How do my marketing actions interact? Marketing mix synergies

1. Session 10: How do my marketing actions interact? Marketing mix synergies (November 26)

2. Articles Reviewed • *Naik and Peters (2015), “True Synergy for Real Effects:
How to Control Integrated Marketing Successfully”, Marketing Intelligence Review, 7 (1), 34-41. • *Naik and Raman (2003), “Understanding the Effects of Synergy on Multimedia Communications”, Journal of Marketing Research, 40 (November), 375-388. • *Trusov, Bucklin and Pauwels (2009) “Effects of Word of Mouth versus Traditional Marketing: Findings for an Internet Social Networking Site”, Journal of Marketing, 73(5), September, 90-102. • *Mitra and Lynch (1995),”Towards a Reconciliation of Market Power and Information Theories of the Effects of Advertising on Price Elasticity”, Journal of Consumer Research, 21 (March), 644-659 • Boulding, Lee and Staelin (1994), “Mastering the Mix: Do Advertising, Promotion and Salesforce Activities Lead to Differentiation?”, Journal of Marketing Research, 31(2), 159-172.

3. Naik and Raman (2003), “Understanding the Effects of Synergy on Multimedia Communications”, Journal of Marketing Research, 40 (November), 375-388. Quick summary Understanding synergies could be worrisome, in other to show synergy presence in an effective integrated marketing communication, the writers applied kalman filtering methodology(iterative Mathematical process that uses set of equations and consecutive data inputs) on Dockers brand advertising In other to establish the presence of synergy. Findings: As synergy increases, the advertiser requires a larger media budget, emphasized that managers can use market data to estimate and infer not only on media effectiveness but also cross media synergy

4. Naikand Peters (2015), “True Synergy for Real Effects:
How to Control Integrated Marketing Successfully”, Marketing Intelligence Review, 7 (1), 34-41. Can Marketing synergies truly be accurately Measured? SYNERGY EFFECT: The combination of Two activities which exceeds the sum of their individual effects! Comprehensive Survey was carried out : 39% show the effect of synergy Synergies manifest themselves along the sales funnel at all stages but are highest in awareness stages

5. TV+ online/Print/Radio/mailing How do Synergies arises ? Combining different media types timing , Using consistent formal designs and creating integrated content across media types According to the same survey: participant remembered the visual element*TV* Radio commercial, Ads,*online* Seen that Radio advert reinforced the imagery already created by TV Effectiveness ? High for long and short time market effectiveness *Naik and Rahman*discovered as synergy increases, the optimal total media budget increases as well.

6. Do higher-order synergies exist between online and offline media? • Are they catalytic effects of Synergy? Answer: I don’t think true synergy effect can be accurately measured, this could be due to unexpected scenarios *steve job movie* all the hype and marketing !! Poor sales

7. Trusov, Bucklin and Pauwels (2009) “Effects of Word of Mouth versus Traditional Marketing: Findings for an Internet Social Networking Site” Chipotle Hosts Free Festivals And Generates Local Buzz Short Video ….

9. WOM marketing is particularly prominent feature on the internet WOM are two times more effective than radio advertisement, four times more than personal selling, seven times more than print advertisement. Do we agree? Findings: WOM referrals strongly increase new customer acquisitions and have significantly longer carryover than traditional forms of marketing used by firm Consumer who self report being acquired through WOM add more long term value to the firm than customers acquired through traditional marketing channels Estimated longtime elasticity for WOM compared to traditional marketing, Also did they offer contribution linking WOM directly to new customer acquisition

10. Am part of the free thinkers who believe that WOM is one of the world most effective marketing tool? Any Comment?

11. Mitra and Lynch (1995),”Towards a Reconciliation of Market Power and Information Theories of the Effects of Advertising on Price Elasticity”, Quick review The writers showed that advertising affects price elasticity through this constructs • The size of the consideration sets • With variable component like price discount on a particular competitive brandover shopping occasions : Brand switching ..mango&zara • Advertising increases the size of considerations between the most preferred brand and its close competitor (if they can create in the mind of the consumer as an effective substitute and at reduced price) : this may increase the consumer sensitivity to price changes for any brand • Relative strength of preference • Awareness of alternatives brand, with integrated marketing (big brands advertise just to enhance recognition) • Difference in a consumer’s liking for alternative brands can be explained in terms of his or her salient beliefs *US &Canadian Candy Bar, integrated marketing can affect brand preference • The More the consumer has differential preferences for various brands, the less sensitive h/she would be to price for any one brand

12. Boulding, Lee and Staelin (1994), “Mastering the Mix: Do Advertising, Promotion and Sales force Activities Lead to Differentiation? Future price competition!

13. Whether prior expenditure on advertising, promotions and sales force activities lead to more or less differentiation ? Definition of differentiation The writers define differentiation in terms of the degree of which customers perceive the firms offering to be different from that of its competitors, and they suggested that own price elasticity(captures level and change in sales) represents a measure of differentiation. Also that advertising, promotions and personal selling's may lead to differentiation. Assumptions and also quantifies • Perceptual space: where consumers can easily access brands • Product positioning: location can influence desirability • Multi attribute decision making: brand sensitivity of sales • Communications alters customers perception

14. Summarising the general conceptual link between the firms communications *ASP* and the measure of Differentiation

15. HYPOTHESIS EFFECTS ADVERTISING EFFECT Looking at market response to price into 3 groups • Naturally occurring cross-sectional experiments • Naturally occurring *within* experiments • Controlled *within* experiments PROMOTION EFFECT • The debate here is whether promotions yield a negative effect • No significance differences between the changes in controlled brand over time (using controlled experiment) SALES FORCE EFFECT • No systematic empirical evidence exist on the effect of sales force expenditures on own price elasticity, nor are there any specific theories regarding the effect • That higher expenditures on non price-focused sales force activities should lead to more positive, unique, and accessible associations, and thus better isolate the firm from price competition

16. Debate: Whether promotions have negative or positive effect on differentiation? .

17. Sales Force Effects The writer predict that there is increased in differentiation due to communication activities holds For firms with lower price policies, the degree of effectiveness depends on whether the pricing communications are viewed to be positive and unique

18. Can such a firm increase its differentiationwhile still increasing consumers' awareness and sensitivityto price?

19. For your comment, contribution, knowledge shared, Patient, love and support

20. Marketing Mix Impact on Business Performance by Prof Dominique Hanssens Typical Growth Driver Advertising 0.1 Minor Sales Call 0.3 Major Price -2.5 Minor Price Promotion -4 Major Distribution 0.6 or 1.7 No (temp) Customer satisfaction 0.4 major Innovation (on firm Major value) Brand/Customer Asset 0.54 (on Major Firm value) This are data I got from the last conference held.. Can we discuss about it??