Chapter 1

1. Word Reference, www.wordreference.com.

2. Bartlett, John. (1992). Bartlett’s Familiar Quotations, 16th ed.

3. Hauser, John, and Gerald Katz. (1998). “Metrics: You Are What You Measure,” European Management Journal, 16(5), 517–528.

4. Kaplan, Robert S., and David P. Norton. (1996). Balanced Scorecard, Harvard Business School Press.

5. Brady, Diane, with David Kiley and Bureau Reports. (2004, December 13). “Making Marketing Measure Up,” Business Week, 112–113.

6. Strictly speaking, all the numbers contain some error. For example, share might be estimated from retail sales to consumers or from shipments to retailers.

7. Barwise, Patrick, and John U. Farley. (2003). “Which Marketing Metrics Are Used and Where?” Marketing Science Institute working paper.

8. Ambler, Tim, Flora Kokkinaki, and Stefano Puntoni. (2004). “Assessing Marketing Performance: Reasons for Metrics Selection,” Journal of Marketing Management, 20, 475–498.

9. Watt, James H., and Sjef van den Berg. (1995). Research Methods for Communication Science, Allyn & Bacon, p. 11.

10. Armstrong, J. Scott. (1974). “Eclectic Research and Construct Validation,” in Jagdish N. Sheth (Ed.), Models of Buyer Behavior: Conceptual, Quantitative, and Empirical (pp. 3–14), Harper & Row.

Chapter 2

1. Report: Walmart Continues To Gain Market Share In Most Categoriesby Sarah Mahoney @mahoney_sarah, January 24, 2019 Accessed July 8th, 2020 in Marketing Daily https://www.mediapost.com/publications/article/331054/report-walmart-continues-to-gain-market-share-in.html

2. “Running Out of Gas,” Business Week, March 28, 2005.

3. MASB Common Language Dictionary, “Three-Firm Concentration Ratio,” marketing-dictionary.org/t/three-firm-concentration-ratio/.

4. Check the Marketing Evaluations, Inc., website for more detail: www.qscores.com.

5. Claritas provides the Prizm analysis. For more details, visit www.claritas.com.

6. Reichheld, Fred. (2006). The Ultimate Question: Driving Good Profits and True Growth, Harvard Business School Publishing.

7. Reichheld, Fred. (2003). “The One Number You Need to Grow,” Harvard Business Review, 81(12), 46–54.

8. Keiningham, Timothy, Bruce Cooil, Tor Wallin Andreassen, and Lerzan Aksoy. (2007). “A Longitudinal Examination of Net Promoter and Firm Revenue Growth,” Journal of Marketing, 71(3), 39–51.

9. For more on Net Promoter and the implications for academia and practice, see Bendle, N. T., C. K. Bagga, and M. A. Nastasoiu. (2019). “Forging a Stronger Academic-Practitioner Partnership: The Case of Net Promoter Score (NPS),” Journal of Marketing Theory and Practice, 27(2), 210–226.

10. Thanks to Dr. Manuel Garcia-Garcia of New York University Stern School of Business and to neuroscience student Pasha Davoudian from Neuroscience University of Virginia for their invaluable guidance and assistance with this section.

11. McClure, Samuel M., Jian Li, Damon Tomlin, Kim S. Cypert, Latané M. Montague, and P. Read Montague. (2004). “Neural Correlates of Behavioral Preference for Culturally Familiar Drinks,” Neuron, 44(2), 379–387.

12. Another key study on the role of the reward system in predicting consumer behavior is Knutson, Rick B., G. E. Wimmer, D. Prelec, and G. Loewenstein. (2007). “Neural Predictors of Purchases,” Neuron, 53(1), 147–156.

13. Teixeira, Thales, Michel Wedel, and Rik Pieters. (2012). “Emotion-Induced Engagement in Internet Video Advertisements,” Journal of Marketing Research, 49, 144–159.

14. Trabulsi, Julia, Manuel Garcia-Garcia, and Michael E. Smith. (2015). “Consumer Neuroscience: A Method for Optimizing Marketing Communication,” Journal of Cultural Marketing Strategy, 1(1), 80–89.

