Marketing Mix Effectiveness

Key strategic partners: University of North Carolina, Tilburg University, Tuck School of Business (Dartmouth College), Kellogg School of Business (Northwestern University), Anderson School of Business (UCLA), University of Waikato (New Zealand).

Program coordinator: Prof. Marnik Dekimpe (Tilburg University & KU Leuven)

Focal areas: 

  • Short- and long-run effectiveness of price promotions
  • Short- and long-run effectiveness of advertising
  • Competitive reactions to advertising and promotion attacks 

Research & Knowledge Sharing Programs on Marketing Mix Effectiveness.

Managers in consumer and industrial sectors alike seek long-term profitable growth for their products and services. Such growth can be found from three sources: growth in category demand, in market share, or in profit margins. In all cases, the company has to use its marketing instruments to achieve such growth in terms of sales and profitability. In these days of increased accountability to market parties (e.g., “Wall Street”), the effectiveness of the various marketing mix instruments is more important than ever before. In this context, one should consider not only the short-term, but also the long-term effects of price promotions and advertising (as well as new product introductions – see above). In these analyses, competitive reactions are taken into account. This stream of research gives in-depth insight into the usefulness of different marketing actions (in the short and long run).

Every year, retailers and manufacturers spend huge budgets on sales promotion strategies. The impact of these promotional endeavors has been a key issue of interest to practitioners, and the focal topic of a sizable stream of marketing literature. This project presents a coherent set of models that estimate promotional effects on incidence (purchase yes or no) and purchase quantity. The model distinguishes between promotional input at three levels: (1) the brand/SKU level, (2) the category level, and (3) the store/chain level. These input variables affect the output variables (incidence and purchase quantity) at the same or higher level. Based on the model results, GfK can develop a dashboard model that tells how much a change in promotional input (price promotion, feature, display) affects key metrics for retailers and manufacturers, such as share of wallet and market share.

Our published and under construction work on Marketing Mix Effectiveness.