Practice prize winner: Dynamic marketing budget allocation across countries, products, and marketing activities

Fischer, M; Albers, S; Wagner, N; Frie, M

Practice prize winner: Dynamic marketing budget allocation across countries, products, and marketing activities

Fischer, M

Albers, S Wagner, N Frie, M

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Publication Type:: Journal Article
Citation:: Marketing Science, 2011, 30 (4), pp. 568 - 585
Issue Date:: 2011-07-01

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Field	Value	Language
dc.contributor.author	Fischer, M https://orcid.org/0000-0002-9012-2292	en_US
dc.contributor.author	Albers, S	en_US
dc.contributor.author	Wagner, N	en_US
dc.contributor.author	Frie, M	en_US
dc.date.issued	2011-07-01	en_US
dc.identifier.citation	Marketing Science, 2011, 30 (4), pp. 568 - 585	en_US
dc.identifier.issn	0732-2399	en_US
dc.identifier.uri	http://hdl.handle.net/10453/28627
dc.description.abstract	Previous research on marketing budget decisions has shown that profit improvement from better allocation across products or regions is much higher than from improving the overall budget. However, despite its high managerial relevance, contributions by marketing scholars are rare. In this paper, we introduce an innovative and feasible solution to the dynamic marketing budget allocation problem for multiproduct, multicountry firms. Specifically, our decision support model allows determining nearoptimal marketing budgets at the country-product-marketing-activity level in an Excel-supported environment each year. The model accounts for marketing dynamics and a product's growth potential as well as for trade-offs with respect to marketing effectiveness and profit contribution. The model has been successfully implemented at Bayer, one the world's largest pharmaceutical and chemical firms. The profit improvement potential is more than 50% and worth nearly E500 million in incremental discounted cash flows. © 2011 INFORMS.	en_US
dc.relation.ispartof	Marketing Science	en_US
dc.relation.isbasedon	10.1287/mksc.1100.0627	en_US
dc.subject.classification	Marketing	en_US
dc.title	Practice prize winner: Dynamic marketing budget allocation across countries, products, and marketing activities	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	30	en_US
utslib.for	1505 Marketing	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Marketing Discipline
utslib.copyright.status	closed_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	30	en_US

Abstract:

Previous research on marketing budget decisions has shown that profit improvement from better allocation across products or regions is much higher than from improving the overall budget. However, despite its high managerial relevance, contributions by marketing scholars are rare. In this paper, we introduce an innovative and feasible solution to the dynamic marketing budget allocation problem for multiproduct, multicountry firms. Specifically, our decision support model allows determining nearoptimal marketing budgets at the country-product-marketing-activity level in an Excel-supported environment each year. The model accounts for marketing dynamics and a product's growth potential as well as for trade-offs with respect to marketing effectiveness and profit contribution. The model has been successfully implemented at Bayer, one the world's largest pharmaceutical and chemical firms. The profit improvement potential is more than 50% and worth nearly E500 million in incremental discounted cash flows. © 2011 INFORMS.

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http://hdl.handle.net/10453/28627