Predictive Strategies for the Determination of Sales and Advertising Expenditures in the Pharmaceutical Industry in Nigeria

Advertising budget setting continues to be a controversial topic. Theobjective of this study is too formulate a scientifically –based approach tosetting advertising budgets and correct the lack-lustre approach towards this.Secondary sources of data were used in this study. Data analysis was done byusing the SPSS statistical software package. This study was based on thepremise that little is known about how managers actually set advertisingbudgets and little attention is paid to this issue and managers are making less than optimal decisions on advertising budgets. It was identified thatoptimizing scientific methods were not the basis of many decisions onadvertising budget settings. It has also revealed the slowly increasing use ofquantitative models and the widespread use of heuristic such as percent-of-sales and competitive parity. Despite the controversies surrounding budgetsetting for advertisement, the study has been able to provide a leverage ofconfidence limits such that, regardless of whatever approach adopted, theconfidence limit is the guiding star towards achieving ‘optimum’ budget toreap the benefits of advertisement

Impact of Social Networks on Diffusion of Products

In light of the rapid growth of social networks around the world, this study analyses the impact of social networks on the diffusion of products and demonstrates the effective way to diffuse products in the society where social networks play an important role. We construct a consumer behaviour model by multi-agent simulation taking the movie market as an example. After validating it by using data from 13 US movies, we conduct simulations. Our simulation results show that the impact of social networks on the diffusion differs according to the customers’ expectations and evaluation for a movie. We also demonstrate the effective weekly advertising budget allocations corresponding to the types of movies. We find that the difference of weekly advertising budget allocations gives greater impact on the diffusion with the growth of social networks. This paper provides firm’s managers with important suggestions for diffusion strategy considering the impact of social networks

Inefficient Allocation of Marketing Budgets: Misunderstanding Corporate Sponsorships

This dissertation explored the inefficient allocation of marketing budgets and the misallocation of corporate sponsorships. The researcher opened by discussing the foundation of the study and the underlying lack of understanding and measure of corporate sponsorships in corporate marketing. The study used a flexible multiple-case study design to explore corporate sponsorship allocations and measurements. The researcher provided two research questions to guide the study, along with underlying assumptions, limitations, and delimitations that may impact the study, before concluding the first section with a literature review. The review summarized the current practices of corporations for allocating and measuring sponsorships and revealed gaps in the processes of organizations who render sponsorship. Next, the study transitions to the second section to highlight the researcher’s responsibilities as the sole instrument of the study. The section contains a deeper explanation of why the lack of statistical data for and informal processes in corporate sponsorship require a flexible multiple-case study design. The researcher discusses the purposeful sampling technique used to select information-rich cases from the accessible population before closing the section with the data collection and analysis techniques and the procedures established to ensure transferability, dependability, and confirmability. The dissertation concludes with the third section as the researcher presents the study’s findings after a study overview and predictions. After collecting data from three cases, return and potential need fulfillment, budget reliance, preferred sponsee type, and corporate social responsibility emerged as the primary themes used by firms to make sponsorship decisions and validate them within their budgets. The study revealed a reliance on informal allocation processes and a lack of sponsorship review, and the researcher recommends standardized allocation and measurement processes, more defined corporate policies, and clear sponsorship expectations

Defensive Resource Allocation in Social Networks

In this work, we are interested on the analysis of competing marketing campaigns between an incumbent who dominates the market and a challenger who wants to enter the market. We are interested in (a) the simultaneous decision of how many resources to allocate to their potential customers to advertise their products for both marketing campaigns, and (b) the optimal allocation on the situation in which the incumbent knows the entrance of the challenger and thus can predict its response. Applying results from game theory, we characterize these optimal strategic resource allocations for the voter model of social networks.Comment: arXiv admin note: text overlap with arXiv:1402.538

THE RECESSION, BUDGETS, COMPETITION, AND REGULATION: SHOULD THE STATE SUPPLY BESPOKE PROTECTION? RESEARCH SERIES NUMBER 12 OCTOBER 2009

