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

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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

about the authors
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
the nature of marketing p roductivity
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
marketing output
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
marketing input
Marketing cost - marketing input.
  • The nature of data base available => limited the percent of sales measure.
  • Marketing input= Marketing expenditures/sales
Marketing input
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)
Marketing Productivity
data base
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
variables influencing marketing productivity
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
Importance of Auxiliary Services to End User (IASE)
  • Frequency of Product Changes (FPC)
  • Customization (C)
model construction
Focused on businesses that dealt in consumer durables
  • 135 firms samples
  • Correlation matrix
  • Multiple regression method
Model Construction
model evaluation
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
limitation implications
  • Communication
  • Comparison Purposes
Limitation & Implications
further research
Old Marketing Principle
  • Update Marketing Concepts
  • Marketing Productivity Analysis
Further Research
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?