What performance outcomes do marketers use?

A question I think should be asked more in academic marketing research is “how do we define performance?” Lots of people do analysis that aims to show what creates good performance but there is surprisingly little attention paid to what good performance means.

Constantine Katsikeas and colleagues looked at how marketing performance is measured in academic marketing papers. They divide up papers as showing a strong theoretical rationale for the choice of measure (or not). Rather depressingly “.. the vast majority of studies covered in our review (>92%) either fail to provide a clear definition and rationale for the conceptualization of performance adopted or are inconsistent across their conceptualization and operationalization of performance” (Katsikeas et al. 2016, page 8). This translates as scholars are just using what metrics they have to hand not giving serious thought to what they should use. Worryingly “…researchers may simply operationalize performance on the basis of outcome variables that post hoc provide the strongest empirical results” (Katsikeas et al. 2016, page 4). This pretty much invalidates the findings which are typically tested assuming that there is a strong theory to support or refute.

The authors divide up the measures used into a few groups. Customer Mindset, Customer Behavior and Customer Level Performance metrics are part of Operational Performance and eventually feed Product Market Performance (e.g., unit sales, new product success). There are also Accounting Performance measures (taken from the financial accounts) and Financial-Market Performance measures. The later include such things as investor returns, equity risk and cost of capital.

The sheer variety of performance measures used is both exciting — marketing seems connected with a lot of outcomes — but also highly problematic. Often researchers don’t have a great theory as to what marketing actions should impact — they just trawl for impact. This is a great, if somewhat depressing, paper.

Read: Constantine S. Katsikeas, Neil A. Morgan, Leonidas C. Leonidou, and G. Tomas M. Hult. “Assessing performance outcomes in marketing.” Journal of Marketing 80, no. 2 (2016): 1-20.