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The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis.

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  1. The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis Hawkins, Dell I, Roger J. Best and Charles M. Lillis (1987), “The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis,” Journal of the Academy of Marketing Science, 15 (4), 1-8.

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

  3. Purpose of the Article • Develop a managerially relevant concept of marketing productivity • Construct an operational measurement of marketing productivity-a validity issue • Establish environment specific benchmarks with which to compare the marketing productivity of various businesses

  4. Model Development • How the authors develop the model step by step is a good learning exercise (this is one of the reason I have included this article in the reading list) • Define the variables first • Explain conceptualization and limitation of variables • Identify their relevance in the area • Operationalize the variables-validity • Testing the model with credible data • Explain limitations • Model has no meaning in isolation, relative to what is the question

  5. The Nature of Marketing Productivity • Concept of Productivity: Output/Input • Marketing productivity = marketing output divided by marketing input • Marketing Output = (Relative market share) x (Relative Price) • Marketing input= (Marketing Expenditures) /(Sales) • Percentage or ratio measures, not in absolute dollars

  6. Marketing Productivity • 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)

  7. PIMS Database(now Marketing Science Institute) • Sources of data: firms pay a fee to join PIMS • Self reported data, multiplied by an unknown constant when supplied to PIMS • Questionnaire is provided by PIMS • Operational Definitions of Variables (ses Table 1)

  8. Variables Influencing Marketing Productivity

  9. Construction of the Model

  10. Correlation Analysis

  11. Model Evaluation • R² is significant • Model is reasonably stable • Durables, nondurables, split-half…..all supports the model • Supports the overall structure of the model developed for the durables industries • Variables that were collinear were removed before implementing the model

  12. Critique of the Article • Positive Contribution: • First of its kind • Reasonable model • Credible database • Coming from industry • Questionable Issues • Limitation in variable definition • Variability in the dataset • Collinearity • Future direction

  13. Discussion Questions • What is marketing productivity? What problems do we face in measuring productivity? How can we overcome them? • What are the drawbacks/limitations of the Hawkins et al.’s (1987) marketing productivity score/index? Can we apply the index to measure productivity in other industries? How? • Write a critique of the article.

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