In marketing, what do we really know?
11th May 2009
Stepping out of the virtual world for a moment, (we do old-fashioned marketing too), this book answers an intriguing question; "After years of research by the best brains spending hundreds of millions of dollars, what generalisations can we make about the impact marketing has on the business?"
An interesting level-setting browse - no mention of global warming or world peace, but good insights nevertheless.
Some of these seem obvious, but it is better to know that common wisdom is in fact wisdom, not just common. Some that appealed to me;
- High levels of customer satisfaction produce significant financial pay offs
- Companies should have service recovery strategies. But, when a service failure is infrequent or not your fault, customer do not expect to be compensated so do not waste it.
- Consumer belief about how much they know of products, services and other marketing contexts are related to the amount of their actual knowledge. But not strongly.
- Innovation in organisations is driven by a history of innovation, resources, processes and cultural factors. The rich get richer (think Apple?). An organisation's motivation to innovate - customer and competitor orientation - are key drivers.
- All else equal, innovation has a persistent, long term positive effect on company value and this effect is greater for radical rather than for incremental innovations.
- Price promotions do not only seduce customers to switch brands, they also induce them to buy in the category in the first place.
- Price promotions - in unit sales terms, brand switching is a much smaller contributor to the sales bump (33%) than temporary category growth (67%), some of which may be 'larder stocking'. [Comment: price promotion appears to increase category sales in proportion to market share, so category champions benefit most from price promotions no matter who pays for them]
Nice to know we have learned some thing(s)...
Any to add?
