Marketing efficiency 2002:
Relevance and approaches from the
perspective of German marketing managers
Main findings
Munich, April 22, 2002
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Survey of marketing efficiency 2002 – summary (1)
• 68% of all interviewed companies say that marketing efficiency is a crucial challenge for most
companies, particularly for large companies operating in marketing intensive industries such as
consumer goods
• 71% of all companies also indicate that the efficiency pressure on marketing activities has
significantly risen in the past three years. The declining efficiency of classic media, the
increased number of marketing tools available, and the macro-economic situation are likely
causes of the increased pressure
• The companies are not satisfied with the efficiency of their marketing activities:
- 3 out of 10 companies see savings potential of more than 10 percent in their
marketing/communication budget; at the same time, 34 percent of companies
plan on making budget cuts in 2002
- One in seven companies perceive potential to increase sales of more than 5 percent
through more efficient marketing
• These findings demonstrate that there is considerable pressure to act, since the area of
marketing and communication is obviously faced with serious efficiency problems in comparison
with other operative functions
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Survey of marketing efficiency 2002 – summary (2)
• Roland Berger Strategy Consultants have identified four barriers to efficiency in this regard:
- Barrier 1: Lack of transparency
- Barrier 2: No targeted marketing budgeting procedure
- Barrier 3: No use of innovative efficiency levers
- Barrier 4: Lack of success measurement
• Around one third of all companies have no or very little overview of their marketing costs
(barrier 1)
• Only around half of the companies interviewed take a systematic approach to developing
proper budgets for marketing industries. Although companies in industries with traditionally high
marketing investments such as consumer goods, telecommunications, and IT have a more
systematic approach, only around 70% of companies are systematic (barrier 2)
• Innovative approaches and best practices in efficiency improvement (. bundling volumes
and printing times in the case of print products) are only taken by a minority of companies to date
(barrier 3)
• In measuring the success of their marketing activities, a large number of the interviewed
companies tend to be passive: one third of companies do not measure the impact of their
marketing activities systematically (barrier 4)
Contents
Page
A. Methodology and sampling of survey
5
B. Main findings
7
This document was created for the exclusive use of our clients. It is not complete unless supported by the underlying detailed analyses and oral presentation. It must not
be passed on to third parties except with the explicit prior consent of Roland Berger Strategy Consultants.
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• Methodology and sampling of survey
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Survey of marketing efficiency 2002: methodology and sampling
• 103 telephone interviews in March 2002 conducted on behalf of Roland Berger Strategy
Consultants
• Base for research and comparison: 2001 survey to similarly structured sample
• Structured questionnaire with open and closed questions
• Target persons: marketing managers of medium and large German companies
Structure of sample
Industry focus
Engineered products 20%
Consumer goods/retail 21%
Pharmaceuticals/healthcare 2%
Transportation 20%
Infocom 16%
Financial services 21%
Total 100%
Revenues
Up to EUR bn 24%
EUR - bn 15%
EUR bn 40%
EUR - 5 bn 7%
Over EUR 5 bn 16%
Total 100%
Size of workforce
Up to 999 employees 30%
1,000-4,999 employees 34%
5,000-9,999 employees 13%
Over 10,000 employees 23%
Total 100%
B. Main findings
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Marketing efficiency is a crucial challenge for more than two thirds
of companies
5%
5%
22%
31%
37%Fully agree
Agree
Neutral
Disagree
Completely
disagree
"Marketing efficiency is a crucial challenge
for us"
68% agree
Source: Roland Berger Market Research, Roland Berger
Key facts/notes
• Marketing efficiency is a top challenge in
marketing for 7 out of 10 companies
• Marketing efficiency is a challenge especially in
the telecommunications and IT sector
• Reasons: Deregulation and market saturation
