There is extensive literature written about how to calculate Return on Marketing Investment (ROMI) and its importance for marketing managers. However, there are not many studies made on how and when Return on Marketing Investment metrics are used in real life and if and how it is used to argue the value of a marketing activity. We have in this study with comparative cases investigated if and how ROMI metrics are used by managers outside the marketing department in their decision-making process. We based our case selection on how well they represented "Mad men to Math men" presented in Gilan and Hammarberg (2016)'s book "Get Digital or Die Trying." Mad men refers to old school "gut feeling" marketing decision making and "Math men" refers to modern digital marketers with decision making based on numbers and statistics. This study is made from the decision makers point of view with the purpose to gain a better understanding of if and how ROMI calculations are used in the decision-making process of senior management outside of the marketing department. This comparative case study consists of eight in-depth interviews, four in each company. The interviewees are all senior management outside of the marketing department. Our findings include that these two companies work very differently in how they make decisions in marketing investments. In Company 1 the marketing budget is decided by senior management outside of the marketing department, and this management may also cut the marketing budget if they see it necessary. In Company 2 the Segment Managers are responsible for the amount of the budget they would like to invest in marketing activities, and therefore they have more incentive to calculate the return of each investment and compare it with the return on other investments available to them. One of the reasons for the different ways of working can be a result of the different responsibility structure over the marketing budget. There is also a difference in how the two companies measure the success of the investment; Company 1 measure success in pure financial return and Company 2 measure success in increased market shares as well as financial return. Company 2 are using ROMI metrics to a greater extent than Company 1, who does not use any ROMI metrics. Marketers can in this study get an idea of how using ROMI metrics can help argue their case for further investments in marketing or cutting the budget for the marketing department. With the use of ROMI metrics, marketers can also evaluate which marketing activities are more efficient and thereby decide if they should continue with these activities or not. This study also shows that there is still, in some companies, a divide and conflict between the finance department and the marketing department. By shifting the responsibility of the marketing budget like in the case of Company 2, the adverse effect of this division on the marketing investments can be reduced. It can also be beneficial for the company to focus more on market shares than on sales and numbers. As digital marketing is growing stronger, the calculations of ROMI will become easier. Keywords: Return on Marketing Investment (ROMI), decision-making process, senior management, marketing department, finance department, ROMI metrics, real-life ROMI, comparative case study, Mad men, Math men
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hh-37151 |
| Date | January 2018 |
| Creators | Jönsson, Joanna, Zahn, Mikaela |
| Publisher | Högskolan i Halmstad, Akademin för ekonomi, teknik och naturvetenskap, Högskolan i Halmstad, Akademin för ekonomi, teknik och naturvetenskap |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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