Title
Evaluating the Effectiveness of Marketing Expenditures
Speaker
Thomas Otter, The Ohio State University
Abstract
Marketing expenditures in the form of pricing, product development, promotion and channel development are made to maximize return on investment. A challenge in evaluating the effectiveness of these expenditures is dealing with the potential simultaneity of an output measure, such as sales and input measures, such as promotional spending, that are jointly determined by consumer preferences and sensitivities. While marketing control variables are explanatory of sales, they are not determined independent of the marketplace. This paper proposes an approach to dealing with the simultaneous relationship among input and output variables that yields measures of the efficiency of converting inputs to outputs, and the optimal allocation of input variables. We illustrate our approach using data from a services company operating in multiple geographic regions.
Meet the speaker in Room 212 Cockins Hall at 4:30 p.m. Refreshments will be served.
