary need for developing the latter and for using the former only with caution. It establishes that all firms would equally benefit from an interactive use of marketing metrics that is pivotal to improving their ability to anticipate, detect and sense market changes.
Originality/value
This study provides novel understanding of the role of marketing metric uses in firms’ market-sensing capability and contributes to the discussion of contextuality in marketing performance measurement. It highlights the importance of aligning a firm’s use of marketing metrics with its business environment.