15. Varan, Duane, Annie Lang, Patrick Barwise, Rene Weber, and Steven Bellman. (2015). “How Reliable Are Neuromarketers’ Measures of Advertising Effectiveness: Data from Ongoing Research Holds No Common Truth Among Vendors,” Journal of Advertising Research, 55(2), 176–191.

Chapter 3

1. “Running Out of Gas,” Business Week, March 28, 2005.

2. This formula should be familiar if we consider that the supplier selling price is merely the cost to that layer of the chain. So this becomes Selling Price = Cost/(1 – Margin %). This is the same as Sale ($) = Cost ($) + Margin ($).

3. Those familiar with basic economics use the term marginal cost to refer to the cost of an additional unit of output. In this linear cost model, marginal cost is the same for all units and is equal to the variable cost per unit.

4. Both contribution per unit ($) and contribution margin (%) are closely related to unit margin ($) and margin (%). The difference is that contribution margins (whether unit or percentage based) result from a more careful separation of fixed and variable costs.

Chapter 4

1. Rangan, V. Kasturi, and Marie Bell. (1995). Nestle Refrigerated Foods: Contadina Pasta & Pizza (A). Harvard Business School.

2. Kusum Ailawadi, Donald Lehmann, and Scott Neslin. (2003). “Revenue Premium as an Outcome Measure of Brand Equity,” Journal of Marketing, 67(4), 1–17.

3. Ibid.

4. Young and Rubicam can be found at yr.com/BAV. Accessed 02/12/2020.

5. Simon, Julian. (1969). “‘Product Differentiation’: A Meaningless Term and an Impossible Concept,” Ethics, 79(2), 131–138.

6. Orme, B. (2010, 2019). Getting Started with Conjoint Analysis: Strategies for Product Design and Pricing Research. Fourth Edition, Madison, Wis.: Research Publishers LLC. https://www.sawtoothsoftware.com/download/techpap/interpca.pdf.

Chapter 5

1. Bell Canada. (2018). Annual Report, www.bce.ca/investors/AR-2018/2018-bce-annual-report.pdf.

2. State Farm Mutual Automobile Insurance Company. https://www.statefarm.com/about-us/company-overview/company-profile/fast-facts

3. “Selected Orders of the Public Service Commission of Wisconsin,” Volumes 59-60 (1974, 1975). By Public Service Commission of Wisconsin, 132.

4. Wikipedia. “Atlanta Braves Home Attendance,” http://en.wikipedia.org/wiki/Major_League_Baseball_attendance_records.

5. eBay, “Unaudited Supplemental Operating Data,” ebay.q4cdn.com/610426115/files/doc_downloads/financials_and_metrics/Q4/Q4’19-Metrics.pdf.

6. Thanks to Gerry Allan, President, Anametrica, Inc. (developer of web-based tools for managers) for his work on this section.

7. Pfeifer, P. E., M. E. Haskins, and R. M. Conroy. (2005). “Customer Lifetime Value, Customer Profitability, and the Treatment of Acquisition Spending,” Journal of Managerial Issues, 17(1), 11–25.

8. Kaplan, R. S., and V. G. Narayanan. (2001). “Measuring and Managing Customer Profitability,” Journal of Cost Management, 15(5), 5–15.

9. Peppers, D., and M. Rogers. (1997). Enterprise One to One: Tools for Competing in the Interactive Age, Currency Doubleday.

10. Berger, P. D., B. Weinberg, and R. Hanna. (2003). “Customer Lifetime Value Determination and Strategic Implications for a Cruise-Ship Line,” Database Marketing and Customer Strategy Management, 11(1), 40–52.

11. Gupta, Sunil, and Donald R. Lehmann. (2003). “Customers as Assets,” Journal of Interactive Marketing, 17(1), 9–24.

Chapter 6

1. Material in Sections 6.1–6.5 is based on Eric Larson, Note on Sales Force Metrics, Darden MBA 2005.

2. Zoltners, Andris A., Prabhakant Sinha, and Greggor A. Zoltners. (2001). The Complete Guide to Accelerating Sales Force Performance, AMACON.