have led to higher competitive pressure and
increasing marketing investments
• In less marketing intensive industries such as
engineered products, systems engineering,
and transport marketing efficiency is less of a
critical challenge
• The intensity of the challenge increases as the
size of the company increases (larger budget)
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More than two thirds of companies agree that pressure on marketing
expenditures has increased considerably
"Increased pressure on marketing
expenditures in the past 3 years"
Source: Roland Berger Market Research, Roland Berger
4%
4%
21%
26%
45%
71% agree
Fully agree
Agree
Neutral
Disagree
Completely
disagree
Key facts/notes
• 7 out of 10 companies feel that pressure to be
efficient is increasing
• There are relatively few differences between
industries
• The greatest efficiency pressure is felt in
consumer goods and pharmaceuticals
companies (high competitive pressure, a
broader range of marketing tools, declining
efficiency of classic advertising)
• The lowest pressure is felt in Infocom (little
budget pressure because market growth is so
strong) and engineered products/systems
engineering (relatively low marketing
expenditure)
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Companies perceive considerable savings potential in their
marketing budgets, but also possible ways of increasing sales
"Savings potential in the marketing
budget through systematic
planning and budgeting"
Source: Roland Berger Market Research, Roland Berger, Horizont
"Potential to increase sales
through optional use of the
marketing budget"
7%
16%
35%
20%
8%
3%Over 30%
Up to 30%
Up to 20%
Up to 10%
Up to 5%
None (0%)
Over 10%
Up to 10%
Up to %
Up to 5%
Up to %
None (0%) 12%
38%
33%
3%
11%
2%
31% of
companies
see
potential
of >10%
16% see
potential to
increase
sales of > 5%
Key facts/notes
• Almost one third of
companies recognize
savings potential of more
than 10 percent
• Calculated on the total
media spending in
Germany, this means
inherent losses of more
than EUR 500 m
• One in 7 companies
consider it possible to
increase sales by more
than 5 percent through
more efficient marketing
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More than one third of companies plans to cut its marketing budget
– a consequence of the expected savings potential?
36%
13%
17%
12%
22%Fully agree
Agree
Neutral
Disagree
Completely
disagree
"We intend to cut our marketing and
communication budgets"
34% plan on
budget cuts
Key facts/notes
• Despite expected savings potential, only one
third of companies plan to cut their marketing
and communication budget
• Possible reasons:
– Lack of clarity about where to make cuts
– Limited internal resources/competence to
realize the potential
– Marketing efficiency is often not a part of the
overall company's efficiency-raising
program
– Little interest/competence among agencies
to optimize marketing efficiency
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2%
4%
24%
41%
30%
30% of companies do not have transparency over the actions they
are taking – prerequisites for marketing efficiency not in place
"We have an overview of all
marketing and communication costs" Key facts/notes
• Only 7 out of 10 companies have
transparency concerning their
marketing activities and have the
prerequisites for marketing efficiency in
place
• The situation regarding companies'
overview over costs in
telecommunications/IT and transport
has worsened considerably since the
last study findings of 2001
• Possible reasons for the lack of cost
transparency
- Rapid growth in markets/budgets
(especially in telecommunications/IT),
- An ever increasing range of marke-
ting/communication tools
Fully agree
Agree
Neutral
Disagree
Completely
disagree
30% do not have a complete
overview of their marketing
and communication costs
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Print advertising, PR, and CRM are the main cost/budget items in
marketing – major challenge for efficiency measuring
Source: Roland Berger Market Research, Roland Berger
Ranking of marketing activities
by cost/budget relevance
Public relations
CRM1)
Sales promotions2)
Trade fairs
Event marketing
Direct mailing
Merchandising
Sponsoring
Classic advertising (TV)
Classic advertising (print)
1 = Not important, 5 = Very important
1) Customer relationship management 2) Displays, shelf stoppers, trial sizes, flyers, prospects, etc.
