A Measure of Dynamic Market Performance

Abstract

This paper proposes an easy-to-implement dynamic measure of market performance over time for various selling units (e.g., sales territories, sales regional offices, or the whole sales organization). It may be used as a diagnosis tool by comparing the market performances of various units, taking into account the conditions prevailing in the different markets (such as competition relative effectiveness, sales penetration, or local market fluctuations). Combining sales volume, market share, and profit variations data into an Index of Sales Unit Market Performance (ISUMP), provides managerial guidance for selling units’ evaluation or resource allocations among units. This index may account for a firm’s selected market strategy (market penetration, market skimming, etc.). Implementation in a large North American insurance company is reported.