The Nature of Marketing Productivity Hawkins et al.

1. Group 3 Alfredo Barragan IrysCitko Justin Copeland Michael McGee Crystal Russell The Nature of Marketing ProductivityHawkins et al.

2. Overview • Background on Authors • Article Introduction • Review and Critique Main Ideas • Questions

3. Del I. Hawkins • Professor of Marketing and Head of the Marketing Department at the University of Oregon • Ph. D. from University of Texas at Austin • Published author in Journal of Academy of Marketing Science, Journal of Marketing, Journal of Marketing Research, Journal of Advertising Research, Journal of Retailing and Journal of the Market Research Society • Co-Authored two textbooks: Consumer Behavior: Implications for Marketing Strategy (3rd. ed) and Marketing Research: Method and Measurement (4th ed.)

4. Roger J. Best • Associate Professor of Marketing and the University of Oregon • Bachelor of Science in Electrical Engineering from California State Polytechnic University • MBA from California State University • Ph. D. from the University of Oregon • Published in Journal of Academy of Marketing Science, Journal of Marketing, Journal of Marketing Research, Journal of Advertising Research, Journal of Retailing and Journal of the Market Research Society • Co-Authored the textbook, Consumer Behavior: Implications for Marketing Strategy (3rd. ed) • Worked with a variety of companies in both marketing consulting and management education; companies to include including the General Electric Company, U S West, Eastman Kodak Company, Lucas Industries, Tektronix Corporation, ESCO Corporation, Pacific Western Pipe, and James Hardie Industries • Conducted many executive management education programs at INSEAD, located in Fontainebleau, France. • Developed the Marketing Excellence Survey, an assessment tool for measuring an individual's marketing knowledge and market orientation. Also developed a business simulation called BIDSTRAT that requires business teams to develop global marketing strategies in high-technology industries.

5. Charles M. Lillis • Vice President of Strategic Marketing US WEST Inc. • Ph. D. From University of Oregon • Published in academic journals • Former Dean of the College of Business at the University of Colorado • Served as a Marketing Executive for General Electric and DuPont • Co-Founder and Managing Partner of Castle Pines Capital, LLC • General Partner of LoneTree Capital Management • Director of SUPERVALU in 1995 • Director of Medco Health Solutions; Washington Mutual Inc. and Williams Companies, Inc

6. Introduction • A major concern in America has become improving productivity.

7. Purpose of the Article • Develop a managerially relevant concept of • Marketing productivity • Operational Measurement • Enviornmental benchmarking to which to compare to marketing productivity of several businesses

8. Marketing Productivity • Productivity Ratio Activity Output / Activity Input • Marketing Productivity = Marketing Output / Marketing Input • Problem with this Model • Simple yet Complex

9. Marketing Output • Consumer/Society Viewpoint • Managerial Perspective • “What does top management expect the marketing function to deliver?” • Market Share • Sales / Total Sales in Relevant Market • Relative Market Share • Sales / Sales of one or more of MAINcompetitors • Relative Price Level • Firm’s price level stated in relation to its major competitors. • Marketing Output = (Relative Market Share) X (Relative Price)

10. Marketing Input • Marketing Cost • What is considered a marketing cost? • Measuring Marketing Cost • Absolute dollar amount • Relative to sales • Marketing Input = Marketing Expenditures / Sales

11. Marketing Productivity • = Relative Market Share X Relative Price Marketing Expenditures / Sales • “The market position that a firm obtains from a given allocation of its resources.”

12. Marketing Productivity ScoreMPS • Calculated by using specific variables • When presented alone, there is no meaning • Information can be misleading • Compared to competition • Compared to a firm’s history

13. Marketing Productivity Index MPI • Predicted score is the marketing productivity index. • Requires explicit consideration of uncontrollable external variables • Allows a firm to compare performance relative to what it “should be “ in its environment • Accounts for environmental influences

14. Drawbacks/Limitation • Informational Database • Specific Operational Environment • Inability to define changes

15. Profit Impact of Market Strategies • Relative Market Share • Relative Price • Marketing Cost • Sales • Relative Product Breadth • Number of Competitors • Relative Product Quality • Relative Customer Size Range • Served Market Growth • Number of Immediate Customers • Purchase Amounts Immediate Customers • Customization • Importance of Auxiliary Service to End Users • Frequency of Product Changes

16. Database • PIMS Database • Information Gathering • Information Display

17. Specific Environment • Consistent Economic Environment • Use of Averages • Marketing Time Frame

18. Defining Changes • Marketing Productivity Score • Changes in MPS

19. New Markets? • Durables • Nondurables • Service • Retail

20. Hawkins Model Critique • Always mention good points first, unique incremental (contributions) they have done. • Use a date base that is credible, and use good companies. • Use pioneering articles first to measure Mp giving validity.

21. Hawkins Model Critique • 10 Variables is a significant number. • Use durables only • 2 groups of industry rather than individual projects.

22. Marketing Productivity Model Split • Why did they split ? • They split because they wanted to see efficiency of the results. • Nondurable and durable goods • Notion of market productivity Both Efficiency and Effectiveness • Results indicated the overall model was reasonably stable.

23. Implications • Formulate marketing performance objectives in terms of relative share and relative price. • Strive for effectiveness, then efficiency • Different perspective • Multiple metrics • Long term impacts

24. Questions ???