Neil Bendle

Metrics that Matter - to Marketing Managers

at Carlson School of Management, University of Minnesota, 321 19 Ave South, Minneapolis, Minnesota, P.O. Box 55406, Phone: +1-612-626-9723, E-Mail: bendl003@umn.edu Paul Farris (corresponding author) is the Landmark Communications Professor and Professor of Marketing at The Darden Graduate Business School, University of Virginia, P.O. Box 6550, Charlottesville, Virginia 22906-6550, USA, Phone: +1-434-924-0524, E-Mail: FarrisP@darden.virginia.edu Phillip Pfeifer is the Richard S. Reynolds Professor of Business Administration at The Darden Graduate Business School, P.O. Box 6550, Charlottesville, Virginia 22906-6550, USA, Phone: +1-434-924-4803, E-Mail: PfeiferP@darden. virginia.edu David Reibstein is the William Stewart Woodside Professor of Marketing, The Wharton School, University of Pennsylvania, 700 Jon M. Huntsman Hall, 3730 Walnut Street, Philadelphia, PA 19104, USA, Phone: +1-215-898-6643, E-Mail: reibstein@wharton. upenn.edu Metrics that Matter – to Marketing Managers

Gift cards: a review and research agenda

Gift cards have received limited study despite being a key element of many retailers’ strategies. One reason may be that approaching the study of gift cards from a traditional economic perspective, i.e. ignoring social relationships, leaves little justification for the rapid increase in gift card sales. Failing to see the value of gift cards, many commentators go so far as to argue against the purchase of gift cards, suggesting that consumers would better off using other gift types. This misses the important point that givers voluntarily buy cards and receivers enjoy gaining them. Consumers undoubtedly perceive the value in gift cards. We suggest that taking a broader perspective on consumer behavior and considering consumers involved in social systems that encourage gift giving, allows us to see the value gift cards create while allowing us to address the concerns gift cards raise more effectively. In this article, we detail the benefits created for givers, receivers, and merchants by the use of gift cards. We highlight areas with significant public policy implications. We outline an agenda for some promising areas of research, including seeking to gain a better understanding of the psychology of giving gift cards and the economics of retail strategies dependent upon gift card usage.

Assumptions of Rationality in Political Marketing: The Case of the Republican Autopsy

Abstract There exists considerable controversy over what voter rationality assumptions underlie political marketing. Some of this controversy derives from the lack of clear definitions of rationality. An examination of seven common assumptions that underlie the concept of rationality shows that only a modest level of information, freedom from errors, and consistency are necessary for the marketing concept to have value in politics. The authors examine the implicit assumptions regarding voter rationality of the experienced Republican political campaign managers who wrote the Growth and Opportunity Project (“The Republican Autopsy”); their assumptions of voter rationality are consistent with those in the theoretical review. We find they appreciate the value of correctly tailoring messages and do not subscribe to a belief that political markets are efficient. We suggest that greater clarity about the various meanings of rationality should better allow marketing theorists to embrace ideas from disparate disciplines.

Reference Dependence in Political Primaries

This research considers how reference dependence impacts choice in a primary election. The normative advice is to weigh personal political preference against the greater ability of a more electable candidate to win the later general election. Here a behavioral view of primary elections is developed by adding reference dependence to a Hotelling model of political competition. The model details the impact of references on voter choice and generates recommendations as to the reference marketers for any candidate would like primary voters to employ. The advice to a more electable, that is, moderate, candidate is to encourage voters to compare the primary candidates to the extremes of the opposite party. A less electable candidate should encourage voters to compare the candidates to positions within their own party.

Understanding the Social Media Strategies of U.S. Primary Candidates

This paper examines the social media strategies of candidates seeking their party’s nomination for the 2016 U.S. presidential election. We use textual analysis to understand what candidates focused on. We assess eight themes covered in Twitter posts. For example, Clinton focused on GUN CONTROL, while Sanders focused on climate change. Using Facebook data, we introduce a topic modeling approach, latent Dirichlet allocation, to the political marketing literature. This allows us to uncover what topics the candidates focus on without researcher intervention and, using a dynamic model, show how this changes over time. We note that Clinton’s focus on Trump increases toward the end of the primary campaign.

The 2016 US Primaries: Parties and Candidates in a World of Big Data

This year, 2016, saw changes in political campaigning including increasing use of social media. Our research considers what such changes, including the increased availability of data, mean for our understanding of political marketing and primary elections. We suggest and discuss the implications that these changes may wrench control of brands away from parties toward candidates with identities independent of their party. We note that there are specific decision-making challenges for voters in primaries, and problems for candidates in being market oriented in a world of sequential elections. We ask whether voters forecast their own choices effectively, and, despite the strong feelings generated in primaries, our analysis shows that primaries may poorly predict general election performance.

The Misuse of Accounting-Based Approximations of Tobin’s q in a World of Market-Based Assets

Accounting-based approximations of Tobin’s q (AATQ) are increasingly popular in marketing. AATQ differ from Tobin’s original conception in that they use accounting data to assess the replacement cost of a firm’s assets; the core problem with this is that valuable assets go unrecorded in external reports, including systematic underrecording of market-based assets. This research examines the extensive erroneous claims made about AATQ in marketing studies. We note the widespread use of the metrics and demonstrate that the AATQ used in marketing (1) are not comparable across industries, (2) do not use only tangible assets in their denominator, and (3) should not find equilibrium at 1. AATQ are often described as performance metrics and can respond appropriately to certain types of positive performance. Unfortunately, they also respond positively to performance-neutral strategic choices. Furthermore, whenever AATQ exceed 1, as is typical, they increase even with completely wasted investments. We note that AATQ...

The Confusion about CLV in Case-Based Teaching Materials.

The authors review 33 cases and related materials to understand how customer lifetime value (CLV) is taught. The authors examine (a) whether CLV is calculated using something other than contribution (e.g., revenue), (b) whether discounting is used, and (c) whether acquisition costs are subtracted before reporting CLV. The authors show considerable confusion in teaching materials; they contain incorrect formula, erroneous claims, and contradict other materials from the same school. The solutions that the authors offer should improve the teaching of CLV. The authors recommend educators always (a) use contribution margin, (b) discount cash flows, and (c) never subtract acquisition costs before reporting CLV.