• "Top box": Print, PR, CRM
• TV advertising and sponsoring
with limited relevance
(consequence of falling media
performance/activity
efficiency)
• Besides the classic advertising
measurement, a stronger focus
is therefore necessary on PR
efficiency and CRM
campaign management
• The reduction in the
importance of CRM in 2002
over 2001 indicates that
companies' CRM activities are
in a critical situation –
efficiency must be proven
Key facts/notes:
Industry differentiation highlights the different activity focuses –
specific efficiency approaches are needed
Source: Roland Berger Market Research, Roland Berger
Cost/budget relevance differentiated by industry
Shadowed boxes = major costs in the industry
Pharma-
ceuticals2)
Transport Telecommu-
nications/IT
Financial
services
Engineered
products
Consumer
goods
Sales prom.
Sales )
Public relations1)
Cl. advert./print/TV1)
CRM1)
Public relations1)
Direct mailing
Cl. advert./print1)
Trade fairs1)
Event marketing1)
Direct mailing
Event marketing
Cl. advert./print
Classic advertising/print
Public relations
CRM
Sales prom.
Trade fairs
Event marketing
Direct mailing
Merchandising
Sponsoring
TV
Trade fairs
CRM
Cl. advert./print
Cl. advert./print
Cl. advert./TVRank 2
Rank 3
Rank 1
Top box
activities
1) Identical values; no ranking possible for corresponding measures
2) Only two companies in the sample; findings should only be used as an indication of the trend
Only just over half of companies take a systematic approach to
their marketing budget – a further barrier to efficiency
Source: Roland Berger Market Research, Roland Berger
"We take a systematic approach to our
marketing budget and do not just carry on
the previous budget"
Industry allocation of companies that do not
take a systematic approach
17%
32%
51%Agree
Disagree
Neutral
25%
23%
20%
16%
12%
4%
Engineered products
Transport
Financial services
Consumer goods
Telecommunications/IT
Pharmaceuticals
Traditionally
low
investments
in marketing
Industries with
traditionally
high
marketing
investments
Even industries with high marketing expenditures, . consumer
goods industry, have shortcomings in the budgeting process
• Industries with traditionally low marketing expenditure (engineered products/transport) are
least systematic when drawing up their marketing budget – obviously little experience/
competence in targeted budgeting
• One in three consumer goods and telecommunications/IT companies is not systematic in
drawing up its marketing budget. This is remarkable in view of the high marketing expenditure in
these industries. Mistakes in the budget and negative ROMIs1) for activities/campaigns are the
probable consequences
• Companies with no systematic budgeting approach often take the previous year as the
budgeting guide (continuation method)
• Therefore high-quality yet pragmatic budgeting approaches are essential for effective and
efficient marketing
Source: Roland Berger
1) Return on marketing investment
Third barrier to efficiency – innovative approaches to raising
efficiency in marketing not pursued by the majority
"We have taken the following efficiency-raising
activities" (%) Key facts/notes
• On average, only around 40%
of the interviewed companies
use innovative approaches to
improving efficiency
• Company size does not
explain the use/non-use of a
particular approach
• Implementation of innovative
activities is particularly low in
the telecommunications/IT,
financial services, transport
industries
27
24
21
22
37
29
38
35
28
19
44
38
44
50
44
Use of synergies via the
development of advertising
activities across country
boundaries
Use of modular systems for the
compilation of promotional
material
Bundling of print jobs to
guarantee optimum purchasing
Optimizing purchasing through
long-term planning
Avoiding "short-term timing" in
the implementation of
marketing activities
Disagree AgreeNeutral
One third of companies do not measure the impact of marketing
activities systematically – fourth barrier to efficiency
Source: Roland Berger Market Research, Roland Berger
17%
16%
27%
27%
13%
"We measure the impact of classic
advertising activities systematically"
Esp. consumer goods
and financial services
companies
13%
13%
28%
24%
23%
"We measure the impact of direct
marketing activities systematically"
• Pharmaceuticals and
transport industry are
least systematic
• Direct marketing is the
most important marketing
tool for financial services
companies, but less than
2/3 measure the impact
systematically!
Fully agree
Agree
Neutral
Disagree
Completely
disagree
Fully agree
Agree
Neutral
Disagree
Completely
disagree
