Marcel Corstjens

The Power of Evil: The Damage of Negative Social Media Strongly Outweigh Positive Contributions

ABSTRACT Media activities generated by consumers or communities that are neither paid for nor induced by brand owners are claimed to have a potentially game-changing impact on communication and brand building. In this study, the authors propose a rigorous methodology to assess the impact of this type of social media activities on the actual performance of brands in the market. The article begins by developing a four-step process to condense the complex reality of micro-social-media events for a brand into a manageable set of social media indicators (SMI). These SMI subsequently are used as a subset of the drivers, together with more traditional marketing-mix elements—in a general market-response model—to estimate their relative impact on brand performance in the market. This methodology is illustrated with two real-world examples—one in the market for flat-screen-television market and the other in the set of Internet broadband-service providers.

New-product success in the pharmaceutical industry: how many bites at the cherry?

Using quarterly data for 56 new ethical-drug products launched between 1989 and 1996, we estimate the coefficients of a regression equation that has cumulative future sales beyond the forecast period as its dependent variable and third-quarter sales, post-launch product improvements and promotional activities, pre-launch product quality and speed to market, and market growth as the independent variables. We find the future success of a new product to be detectable as early as the third quarter after launch, and that while post-launch promotional activities can contribute to that success, if the product has not shown signs of life by the third quarter it is unlikely to do so afterwards. The implication is that being first to the market can contribute to the success of a new drug, as can having the highest-quality drug, though neither being first nor being best is necessary. Rather, a new drug can be both the first and the best in its product category, but if strong signs of success do not appear within nine months after launch, the drug is likely to be fighting a losing uphill battle thereafter, even in a growing market. Or, at least in pharmaceuticals, you get only one bite at the cherry.

Budget Determination for Highly Advertised Brands

This paper looks at how managers can utilize basic statistical methods to obtain an estimate of the profitability of additional expenditure in markets where advertising is the major promotional tool. An important distinction is made and estimated between the short- and long-run payoff of advertising. The methodology is illustrated for a major brand of alcoholic drinks.

The Power of Inertia: Conservatism in Marketing Resource Allocation

ABSTRACT The authors propose a pragmatic methodology to provide management with directional guidance in their marketing-resource allocation decisions. The authors report on the estimated market-response functions for products from seven different industries. In each industry, the most popular marketing vehicle receives the largest share of the marketing budget. A number of rationales may explain these allocation decisions, to which the authors add the hypothesis of conservative decision making in marketing. According to this hypothesis, the observed allocation pattern signals a significant overspending on some marketing drivers and underinvestment in alternative marketing vehicles. Marketing managers, thereby, forego the profitable growth opportunities potentially available from the reallocation of their marketing budgets.

Evaluating the profitability of advertising for heavily advertised brands: an empirical study

Abstract Even companies with large advertising budgets are sceptical of OR models in advertising—such models often appear overly complex, unrealistic and costly to use. Here a simple econometric model is proposed which utilises existing company data. The parameters are estimated for the five leading brands in a sector of the German alcoholic drinks market. Estimates of the short and long run advertising elasticities are made and optimum advertising appropriations are calculated.