Profit Impact of Marketing Strategy

Profit Impact Of Marketing Strategy

The Profit Impact of Market Strategy (PIMS) database "yields solid evidence in support of both common sense and counter-intuitive principles for gaining and sustaining competitive advantage": Tom Peters and Nancy Austin. It was developed with the intention of providing empirical evidence of which business strategies lead to success, within particular industries. Data from the study is used to craft strategies in strategic management and marketing strategy. The study identified several strategic variables that typically influence profitability. Some of the most important strategic variables studied were market share, product quality, investment intensity, and service quality, (all of which were found to be highly correlated with profitability).

According to Lancaster, Massingham and Ashford (Essentials of Marketing, 4th edition, McGraw Hill), PIMS seeks to address three basic questions:

  • What is the typical profit rate for each type of business?
  • Given current strategies in a company, what are the future operating results likely to be?
  • What strategies are likely to help improve future operating results?

Dibb, Simkin, Pride and Ferrell (Marketing Concepts and Strategies, 4th European edition, Houghton Mifflin) cite six principal areas of information that PIMS holds on each business:

  • characteristics of the business environment
  • competitive position of the business
  • structure of the production process
  • how the budget is allocated
  • strategic movement
  • operating results.

Read more about Profit Impact Of Marketing Strategy:  Brief History of PIMS, Conclusions Drawn By PIMS, Participation in The PIMS Study: Cost and Benefits, A Critique of PIMS

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