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About PIMS Strategy Model

Introduction --> About PIMS

PIMS stands for Profit Impact of Marketing Strategy. PIMS is a shared experience model that helps firms to make and support marketing strategy decisions. Shared experience means that the model uses experience of a variety of successful and unsuccessful businesses to provide insights into the profitability of a corporation's different business units. PIMS helps marketing managers to:

Select the appropriate market to target.
Identify the marketing strategy that will maximize profits in a business unit.
Compare a firm's actual return on investment (ROI) and return on sales (ROS) with the ROI and ROS that are expected from firms in comparable businesses and circumstances.
A PIMS analysis can show a firm (1) how well it has met its profitability potential and (2) the reasons for its success or failure in achieving the expected profitability.

Introduction --> How PIMS works

PIMS uses information about the experiences of a variety of successful and unsuccessful businesses to provide insights into a firm's expected profitability. The PIMS database contains information about 3000 businesses owned by 450 firms. Based on this reference database, PIMS develops relationships between the profitability measures of a firm (ROI and ROS) and such independent variables as the rate of price inflation and vertical integration. Thus, if a firm provides PIMS with details about the nature of its business and its external and internal environments, PIMS will calculate the ROI and ROS that could be expected of such a firm.