Volume 2 (2010): Edizione 1 (May 2010)

An increasing number of brands in the marketplace are being linked to social causes. Such enhancements are called embedded premiums (EP) and can be quite effective as a sales promotion strategy. Across three experiments, using a nationwide internet panel, we find that (i) at low denominations EP is more effective than an equivalent price discount, (ii) EP benefits an unknown brand more than a known brand, (iii) an identifiable segment of individuals prefer the “other” over “self,” suggesting possible EP optimization and segmentation strategies, (iv) a customization strategy is shown to be more effective than a coverage strategy. These findings have broad implications for brand managers in regard to resource allocation and EP program ROI.

Focusing marketing efforts on the most valuable customers so as to increase company profits is not as straightforward as it seems. There is a downside to customer prioritization such as negative reaction from low priority customers. Taking this into account we still show that prioritizing customers does lead to higher profitability and more return on sales. There are two reasons for this. Firstly, it has a positive effect on the key characteristics of a firm’s relationship with its elite customers while not affecting the lower level. Secondly, it reduces sales and marketing costs. Customer prioritization is more effective and efficient than equal treatment. We also show that firms can rely on six key levers relating to a company’s organizational structure and processes, enabling proper implementation of customer prioritization.

How large and lasting are the effects of word-of-mouth (WOM) referrals versus paid marketing? What is the $ / € worth of a WOM-referral to an Internet social networking site? This study finds that word-of-mouth referrals have substantially longer carryover effects than traditional marketing actions. The long-run elasticity of WOM on site signups is 0.53; about 20 times higher than that of marketing events, and 30 times that of media appearances. Based on revenue from advertising impressions served to a new member of the site, the monetary value of a WOM referral is about $0.75 per year. By sending out 10 referrals, each network member thus brings in $7.50 to the firm; which represents the maximum reward the firm could consider to incentivize word-of-mouth referrals. Managers can use this approach and findings to benchmark metrics for both WOM and traditional marketing, to test changes in online WOM referral content, and to decide on the appropriate size of financial incentives to stimulate WOM.

What influence do marketing departments have in companies today? Which factors determine this influence? These are the issues discussed in the present article. Empirical evidence based on data from companies in the Netherlands demonstrates that accountability, innovativeness and customer connections are the three major drivers of influence. The need for a strong marketing department within companies is also discussed, supported by empirical data.

Managers and investors need information about the performance and future prospects of a firm. If information is relevant in steering a business, it is also relevant for its investors’ investment decisions. Recent initiatives demand information that supplements and complements a firm’s financial statements to bridge the gap between financial statement capabilities and financial reporting objectives. Firms that aim to increase the value of their customer base should manage their business by future-oriented customer metrics. They should also report this information externally because it aligns customer management with corporate goals and investors’ perspectives. The authors propose a means to report customer equity that enables monitoring firms’ performance with respect to their customer assets. Furthermore, they develop a specific model for Netflix and apply it to quarterly reports that cover more than six years.

Today, it is not enough for Marketing Intelligence services to merely generate insights: it also has to manage them in such a way that they can ultimately result in successful marketing activities. In February 2010, MIR talked about such topics to Pieter Nota, Executive Board Member of Beiersdorf AG, a leading global player within the cosmetics industry. Pieter Nota is responsible for brand leadership of well known brands such as Nivea and Eucerin and he is renowned for his challenging ideas in marketing management.