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Methods for evaluating the effectiveness of marketing activities of an agricultural enterprise

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ECONOMICS E

Evaluation of Marketing Activities: Approaches and Key Indicators

Any investments in the promotion of an agricultural enterprise's products require systematic verification for return on investment. To evaluate the effectiveness of marketing efforts, two main approaches are used: tracking quantitative metrics and mathematical marketing-mix modeling. The second method relies on the analysis of data regarding shipments, retail sales, price dynamics, and advertising costs. It is especially common in enterprises producing packaged goods, as it allows for the identification of advertising budget overruns and the establishment of a minimum acceptable level of expenses.

In practical work, indicator systems are divided into external and internal. External metrics are related to customer behavior, brand attitude, total market share, relative price premium, and profitability. Internal indicators reflect the technological level and innovativeness of the farm itself — for example, the sales volume generated by newly developed product types.

To monitor an enterprise's market position, three basic market share indicators are used:

  • Total market share — the percentage of an enterprise's sales out of the total sales volume of all producers in a given market.
  • Served market share — the enterprise's sales volume as a percentage of sales in the segment of customers preparing to make a purchase. This indicator is always higher than the total market share.
  • Relative market share — the ratio of the enterprise's share to the share of its main competitor. A value above 100% indicates leadership, while an indicator of 100% signifies a claim to leadership.

An enterprise may hold 100% of the served market in its narrow segment but still have a low total share on the scale of the entire industry.

Budget Structure and Calculation of Event Effectiveness

The dynamics of total market share are calculated as the product of four key variables (the RLPTS formula). The calculation includes market penetration (the percentage of product buyers out of their total number), loyalty (the share of purchases from the enterprise among all similar purchases by a client), as well as the enterprise's purchasing and price selectivity relative to industry-average values.

The structure of marketing costs includes expenses for market research, planning, advertising, sales organization, packaging, after-sales service, and maintaining a staff of specialists. These costs are expressed as fixed markups in rubles or percentages per unit of product or profit. The main management benchmark is the ratio of marketing costs to sales volumes, which is analyzed in conjunction with the farm's overall financial health.

  • Target marketing cost share — 25% of sales
  • Sales personnel maintenance — 8%
  • Sales promotion — 6%
  • Advertising campaign — 5%
  • Administrative expenses — 4%
  • Market research — 2%
Marketing expense item Share of sales volume, %
Sales personnel expenses 8%
Advertising costs 5%
Sales promotion costs 6%
Market research expenses 2%
Administrative expenses 4%

In the agricultural industry, marketing effectiveness is evaluated at three levels: the regional or national agribusiness sector as a whole, an individual agricultural enterprise (the work of the marketing department), or a specific event (exhibition, presentation, change in pricing policy).

For agricultural enterprises and individual campaigns, the economic result is determined by the formula: Emr = E / C, where E is the obtained financial effect for the enterprise or event (in rubles), and C is the total marketing cost for its implementation (in rubles).

It is important to analyze the effectiveness of marketing decisions over time and compare them with similar indicators in competing agricultural enterprises.

Marketing as an integral part of entrepreneurial activity is reflected in business plans, where special sections are dedicated to it.

1. When and where did the term "marketing" appear? 2. Define marketing. 3. What tasks does marketing solve? 4. What are the functions of marketing? 5. What goal does marketing pursue? 6. What marketing strategies are you familiar with? 7. What is the essence of target marketing? 8. What stages are carried out in target marketing? 9. What constitutes marketing communications? 10. What types of agricultural product markets exist? 11. What elements comprise the marketing communications mix? 12. What is direct marketing? 13. What costs are included in the marketing expenses? 14. Which indicator characterizes the innovativeness of an enterprise? 15. How is total market share calculated? 16. How is the effectiveness of a marketing system determined at the level of an enterp

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