Article
Review
___________________________________________
Cherry
Picking: The Weapon of Choice for Price-conscious
Consumers, Stephen,
Stephen J. Hoch and Edward J. Fox, January
14, 2004 http://knowledge.wharton.upenn.edu/
Do cherry pickers - those consumers who are extremely
sensitive to price and go from store to store
to pick the best-priced items and leave the rest
- really save a lot of money? This paper asserts
that consumers not only save money but that the
savings are enough to offset the time it takes
to do the extra shopping. In addition, the researchers
found, a substantial number of shoppers are savvy
and diligent enough to make cherry picking pay
off. It compared the behaviour of three kinds
of shoppers: store loyals, store switchers and
cherry pickers. Store loyals are people who shop
at the same retailer more than 80 per cent of
the time. Store switchers shop at multiple retailers
but not on the same day. Cherry pickers shop at
two or more stores on the same day at least once
a month. (Many shop more frequently than that.)
The study also found that all three groups of
shoppers spent more money and bought more items
on days when they visited two stores instead of
one, although the cherry pickers showed the biggest
difference - spending 125 per cent more ($115),
and buying 130 per cent more items on cherry picking
days compared to single-store days. As a result,
the marginal benefit that cherry pickers gain
from the extra store visit was larger - $17.45
- than the $10.89 notched by store switchers and
the $8.68 gained by store loyals.
When
Art Meets Science:
The Challenge of ROI Marketing,
http://www.strategy-business.com/
It’s a question as old as business itself:
How can a company be sure it’s spending the
right amount of money on the right kind of marketing
so that it can sell more products or services
to increase profitability and, ultimately, enhance
shareholder value? ROI marketing helps executives
better understand how to spend their dollars to
attain the highest return on their marketing investments,
this article pleads. In past decades, companies
relied in large measure on anecdotal evidence
and rudimentary metrics (e.g., a 20 percent discount
coupon that generates a 30 percent lift in sales)
to develop marketing strategies and tactics, implement
them, and assess their effectiveness. By contrast,
ROI marketing involves the use of new, sophisticated
metrics and computer models to analyse and quantify
marketing spending and return on investment. But
ROI marketing is much more than a measurement
system; it’s a marketing management philosophy
that requires changes in organizational design
and business processes to optimise marketing activities,
say the authors. It is also important to keep
in mind that ROI marketing does not attempt to
wring the art out of marketing; rather, its goal
is to bring measurable data to bear on areas that
in the past were rarely measured. Within the marketing
discipline ROI marketing can be applied across
the entire spectrum of marketing techniques -
trade and consumer promotions, advertising, pricing
and product placements.
Schwab’s
Pottruck: Getting Back
to Basics - and the Customer,
November 5, 2003, http://knowledge.wharton.upenn.edu/
Marketers need to look for new opportunities in
the voids separating existing products and put
hard data ahead of gut feelings, according to
David Pottruck, Chief Executive Officer of Charles
Schwab Corp. and this article is about what he
has spoken at Wharton’s second annual CMO
Summit. Marketers need to look for new opportunities
in the voids separating existing products and
put hard data ahead of gut feelings, according
to Mr Pottruck. Pottruck, who joined Schwab as
head of marketing in 1984, initially relied heavily
on metrics. But during Schwab’s boom years,
the company drifted away from that more disciplined
approach to business growth. Schwab’s marketers
have now returned to basics, Pottruck said, adding
that he recently replaced his entire marketing
team with new people more oriented to metrics.
When a company is doing well, he added, marketers
find it more fun to focus on advertising and feelings
than test data. Pottruck described the role of
marketers at Schwab as one of building the brand
and articulating what it stands for. Marketers
must also be the voice of the customer and seek
out opportunities for services that are not being
offered by the company or competitors. Finally,
the marketing department should serve as a central
point in designing new products and providing
leadership for the entire company.
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