Marketing mix, sales, and the moderating role of brand type, brand size and product category type

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Marketing mix, sales, and the

moderating role of brand type, brand

size and product category type

A two-stage analysis

Thesis defense

Wilco de Boer S2813041

Introduction (1)

›  A lot of studies on marketing mix effectiveness (e.g., Ataman, Van Heerde, & Mela, 2010; Dekimpe & Hanssens, 1995)

›  Extensive use of moderating variables on this relation ›  Lot of studies on hedonic and utilitarian aspects (e.g.

shopping environments and attitudes) (e.g. Batra & Ahtola, 1991; Arnold & Reynolds (2012)

•  Hedonic / utilitarian product category type as moderating variable in relation marketing on sales (Product category characteristics)

›  Private label market is a widely studied topic, in combination with loyalty and attitude

›  Perceived quality gap between private labels / national brands (Steenkamp et al., 2010)

•  Private labels / national brands as moderating variable in relation marketing on sales (Brand type)

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Introduction (2)

›  Market share private labels lower than national brands ›  Price and distribution have an effect on market share

(Bowman and Gatignon, 1996; Stöwsand and Wenzel, 1979)

›  Does marketing mix effectiveness depend on brand size?

•  Brand size as moderating variable in the relation of marketing on sales (Brand size)

›  Research question:

›  To what extent do brand type, brand size and product

category characteristics depend on the relation of price, advertising and distribution on sales?

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Academic relevance

› Extension of research on marketing mix effectiveness › Three matching moderators that complement each

other (Brand type, brand size, product category type)

› Research priorities of Ailawadi & Keller (2004) › First time that this specific combination of

moderating variables is investigated

Conceptual model

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Data

› FMCG-dataset (15 product categories, 60 brands) › Measured in 208 consecutive weeks (1994-1998) › Each product category: top 3 brands1_{and private label}

› Marketing mix: price, advertising, distribution › Moderating variables:

• Hedonic / utilitarian category: dichotomous • National brands / private labels: dichotomous • Brand size: continuous (Market share)

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Methodology

›  Two-stage analysis (Nijs et al., 2001; Steenkamp et al., 2005)

1.  60 OLS-regressions (direct effects, 60 brands) 2. 3 WLS-regressions1

›  To account for heteroscedasticity and unbiased estimates ›  Partial adjustment (unit-by-unit) model:

1Estimates of IV’s function as DV in WLS

Results

› Price, advertising and distribution have a significant effect on sales (added z-method)

› Long-term effect of advertising almost double the short-term effect of advertising (o.o7) (Sethuraman et al., 2011)

•  23 significant estimates

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Results (Model 2a)

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•  National brands / private labels (p < 0.1)

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Results (Model 2b)

•  Advertising estimates as DV

•  Large visual differences but no significant effects

Results (Model 2c)

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•  Distribution estimates as DV •  F-test of regression not significant

Discussion and managerial implications

›  Price, advertising and distribution can be used to generate sales

›  Long-term advertising is more effective ›  National brands more negative price elasticity

• Price competition between national brands and private labels

• Temporary price reductions

• Pitfall: lower willingness-to-pay, recent prices have a great effect on the reference price

• Important: carefully plan price reductions

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Limitations and further research

Ø Dataset 1994-1998 à limited private label activity

•  New research with updated dataset

Ø Only three marketing mix instruments (Price, promotion, place)

•  Further research with fourth P (product) Ø Lack of information on advertising expenditures

•  New research with more data on advertising expenditures and content of advertising

Thanks for your attention!

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