Recessions are harsh. Demand declines. Firms shed labour, reduce output or file for bankruptcy. Pressure mounts to reduce prices and increase productivity. Returns decline; margins are squeezed; dividends are suspended. Unemployment increases. Firms seek to delay payments to suppliers, while simultaneously demanding suppliers reduce input prices and extend credit. Carefully assembled workforce teams are broken up. New products and innovations are put on hold. Competition is characterised as cut-throat, destructive and excessive. Faith in markets begins to be questioned

A Descriptive and Normative Analysis of Marketing Budgeting

Marketing budgeting is one of the most important aspects of management and of highly relevance for business success. Due to rising competitive pressure and a considerable increase in marketing investments the importance of this subject has additionally grown in the last years. For this reason, marketing budgeting receives a huge amount of attention by research and practitioners alike. Accordingly, it is stated in the CMO Council Report of 2007: „The number-one challenge for most chief marketing officers is to quantify, measure, and improve the value of marketing investments and resource allocations“. The Marketing Science Instituteset this issue as top research priority for the time period 2010-2012: „How should firms determine the absolute level of marketing spending and how should spending be allocated at the strategic level - that is, across products, customer groups, and geographies?” The academic literature has been dealing with questions regarding the marketing budget process for a long time and therefore this issue has been discussed and analyzed in multiple ways. The focus of this literature has been on the allocation of budgets as previous research has shown that profit improvement from better allocation is much higher than from improving the overall budget. To give an overview of the existing literature we may distinguish between two main research streams: (1) the descriptive and (2) the normative analysis of marketing budgeting. Descriptive literature discusses the status quo of the marketing budgeting process in companies, i.e. it identifies how marketing budgets are actually determined and allocated by managers. Two types of descriptive studies have emerged in the literature. The first type covers a broad range of manager surveys about budgeting behavior. They indicate that budget decisions are mainly based on the application of some simple budgeting rules, such as the “Percentage of Sales” or “Competitive Parity” method, which are easy to apply and therefore be preferred by manager. But these studies ignore for the high complexity of the budgeting process and are exposed to several biases of survey studies. Therefore insights on the budgeting process based on survey results are quite limited. The second type of descriptive studies try to explain budgeting behavior by estimating the impact of relevant factors on the observable size and allocation of the marketing budget to identify determinants of budget setting. But as all of these studies apply highly different approaches in model design results across studies about the impact of determinants on budgeting are characterized by high heterogeneity. So in summary, literature may only provide a fuzzy and fragmented picture on how manager determine their marketing budget. Normative literature discusses how the marketing budget should be determined. A large body of work assists practitioners by developing diverse approaches for allocation optimization, covering several aspects of resource allocation. All of these solutions offer important general insights into the budgeting problem but generally are not implemented in the marketing practice as they cover only some aspects of the budget allocation problem and/or give suggestions on budget allocation which are not understood and therefore are not accepted by manager. For this reason, researcher developed several heuristics or decision calculus models which address the problem that optimization models cannot be well implemented in companies and offer easy to understand and close to optimum solutions for the complex allocation problem. But while all of the heuristics are focused on short-term profit maximization and thus ignore for dynamic effects which are highly important for budget allocation, the decision calculus models may only give imprecise implications for budget allocation. This explains why the application of scientific models for resource allocation by practitioners is quite rare. The objective of this dissertation is to offer a comprehensive analysis of marketing budgeting. Therefore this work contributes to descriptive as well as normative research by addressing two main research gaps which exist in the literature. In terms of descriptive analysis the existing literature provides only a fragmented picture about influential factors in the budgeting process. In terms of normative literature no method has been developed which address the complexity of the budget allocation task for a multi-country, multi product-firm as well as the need of practitioners for simple allocation rules. The first two papers of this dissertation address the descriptive analysis issues by (1) reviewing and structuring the fragmented literature of marketing budgeting behavior, and (2) developing an innovative approach to analyze empirically the application of budgeting methods in pharmaceutical companies. The last two papers of this dissertation address the normative analysis issues by (3) introducing and implementing an innovative solution to the dynamic marketing allocation budget problem for multi-product, multi-country firms, and (4) analyzing and comparing the performance of different allocation rules by simulation analysis. In summary, the dissertation’s focus is to understand how marketing budgets are set by practitioners, and how the allocation decision process can be improved