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Measuring Marketing Productivity in Consumer Durables Industries

This article explores the nature and measurement of marketing productivity in consumer durables industries through a firm-level analysis. It discusses the concept of marketing productivity, the factors influencing it, and the limitations of existing models. The authors provide insights on how to measure marketing productivity effectively and suggest areas for further research.

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Measuring Marketing Productivity in Consumer Durables Industries

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  1. The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis Presented by Group 2: Benedict Kevin Hoang Vu Roel Molina Yang Yang

  2. Del I. Hawkins Professor of Marketing Various marketing Journals & Textbooks • Roger J. Best Associate Professor of Marketing Journals & Textbooks • Charles M. Lillis Vice President of Strategic Marketing for US WEST Inc. Various Journals Marketing executive About the Authors

  3. Positive: Initial research into measuring marketing productivity. • Negative: Out dated Introduction

  4. A ratio of output from some activity to the input required by that activity. Marketing productivity = marketing output divided by marketing input. • Bucklin's definition adjusted Sevin's formula. The Nature of Marketing Productivity

  5. Equate marketing output with the total time, place, form and possession utility • What does top management expect the marketing function to deliver? => The combination of relative market share and price position. • Marketing output for an individual firm as: Marketing Output=(Relative market share) x (Relative Price) Marketing output

  6. Marketing cost - marketing input. • The nature of data base available => limited the percent of sales measure. • Marketing input= Marketing expenditures/sales Marketing input

  7. Marketing Productivity Formula: Relative Market Share x Relative Price Marketing Expenditures/sales • Marketing Productivity Score (MPS) – In isolation it has no meaning ! • Marketing Productivity Index (MPI) Marketing Productivity

  8. PIMS Data Base – firms pay a fee to join PIMS • Function of PIMS Data Base • Sources of Data Base • Weaknesses – sensitive data • Operational Definitions of PIMS Variables (Table 1) Data Base

  9. Relative Product Breadth (RPB) • Number of Competitors (NC) • Relative Product Quality (RPC) • Relative Customer Size Range (RCSR) • Served Market Growth (SMG) • Number of Immediate Customer (NIC) • Purchase Amount Immediate Customers (PAIC) Variables Influencing Marketing Productivity

  10. Importance of Auxiliary Services to End User (IASE) • Frequency of Product Changes (FPC) • Customization (C)

  11. Focused on businesses that dealt in consumer durables • 135 firms samples • Correlation matrix • Multiple regression method Model Construction

  12. R² is significant • Model is Reasonably stable • Different Industries, different marketing productivity • Supports the overall structure of the model developed for the durables industries. Model Evaluation

  13. PIMS DATA BASE • Communication • Comparison Purposes Limitation & Implications

  14. Old Marketing Principle • Update Marketing Concepts • Marketing Productivity Analysis Further Research

  15. Environment • Competition Other Factors

  16. What is marketing productivity?What problems do we face in measuring productivity? How can we avoid them? • What are the drawbacks/limitations of the Hawkins et al.’s (1987) marketing productivity index? • Can we apply the index to measure productivity in other industries? Discussion

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