The w 1-b approximation is proposed as a useful model of repeat purchase. Abstract Scientific knowledge builds by continuously subjecting its known laws to differentiated replications.
Marketing Content Wharton marketing professor Leonard Lodish admits he is somewhat to blame for the erosion in brand pricing power that has hit many consumer-goods companies — but not entirely to blame.
Dec 11, · The allure of brands is fading. Increasingly, consumers would rather buy a generic product than its pricier big-brand counterpart: From . Hi Phil, the more I think about this issue the more it comes back to setting the right objectives. Lodish and Mela commented on the revolving door nature of brand management, but these days the average CMO's tenure is not much better. In the process of researching their paper, Lodish and Mela visited many companies and were astonished by the lack of longitudinal data collected by the firms. Many kept only 52 weeks of information.
Inas store-level scanning data started to become widely available, Lodish coauthored an article outlining the power of this technology to gauge the effect of price promotions on revenue. However, he also warned that while these tools could be an effective way to measure the impact of discounting, they were not the only determinant of brand power.
He insisted there are other long-term measures that may not be as easy to collect, but are just as important, perhaps more important, to sales, market share and stock price over Lodish and mela.
Brand managers heard the first part loud and clear. This paper shows how widespread adoption of easy-to-harness, short-term measures has altered consumer behavior and made it more difficult for brand managers to maintain pricing power and compete in the marketplace.
The authors point to research indicating that market share for branded products is declining, and that consumer sensitivity to price has increased in the past 25 years.
Owning — Not Ceding — Your Customers The authors reject the common contention that retail consolidation is to blame for pervasive margin erosion.
They argue that in the s, Vlasic seller of pickles and other foods caved into demands by Wal-Mart to cut its price, and eventually wound up in bankruptcy court.
When customers could not find Nike shoes they wanted at Foot Locker, they moved on to competitors. Lodish says much of the trend toward promotional discounts may be attributed to scanner technology that emerged in the s. The technology provided brand managers with data that clearly tracked the impact of price reductions by comparing stores that ran promotions against those that did not.
In his earlier paper, written with Magid M. Abraham, who is now chief executive of the consumer research firm comScore, Lodish laid out models to use the data. Once they started, they just kept doing it. Consumers have also learned to stockpile goods when they are on sale, diminishing full-price sales.
Competitors, too, are now discounting. That leads consumers to purchase whichever brand is on sale at the time, eroding margins for all companies in the market. Finally, constant sales diminish consumer perceptions of a brand.
The authors point to K-Mart as an example: When it endeavored to curtail these discounts, sales plummeted. The paper cites a study by Information Resources, Inc. IRIwhich reviewed 24 brands in Europe over a three-year period ending in The Wrong Way to Manage Data The authors note that the nature of the data itself has an impact on marketing decisions that can actually impair brands over time.
They interviewed managers at one firm who said they believe distribution and products play the greatest role in increased long-term sales. Yet the managers acknowledge they were focusing their marketing and research on advertising and discounting.
When asked why, the managers said they are judged by quarterly sales, and that investors focus on those numbers because the link between discounts and quarterly sales is clear.
To correct some of these problems, Lodish and Mela put forth metrics to assess long-term prospects for a brand. They recommend every senior-level brand manager take a quarterly look at: The estimated brand sales at a constant, non-discounted price The change in baseline sales over months, quarters and years and the probability that the baseline sales have increased or decreased over those time periods The regular price and promoted price elasticity — or the percent change in revenue due to a percentage change in price Change in brand price response over months, quarters and years, and the probability that elasticity has increased or decreased.
If baselines are increasing and price response is decreasing, a brand is growing stronger and will be able to command full-price margins over time. If elasticity is growing and the baseline is decreasing, the brand is eroding. The researchers cite one brand — LaCoste — that makes long-term equity a priority.
The brand was a hit when it came to the United States in the s and was still strong in when it was acquired by General Mills.
In the mids, sales soared as General Mills lowered the price to extend distribution.by Leonard M. Lodish and Carl F. Mela HE NUMBERS TELL A SOBERING STORY about the state of branded goods: From to , global private-label market share grew a staggering 13%.
Furthermore, price premiums have eroded, and margins are following suit. Consumers are . We begin by thanking Mike Kruger, Len Lodish, Berk Ataman, Carl Mela, and Harald van Heerde for their thoughtful comments on our article (Bronnenberg, Dhar, and Dubé ).
After responding to these comments, we summarize several general directions for . View Test Prep - MKT Quiz 3 from MKT at Arizona State University. 0 Question 1 Interbrand, BrandZ, and Brand Finance all use qualitative and quantitative measurements to calculate brand.
The concept of Banglar Mela was to prove that, it is possible to create panoramic designs of cloths by using local and traditional fabrics.
And to promote them in the market with a reasonable price. And to promote them in the market with a reasonable price. A Parsimonious Model of Stock-Keeping Unit Choice Teck-Hua Ho and Juin-Kuan Chong1 Len Lodish, Carl Mela, Alan Montgomery, Gary Russell, David Schmittlein, Richard Staelin, Christophe Van den A Parsimonious Model of Stock-Keeping .
SENIOR EXECUTIVE MBA. Brand Management. Don O’Sullivan. Associate Professor of Marketing. May-June Brand Management 1 Brand Management. Lodish & Mela, Harvard Business Review. • “Optimal Marketing”, Cortsjens & Merrihu, Harvard Business Review SESSIONS 3 & 4: LEVERAGING THE BRAND.