3. Wilner, Jack D. (1998). Seven Secrets to Successful Sales Management, CRC Press, pp. 35–36, 42.

4. For more on these total allocations, see Zoltners, Andris A., Prabhakant Sinha, and Greggor A. Zoltners. (2001). The Complete Guide to Accelerating Sales Force Performance, AMACON.

5. Ibid.

6. Dolan, Robert J., and Benson P. Shapiro. Milford Industries (A), Harvard Business School, Case 584-012.

7. Zoltners, Andris A., Prabhakant Sinha, and Greggor A. Zoltners. (2001). The Complete Guide to Accelerating Sales Force Performance, AMACON.

8. Jones, Eli, Carl Stevens, and Larry Chonko. (2005). Selling ASAP: Art, Science, Agility, Performance, South Western, p. 176.

Chapter 7

1. Product category volume is also known as weighted distribution.

Chapter 8

1. Dolan, Robert J., and Hermann Simon. (1996). Power Pricing: How Managing Price Transforms the Bottom Line, The Free Press, p. 4.

2. Barwise, Patrick, and John U. Farley. (2003). “Which Marketing Metrics Are Used and Where?” Marketing Science Institute working paper.

3. Constant elasticity functions are also called log linear because they can be expressed as log Q = log A + elasticity * log (p).

4. In graphing such relationships, economists often plot price on the vertical axis and quantity demanded on the horizontal axis. When reviewing a graph, managers are advised to always check the axis definitions.

5. If price elasticity is expressed in shorthand as a positive number, then we do not need the negative sign in the formula that follows.

6. For more information, see www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/price-discrimination-robinson-patman.

7. Ibid.

8. Poundstone, William. (1993). Prisoner’s Dilemma, Doubleday.

Chapter 9

1. In this context, we use the term permanent with some flexibility, recognizing that even long-term arrangements must be subject to change in response to market and industry dynamics.

2. Often, contribution can be used as a proxy for profits.

3. Distribution for coupons is used in the sense of postage and insertion costs rather than retail and inventory logistics.

4. For a richer discussion, see Ailawadi, Farris, and Shames, Sloan Management Review, Fall 1999.

5. Roegner, E. V., M. V. Marn, and C. C. Zawada. (2005). “Pricing,” Marketing Management, 14(1), 23–28.

6. The following are the two main types of injury contemplated by the act: (a) Price discrimination might be used as a predatory pricing tactic, setting prices below cost to certain customers to harm competition at the supplier’s level. Antitrust authorities use the same standards applied to predatory pricing claims under the Sherman Act and the FTC Act to evaluate allegations of price discrimination used for this purpose. (b) Secondary line competitive injury occurs when a seller charges competing buyers different prices for the same “commodity” or discriminates in the provision of “allowances” such as compensation for advertising and other services. This kind of price discrimination can hurt competition by giving favored customers an edge in the market that has nothing to do with their superior efficiency. However, in the United States, price discrimination is generally lawful, particularly if it reflects the different costs of dealing with diverse buyers or results from a seller’s attempts to meet a competitor’s prices or services. Clearly this is not intended to be a legal opinion, and legal advice should be sought for a company’s individual circumstances.

Chapter 10

1. Farris, Paul W. (2003). “Getting the Biggest Bang for Your Marketing Buck,” Measuring and Allocating Marcom Budgets: Seven Expert Points of View, Marketing Science Institute Monograph.

2. Dorfman, Robert, and Peter O. Steiner. (1954). “Optimal Advertising and Optimal Quality,” American Economic Review, 44, 826–836.

3. For details on the metrics that fit under the Return on Objective (ROO) umbrella, see Association of National Advertisers and Marketing Accountability Standards Board. (2018). Improving Sponsorship Accountability Metrics, themasb.org/
wp-content/uploads/2018/07/ANA-MASB_Improving-Sponsorship-Accountability-Metrics.pdf.

4. Ibid.

5. For more on the misuse of ROI, see Bendle, Neil Thomas, and Charan K. Bagga. (2016). “The Metrics That Marketers Muddle,” Sloan Management Review, 3, 73–82.

Chapter 11

1. The pixel count technique is also known as client-side tagging, beacon, and 1 × 1 clear pixel technology.

2. See the Media Rating Council for its latest guidance at http://mediaratingcouncil.org/.

3. The Interactive Advertising Bureau gives the following definition of ad impression: “A measurement of response from an ad delivery system to an ad request from the user’s browser, which is filtered from robotic activity and is recorded at a point as late as possible in the process of delivery of the creative material to the user’s browser—therefore closest to actual opportunity to see by the user.” See Interactive Advertising Bureau. (2004). Interactive Audience Measurement and Advertising Campaign Reporting and Audit Guidelines.

4. eMarketer. (2019). US Total Media Ad and Marketing Spending, by Media and Format, 2018 and 2019. chart-na1.emarketer.com/226158/us-total-media-ad-marketing-spending-by-media-format-2018-2019-billions-change. Data are from the January 2019 Winterberry Group report titled “Outlook for Data Driven Marketing: First Look 2019.”

5. “Consumer Panels,” www.nielsen.com/us/en/solutions/capabilities/consumer-panels/.

6. “Bounce Rate,” support.google.com/analytics/answer/1009409?hl=en.

Chapter 12

1. For more details on giving background information to aid in understanding a firm’s value, see FASB. (2010). Statement of Financial Accounting Concepts, No. 8, objective 7.

2. Economic Value Added (EVA) is a trademark of Stern Stewart.

3. The weighted average cost of capital (WACC) is the percentage return expected by capital sources. This finance concept is better left to specialist texts, but to give a simple example, if one-third of a firm’s capital comes from the bank at 6% and two-thirds from shareholders who expect a 9% return, then the WACC is the weighted average 8%. The WACC will be different for different companies, depending on their structure and risks.

4. Excel has a function to do this quickly, as explained at the end of the section. However, it is important to understand what the calculation is doing.

5. A terminal value in a simple calculation might be assumed to be zero or some simple figure for the sale of the enterprise. More complex calculations consider future cash flows; where this is done, ask about assumptions and importance. If the estimated terminal value is a significant area of the analysis, why have you curtailed the full analyses at this point?

6. Hawkins, Del I., Roger J. Best, and Charles M. Lillis. (1987). “The Nature and Measurement of Marketing Productivity in Consumer Durables Industries: A Firm Level Analysis,” Journal of Academy of Marketing Science, 1(4), 1–8.

7. Farris, Paul W., Dominique M. Hanssens, James D. Lenskold, and David J. Reibstein. (2015). “Marketing Return on Investment: Seeking Clarity for Concept and Measurement,” Applied Marketing Analytics, 1(3), 267–282.

8. Ibid.

9. Bendle, Neil Thomas, and Moeen Naseer Butt. (2018). “The Misuse of Accounting-Based Approximations of Tobin’s q in a World of Market-Based Assets,” Marketing Science, 37(3), 484–504.

Chapter 13

1. O’Conner, Fina Colarelli, Thomas R. Willemain, and James MacLachlan. (1996). “The Value of Competition among Agencies in Developing Ad Campaigns: Revisiting Gross’s Model,” Journal of Advertising, 25(1), 51–62.

Chapter 14

1. An identity is “an equality satisfied by all values of the variables for which the expression involved in the equality are defined.” American Heritage Dictionary, 2nd ed., Houghton Mifflin, 1982. In finance, economics, and accounting, an identity is “an equality that must be true regardless of the value of its variables, or a statement that by definition (or construction) must be true.” Where an accounting identity applies, any deviation from the identity signifies an error in formulation, calculation, or measurement. en.wikipedia.org/wiki/Accounting_identity#cite_note-0.

2. Hubbard, Douglas W. (2007). How to Measure Anything: Finding the Value of “Intangibles” in Business, John Wiley & Sons.

3. Borden, Neil H. (1964). “The Concept of the Marketing Mix,” Journal of Advertising Research, 4, 2–7.

4. Zellner, A., H. Kuezenkamp, and M. McAleer. (2001). Simplicity, Inference and Modeling (Keeping It Sophisticatedly Simple), Cambridge University Press.

5. Ambler, Tim. (2000). Marketing and the Bottom Line: The New Metrics of Corporate Wealth, Prentice Hall.

6. Meyer, Christopher. (1994). “How the Right Measures Help Teams Excel,” Harvard Business Review, 72(3), 95.